Union focuses on the high cost of cheaper steel

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by Russell Hixson

Some steel industry advocates say unfair competition by foreign companies is wounding Canadian companies and workers.

Some steel industry advocates say unfair competition by foreign companies is wounding Canadian companies and workers.

Eric Bohne, general organizer for Ironworkers International, has been in the steel industry his whole life and is fighting to keep it safe from what he believes are unethical and unsafe business practices by Chinese and South Korean companies.

Bohne noted that owners choosing some of these foreign companies has a moral cost.

According to a 2013 U.S. Department of State report on China, conditions are bleak.

Workers have no freedom to strike or form independent unions. There is no national minimum wage and rules and regulations are often ignored or not enforced.

Huge populations of migrant workers are employed informally, meaning lower pay and even fewer rights.

“It goes against our Canadian values,” Bohne said.

He said the Chinese government also heavily subsidizes the industry, meaning they can dump steel abroad at or below cost.

Low wages, few workers’ rights, ignored safety regulations, relaxed environmental standards also drive down costs.

“That makes it impossible for us to compete,” Bohne said. He added that it is at the point that companies won’t even try to bid on certain jobs or jobs will automatically go to China because of the savings.

According to Bohne, Canada imported $1 billion worth of steel from China in 2012, plus another $400 million from Japan and $300 million from South Korea. He said this translates to millions in lost revenue and thousands of jobs.

Another major issue is safety. Bohne said the cut corners mean an inferior product that can fail. Xinhua, China’s state run press agency, reported that six of the country’s bridges have collapsed since July 2011.

Xinhua has acknowledged that poor construction and substandard building materials played a role in the incidents. An extensive investigation by the Sacramento Bee this month revealed more issues with Chinese construction. Reporters uncovered that substandard building practices caused inferior welds and cracks, meaning millions of dollars in delays and repairs.

The Canadian Steel Producer’s Association (CSPA) spoke out against some forms of foreign competition earlier this year, writing that the government must maintain a strong Canadian trade remedy system to counter dumped or subsidized imports from other countries. 

“Free trade agreements must not weaken Canada’s ability to apply its WTO-consistent trade remedies, and the government must ensure that there are adequate resources to administer these important laws”, said Ron Watkins in a release by the CSPA. 

“Otherwise, the potential benefits of free trade agreements can be eroded by market-distorting trade that unfairly injures domestic producers and the jobs they create across Canada.”

Canadian steel producers are prepared to compete on a commercial basis, but not against foreign dumped products, subsidies and other forms of support that run counter to established trade rules, he added. According to CSPA, Canada’s steel companies directly employ over 20,000 people at facilities in eight provinces and create an additional 100,000 spin-off jobs.

Annual shipments total $13-$14 billion, with approximately $7 billion annually in exports. The industry purchases more than $9 billion of goods and services in Canada. Bohne said he and other industry leaders are planning to meet with government officials and are conducting a national poll on the issue for release in the future. Early results suggests some agree with his arguments.

He said that from a poll of 838 B.C. residents conducted by a marketing research company, 89 per cent said they were concerned about foreign countries producing goods for export that are subsidized by government grants and made by workers with few rights.

Bohne said his father worked in the steel industry after moving to Canada from Germany and helped him get into the industry out of high school.

“To just sit back and do nothing and watch the industry die is not an option for me,” he said.

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