The federal government announced on August 9, 2019, that it will be
granting full duty remissions on illegally dumped fabricated steel from
China to supply two liquid natural gas (LNG) projects located in British
Columbia. Their recent action was announced with their assurance that
“trade barriers would not be permitted to stand in the way of these
historic private sector investments”.
The two projects involved are LNG Canada and Woodfibre LNG, both located
on the coast of B.C. The partners in LNG Canada are made up of a
consortium of investors of which include China. These two LNG projects
will be#modularized, meaning they will be built in smaller shippable
pieces with all the equipment and components preinstalled. The modules
will be connected on site, requiring very few construction workers.
Essentially, in doing so, the largest project ever in the history of
Canada will be handed over to Chinese businesses and workers.
“The announcement was very disappointing,” says Ed Whalen, President
& CEO of the Canadian Institute of Steel Construction (CISC). “These
two projects, if done in Canada, would have created hundreds of
thousands of construction jobs for all trades across the country.
Projects like these employ skilled workers from all over Canada and not
just in the local area. This is a hundreds-of-thousands-of-jobs-lost
kind of mistake.”
The duties on fabricated structural steel have been implemented by the
Canadian International Trade Tribunal (CITT) under the Special Import
Measure Act (SIMA) after proof that China, South Korea and Spain were
found to be illegally dumping into Canada. An appeal of the CITT’s
decision is currently still pending in the Federal Court of Appeal.
“The government has called SIMA and the rulings of the CITT ‘trade
barriers’ in their announcement! For the Government of Canada to call
their own fair trade process a trade barrier is dumbfounding,” says
Whalen. This statement will send shock waves across all Canadian
industries contemplating future capital investment and their viability
in Canada.”
Last fall, the federal government provided $375 million of taxpayers’
money to LNG Canada to encourage the project to go ahead. Interestingly,
the maximum duty on steel from China would have been $375 million in
total cost.
“For the Liberal government to double down with a remission was not
necessary. They got their duty money last fall and now they get it
twice,” says Whalen. “Minister Morneau also stated last fall the
government would let the legal process take its course before any
further action by government. The Liberal remission appears to be a
pre-emptive move to override or influence the courts.”
Modules are custom for each construction project. Canada has been
assembling modules for many years with the projects like those in
Alberta. The argument that Canada does not or can’t do this work is
false. What is true is that international oil and gas companies want the
lowest cost, China’s illegal dumping and subsidizing provides that, the
government of Canada will offer the legal framework to allow this to
happen and Canadian construction workers no longer have access to
projects in Canada.
BACKGROUND
The CITT levied trade duties against China in June 2017. China was
proven to be illegally dumping fabricated steel into Canada at up to 48
per cent, in addition to illegally subsidizing its industry at up to
$2,300 per metric tonne. Since then, a number of LNG companies have
requested waivers on these duties in order to complete any related
projects with the use of illegally dumped Chinese fabricated structural
steel and modules.
ABOUT CISC
The Canadian Institute of Steel Construction (CISC) is Canada’s voice
for the steel construction industry, providing leadership in sustainable
design, construction, efficiency, quality and innovation.
The Canadian steel construction sector is a vibrant $5 billion industry, which employs over 130,000 people in its supply chain.
Media Contact:
Maricelle Ambat
Marketing & Communications Coordinator
(905) 604-3231 ext. 107
mambat@cisc-icca.ca
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