Contractors on public works should buy Canadian steel, says the Commons trade committee. The recommendation follows a confidential 2016 Environment Canada memo that contemplated a carbon tariff on imports from foreign polluters.
“It is imperative that Canadian and foreign steel producers be subject to a level playing field,” wrote the trade committee in its report The Canadian Steel Industry’s Ability To Compete Internationally. “Global excess steelmaking capacity and the resulting dumping of foreign products into Canada have hurt Canadian steel producers.”
“It is difficult, if not impossible, for Canadian steel producers to compete with companies exporting their products to Canada at prices that do not reflect market forces,” wrote MPs. Canada has run a trade deficit in steel since 1996, almost entirely due to dumping of low-priced imports from polluting state-owned mills in China.
MPs recommended that regulators “assist Canadian steel producers in benefiting from the low carbon footprint of Canadian steel compared to foreign steel, including through government procurement processes that take carbon dioxide emissions into account when awarding contracts.” Chinese mills produce more than ten times the greenhouse gas emissions than Canadian plants, by official estimate.
Steelmakers who earlier testified at committee hearings complained of losing work on federal jobs to cheap imports. Eric Ducharme, vice-president of ADF Groupe Inc. of Terrebonne, Que., said his company operates at less than half capacity though the $4 billion Champlain Bridge is being constructed a half-hour from the plant.
“Just there, you have a hell of an opportunity that we missed,” said Ducharme; “We could definitely do more with the same infrastructure that we have.” Steel used in the Champlain Bridge reconstruction is 19 percent Canadian.
Environment Canada in a 2016 Access To Information memo researched the introduction of the world’s first carbon tariff on imports. “The goal of a border tax adjustment related to greenhouse gases would be to mitigate impacts on competitiveness flowing from domestic carbon pricing,” said the Memorandum To The Minister.
“Border carbon adjustments can reduce the impacts on competitiveness of higher carbon costs and avoid carbon ‘leakage’ where production and emissions shift from a jurisdiction with a high carbon cost to a jurisdiction with a lower cost,” said the memo; “No jurisdiction has yet implemented them.”
The Commons trade committee also recommended cabinet consider imposing countervailing duties “on a regional basis where appropriate” to counter imports. Total imports were worth $9.5 billion last year. Canadian steel output as a portion of world production has