2016 Industry Canada memo on steel industry raised “Buy Canada” policy


The industry department in a secret 2016 memo discussed a “Buy Canada” policy to aid the steel industry. The Access To Information memo cited “near-crisis conditions” due to dumping of China-made products.

“There are increasing demands from firms and other stakeholders for federal government action to support the steel sector, including strengthening Canada’s trade regime against unfair imports and adopting a ‘Buy Canada’ policy to favour Canadian steel in infrastructure procurement,” said the memo Steel Industry Update; “Global steel prices are expected to remain weak due to anemic demand and excessive production around the world. Conditions are not expected to improve until 2017 at the earliest.”

Canada since 2008 has imposed anti-dumping duties on steel products from China, the world’s largest producer. “This is not a fair market,” Paul Halucha, assistant deputy industry minister, testified at 2016 hearings of the Commons trade committee.

Steel Industry Update cited “hyper-competitive conditions” in the sector that have driven two of the country’s largest steelmakers into creditor protection, Essar Steel Algoma and U.S. Steel Canada.

“Near-crisis conditions in the global steel industry are posing significant challenges to the Canadian steel industry as it struggles with record low prices and competition from unfairly traded imports,” the department wrote.

Much of the four-page memo was redacted. Cabinet has publicly dismissed a “Buy Canada” policy as contrary to competitive bidding and trade policies.

Canada’s steel industry employs 17,000 and is worth $2.6 billion a year, by official estimate. MPs have advocated a “Buy Canada” policy on steel contracted for public works. Canadian-made product accounts for 19 percent of the steel used in construction of the $4 billion Champlain Bridge at Montréal.

“It is very strange the Government of Canada is importing steel while Canadian steel mills are laying off workers,” MP Erin Weir (Regina-Lewvan), New Democrat public works critic, earlier told the Commons. “If we are concerned about economic development in our country, if we are concerned about our environment, we should be using Canadian-made steel.”

Trade department officials have estimated Canadian steel mills emit 42 kilograms of carbon dioxide for every tonne of steel, compared to 152 kg in the United States and 598 kg in China.

“They can crank this stuff out,” Conservative MP Dave Van Kesteren (Chatham-Kent, Ont.), earlier told a trade committee hearing on steel imports. Van Kesteren recalled touring a Chinese mill fueled by high sulfur-content coal in 2007. “I really thought they were burning tires, seriously,” he said.

By Mark Bourrie