Issue
On May 17, 2019, the governments of Canada and United Stated have announced an agreement to lift tariffs on steel and aluminum, ending the trade dispute that began nearly one year prior.
However, VRCA is continuing to monitor this file after the Government of Canada passed legislation on June 22, 2019 to change trade rules, allowing Canada to re-apply safeguards to protect against dumping of foreign steel from non-U.S. sources. Before the rules were changed in June, Canada had to wait two years between the time a protective measure ends and the re-application of a similar safeguard measure on the same product.
Background
On July 1, 2018, Canada imposed tariffs on a range of American goods imported into Canada, including a 25 per cent tariff on American-made steel and a 10 per cent tariff on aluminum. The tariffs are in response to U.S. duties of 25 per cent on steel and 10 per cent on aluminum made in Canada.
Tariffs on goods imported to Canada from the United States increase the cost of construction.
There is also concern from Canadian steel manufacturers that the Canadian steel market will be flooded with cheap steel from countries other than the U.S. as a result of the tariffs. This has prompted the Canadian government to consider using safeguards such as quotas and tariffs to protect the Canadian steel market.
On Oct. 1, 2018, Canada, the United States and Mexico reached a tentative trade agreement to replace the North American Free Trade Agreement (NAFTA). The new agreement will be known as the United States-Mexico-Canada Agreement (USMCA). Tariffs on steel and aluminum were not part of the NAFTA negotiations, and therefore, remain in effect.
Since Oct. 25, 2018, Canada has imposed a tariff of 25 per cent on steel imported from countries other than the U.S. in an effort to prevent dumping of foreign steel into Canada.
On Dec. 19, 2018, the Government of Canada announced it will provide targeted relief for steel and aluminum businesses and workers. Read the government news release.
On April 26, 2019 the Government of Canada announced it is imposing final safeguard measures on two types of imported steel products while removing the provisional safeguards from five other types of imported steel, including rebar. Read the government news release.
On May 17, 2019 the governments of Canada and United Stated announced an agreement to lift tariffs on steel and aluminum. Read the Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum.
The Government of Canada passed legislation on June 22, 2019 to change trade rules, allowing Canada to re-apply safeguards to protect against dumping of foreign steel from non-U.S. sources. Before the rules were changed, Canada had to wait two years between the time a protective measure ends and the re-application of a similar safeguard measure on the same product.
Current Status:
VRCA is continuing to monitor this file after the Government of Canada passed legislation to change trade rules, allowing Canada to re-apply safeguards to protect against dumping of foreign steel from non-U.S. sources. Before the rules were changed in June 2019, Canada had to wait two years between the time a protective measure ends and the re-application of a similar safeguard measure on the same product.
While the file was active, VRCA supported the Canadian Construction Association’s (CCA) efforts to lobby the Government of Canada to implement measures that limit the impact of steel and aluminum tariffs and safeguards on Canada’s construction industry.
Status Updates
- On July 23, VRCA received a response from Canadian Finance Minister Bill Morneau regarding the association’s joint letter of April 17 concerning the imposition of steel safeguards. Morneau confirmed that Canada has imposed final safeguard measures on only two types of steel products, while safeguards on five other types of steel products, including reinforcing steel, have expired. Read more. Read the April 17 letter.
On June 22, the Government of Canada passed legislation to change trade rules, allowing Canada to re-apply safeguards to protect against dumping of foreign steel from non-U.S. sources. Before the rules were changed in June, Canada had to wait two years between the time a protective measure ends and the re-application of a similar safeguard measure on the same product. Read more.
- On April 30, CCA President Mary Van Buren appeared as a guest on CBC’s Power & Politics discussing the federal government’s decision to lift provisional safeguards on five types of imported steel products. Access the video here, and go to the 1:12:53 mark to watch Mary Van Buren’s interview.
- On April 26, Canada’s Finance Minister Bill Morneau announced his decision to impose final safeguard measures on two types of imported steel products while removing the provisional safeguards from five other types of imported steel, including rebar. Read more.
- VRCA co-signed an April 17 letter to Canada’s Finance Minister Bill Morneau urging him to accept the recommendations of the Canadian International Trade Tribunal and remove safeguard measures from rebar and four other types of imported steel products. Read more.
- On April 3, the Canada International Trade Tribunal recommended ending tariffs for five of seven types of steel. Federal Finance Minister Bill Morneau has until the second week of May when the current safeguards expire to render a decision regarding heavy plate and stainless-steel wire; the two outstanding categories. The minister can either abide by CITT’s recommendation, extend provisions, or end them altogether. Read more.
- VRCA received written acknowledgment from Prime Minister Justin Trudeau and federal Minister of Finance Bill Morneau regarding the association’s concerns that Canadian tariffs on U.S. and non-U.S. steel negatively impact B.C.’s construction industry. The letters are in response to the Nov. 7, 2018 letter signed by the presidents of VRCA, Independent Contractors and Businesses Association, and the Urban Development Institute.
- On Dec. 21, VRCA joined the B.C. and Canadian Construction Associations in welcoming the federal government’s decision to provide tariff and safeguard relief on specific aluminum and steel products imported from the United States and overseas. Read more.
- A delegation featuring VRCA’s president and three members representing the general contractors, trade contractors and manufacturers & suppliers divisions met with B.C. Minister of Jobs, Trade and Technology Bruce Ralston on Dec. 13 to share concerns about the tariffs and safeguards, requesting that the government raise these concerns to the attention of the federal government. Read the follow-up letter.
- Via the B.C. Construction Association, VRCA has been asked by the Trade Policy and Negotiations Branch of B.C.’s Ministry of Jobs, Trade and Technology to help collect feedback from industry on the provisional safeguard measures (tariffs) on certain steel products imported from non-U.S. countries. The information collected will be used to inform the B.C. government’s submission to the Canadian International Trade Tribunal (CITT’s) Inquiry. The Trade Policy and Negotiations Branch requested input by end of day on Nov. 28, 2018.
- VRCA, the Independent Contractors and Businesses Association and Urban Development Institute wrote to Prime Minister Justin Trudeau and Canadian Finance Minister Bill Morneau expressing their ongoing concern about the potential impact of safeguard measures on the supply of rebar and other steel products for the British Columbia construction market. Read more.
- VRCA issued a statement echoing the disappointment expressed by the Canadian Construction Association over the federal government’s decision to impose provisional safeguards on foreign steel imported to Canada from non-U.S. countries, calling the provisional safeguards a double whammy for VRCA members. Read more.
- The Canadian Construction Association issued a letter to members on Oct. 10 with its analysis of the impact the tentative United States-Mexico-Canada Agreement will have on the Canadian construction industry. Read more.
- The United States, Mexico and Canada have reached a trade agreement that will replace NAFTA. Despite the new trade deal, on Oct. 1, U.S. President Donald Trump said that the U.S. tariffs imposed on Canadian steel will remain until the U.S. steel industry is protected. Steel and aluminum tariffs were not part of the NAFTA negotiations. Read more.
- CCA recommends the Government of Canada allow for pricing flexibility in government procurements due to unexpected increases in project cost, such as those from retaliatory tariffs. The recommendation was included in the CCA’s written submission for the federal government’s pre-budget consultations in advance of Budget 2019. Read more.
- VRCA asks CCA to review CCDC documents to see if they provide relief from Canadian tariffs on American-made steel and aluminum. Read more.
The issue of steel and aluminum tariffs was placed on the agenda for the three Division meetings at VRCA. President Fiona Famulak outlined the issue and impact of the Canadian tariffs on imported U.S. steel and aluminum, and issued a seven-question questionnaire developed to capture real examples of how tariffs are impacting VRCA members. VRCA’s feedback was shared with CCA, and the questionnaire circulated across the national network to help CCA collect further impact statements to share in their discussions with government.
Resources
News Release: Government of Canada Provides Targeted Relief for Steel and Aluminum Businesses and Workers
Backgrounder: Targeted Relief for Canadian Businesses from Countermeasures on Certain U.S. Imports
Lists of steel, aluminum and other goods imported from the United States subject to remission of countermeasures
As part of the Remission Order there are four schedules with different conditions attached to each schedule.
- For goods in Schedule 1, relief is granted for an indefinite period for steel and aluminum products imported from the U.S. on or after July 1, 2018.
- For goods in Schedule 2, relief is granted for a limited period from July 1, 2018 to April 30, 2019 for steel and aluminum products imported from the U.S.
- For goods in Schedule 3, relief is granted for steel and aluminum products imported from the U.S. This relief is limited to specifically listed importers, for specified periods and subject to applicable conditions as prescribed in Schedule 3.
- For goods in Schedule 4, relief is granted for an indefinite period for other goods imported from the U.S. on or after July 1, 2018, subject to applicable conditions, as provided in the amending Remission Order.
Applying for United States Surtax Remission
In order to receive surtax remission for good listed under any of the four schedules, companies need to apply to Canadian Border Services Agency (CBSA). For details on how to complete this process, please see the resources below:
- Remission Order: United States Surtax Remission Order
- Guide: Memorandum D17-1-10
- Form: B3-3 – Canada Customs Coding Form
Applying for In-Transit Remission on Steel from Non-U.S. Sources
In order to receive surtax remission for goods in-transit prior to October 25, 2018, companies need to apply to their regional CBSA office. For details on how to complete this process, please see the resources below: