Minister says new steel surtaxes will protect Hamilton jobs

The federal government has announced a new 25 per cent surtax on seven steel products in an effort to protect Canadian producers from "excessive imports" by foreign trade partners.

25 per cent surtax announced on 7 steel products

Rolls of coiled steel at Canadian steel producer Dofasco in Hamilton Ont., Tuesday, March 13, 2018. The federal government has announced a new 25 per cent surtax on seven steel products. (Tara Walton/The Canadian Press)

The federal government says its new steel surtaxes will protect Canadian producers, including those in Hamilton, from "excessive imports." But an industry expert says they're also about showing the U.S. Canada will do its part to protect the American industry.

The 25 per cent safe guards were introduced by the Department of Finance Thursday and are aimed at stopping steel dumping and limiting damage from tariffs imposed on Canada by the United States.

Despite the new United States-Mexico-Canada Agreement (USMCA), a 25 per cent tariff on steel and 10 per cent tariff on aluminum remain in place.

The new surtax will be on heavy plate, concrete reinforcing bar, energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire and wire rod — some of which are produced by Hamilton steelmakers.

"I've had the privilege of visiting the workers at Stelco and Dofasco and I understand how important this element of our trade discussion with the U.S. is," Navdeep Bains, Canada's Minister of Innovation, Science and Economic Development told CBC Friday. "This is about protecting Canadian jobs."

The surtax will come into effect on Oct. 25 and remain in place for 200 days, pending an inquiry by the Canadian International Trade Tribunal.

Marvin Ryder, a marketing professor at McMaster University, said he sees the surtax as a way for the Canadian government to show its neighbour to the south that it takes U.S. complaints of foreign steel being siphoned through Canada seriously.

"If we want to get those tariffs removed this was something we were going to have to demonstrate the the U.S.," he explained. "That we are very serious about protecting our boundary to this foreign steel creeping in then finding its way to the U.S."

But Bains said the government's decision is motived by a desire to protect "good-quality" Canadian jobs, not placating the U.S.

"Steel and steelworkers are critical to our communities and our overall economy," he said. "This is really going to help prevent the diversion of foreign steel which can cause harm to Canadian producers and Canadian workers."

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Another concern behind the government's move is that the American tariffs might redirect even more foreign steel into Canada, according to Ryder.

The professor said he does not believe dumping is a major problem in Canada.

"It's not like there's a boat halfway across the ocean then they decide to redirect to Canada," he said. "There's not somebody's standing on a dock in Vancouver saying 'Psst, anybody need any steel?'" 

Still, he said, the surtax will help steel producers on both sides of the border feel more confident.

"It's a way to show their concern," he explained. "Like buying a firetruck even if there isn't a fire at the moment, everyone sleeps better knowing its there if they need it."

The government also announced some Canadian manufactures can now import certain products from the U.S. without paying surtaxes that have been in place since July 1.

The Fiance Department says Canadian companies can now request relief "under extraordinary circumstances, such as a lack of supply in the domestic market."

with files from the Canadian Press