Drywall Decision Seeks to Remedy Excessive Duties Contrary To Canada’s Economic Interests
Recent announcement from the Minister of Finance reducing the anti-dumping duties on drywall from the U.S. coming into Western Canada, along with a compensation package for industry and consumers affected by “exceptional price increases”, will help address the unintended effects of the original duties imposed. Both the duty reduction and the creation of a program to provide relief to builders and contractors in Western Canada, as well as residents in Fort McMurray, is welcomed by the Canadian Home Builders’ Association.
Given the impacts and nature of the imposition of the original duties, the harmful effects on industry and homeowners were quite broad. CHBA took immediate action to seek relief for industry, consumers, and the economy at large in Western Canada, and welcomed the unprecedented action taken by the Minister to fast-track the public interest review process by the Canadian International Trade Tribunal.
“Through an unprecedented accelerated inquiry, and with its announcement today, the government recognized that the imposition of the original drywall duties, which were at exorbitant levels, was contrary to Canada’s economic, trade and commercial interests,” said Kevin Lee, CHBA CEO. “Our Association and its members commend Minister Morneau and the government for taking expeditious action with respect to the cost impact of the duties on the actual users of drywall. Without those efforts, we could have been a year down line before getting to this point.”
Today’s announcement establishes new minimum import prices that are 32.17% lower than the normal values originally established in the anti-dumping investigation. The Government has stated that the reduction is in line with the Tribunal’s recommendation to reduce the duties to 43% of export price (final duties were first assessed at as much as 201%). This should hopefully maintain competitive conditions in the Western Canadian drywall market and mitigate the potential for supply shortages in Western Canada.
“One of the most difficult parts of all this has been the uncertainty around pricing and availability,” said Mr. Lee. “Builders and drywall contractors quote on jobs months prior to the actual start of work. The government’s announcement will hopefully bring back a stable pricing regime and stable supply and let them make plans without worrying about a major price jump the following week.”
The Minister also announced that the government will use the approximately $12 million in anti-dumping duties already collected to provide relief to builders and contractors who were unable to pass through elevated drywall costs, due to fixed-price building contracts committed to before the imposition of duties.
“The immediate imposition of extremely high duties back in September had a severe effect on drywall contractors, builders and renovators, especially those with fixed-price contracts. CHBA expressed extreme concern about the many businesses that lost money on contracts already in place, which threatened thousands of middle class jobs, along with a crucial engine of economic growth,” said Mr. Lee. “CHBA is pleased that those who suffered through this will be compensated accordingly.”
The program will be administered by Western Economic Diversification Canada, and is expected to start in mid-2017.