The Government of British Columbia and the Independent Contractors and Businesses Association of B.C. are fighting a decision by the Canadian International Trade Tribunal to put national tariffs on foreign rebar steel.
"Unfortunately, B.C.'s unique regional characteristics were not recognized," said Philip Hochstein, president of B.C's Independent Businesses and Contractors Association. "In a country as big as Canada, a one-size-fits-all approach does not make sense. With this new tariff, our province has become collateral damage with no offsetting gains for the rest of Canada."
The effect of the ruling by the Canadian International Trade Tribunal (CITT) is that as of Jan. 9, 2015, rebar duties of up to 41 per cent now apply on imports from China, South Korea and Turkey.
"This issue should be a concern to every British Columbian, as these costs get passed along to consumers and taxpayers," said Minister of International Trade Teresa Wat in a release. "It not only affects commercial construction and public infrastructure projects, but our competitiveness as a jurisdiction for investment for major industry projects."
In June 2014, a trade dispute triggered by the rebar industry initiated an investigation into the dumping and subsidizing of rebar imported into Canada from China, South Korea and Turkey.
Complaints were made to the Canada Border Services Agency (CBSA) from three steel manufacturing companies – Arcelor Mittal LCNA in Quebec, Gerdau Long Steel North America in Ontario and Alta Steel Ltd. in Alberta.
The closest mills that produce rebar for the B.C. market are Nucor Seattle, Wash.; Cascade McMinnville, Ore.; Alta Steel Edmonton, Alta., and Gerdau in Rancho Cucamonga, Calif.
Temporary tariffs of 25 per cent were put in place as information was gathered.
The investigation revealed that the foreign steel has the potential to harm the Canadian industry if the influx continues. But since it did not prove past harm was done, the temporary tariffs collected must be given back.
According the B.C. government, the province's construction industry relies on imports from Asia.
According to CITT documents, the ICBA appealed the tariffs in December, arguing that domestic producers have never demonstrated any real interest in the B.C. market and have not demonstrated a reasonable prospect of becoming active suppliers in British Columbia. Therefore, a B.C. exemption to the tariffs would not harm them.
The ICBA also noted that high shipping costs make domestic rebar unfeasible for B.C. builders.
Hochstein explained that rail infrastructure isn't developed enough to make it competitive. He also doesn't believe Canadian steel producers are able to supply the province.
The CITT ruled in favour of the companies that argued their sales have increased in B.C. since the provisional duties began.
The companies added that they want to compete in B.C. on a level playing field without unfairly traded rebar.
The CITT also noted enforcement concerns because as much as 20 per cent of the imported rebar to B.C. could be shipped to other provinces.
Together with the ICBA, the B.C. government will be requesting a Public Interest Inquiry. Hochstein said it essentially the same request denied this month, but the impact on B.C. rather than just the steel producers will be considered.
They have until Feb. 23 to make the request.
The CITT has about 30 days to grant or deny a hearing, which would take several months.
"We were very disappointed with the original decision. We are hopeful that now that they can ask the right questions so that B.C. will be granted an exemption," Hochstein said.
B.C. exemptions are not without precedent.
Hochstein said tariff exemptions were approved for corn oil and a building insulation product using an argument similar to that used for rebar.