Steel industry stakeholders in Quebec have formed a partnership to fight against the rapid increase in foreign steel imports and protectionist measures, which has resulted in a significant drop of exports to the United States.

Stakeholders rally behind Quebec steel industry

DailyCommercialNews.com
By: Richard Gilbert
Feb 5, 2015

Stakeholders rally behind Quebec steel industry

"They are dealing with Buy America in Quebec and want to send a message out to the provincial and federal governments that we have a huge steel industry in Quebec," said Tareq Ali, director of marketing and communications at the Canadian Institute of Steel Construction (CISC).

"There are jobs at stake here and all levels of government need to pay attention to the impact that leaving our doors wide open and not encouraging Canadian content, or looking at reciprocity when we are buying offshore."

The most important players in the Quebec steel industry mobilized on Jan. 20 to ask three levels of government to take action against the negative impact of Buy America legislation.

"So, at this event the CISC brought together the entire steel industry and partners, like the Canadian Manufacturers and Exporters and launched a partnership," said Ali.

"The reason we are doing this is to showcase to the Quebec market, government and private sector the strength and capacity of the steel industry, so people realize there is great value in using your domestic supplier."

At press conferences in Montreal and Quebec City, the local steel industry launched a new organization called the PICCA (Partners of the CISC) to spearhead the new initiative.

"The province of Quebec has been one of the hardest hit in terms of the imbalance of trade in the steel industry," said Ali. "For the last 10 years we have been noticing some negative trends in our international trade. This has been a growing trend across Canada, but in Quebec this has created a significant impact on the economy and manufacturing."

According to the CISC, steel construction in Canada is a $5-billion industry that employs more than 40,000 people.

The steel construction industry in Quebec employs about 17,000 people in more than 1100 companies operating in the Fabrication and Erection industries. This represents about 3.8 per cent of the manufacturing sector.

However, the CISC claims foreign producers are engaging in unfair trade practices such as product/price dumping, and supplying inferior products into Canada.

At the same time, Canadian companies are being shut out from reciprocal access to foreign markets through protectionist legislation.

For example, Canada went from enjoying net exports of about $1.4 billion to a deficit of more than $600 million for structural steel and related products between 2002 and 2011. Imports of steel have increased from $157.7 million in 2002 to $657.5 million in 2012.

This CISC estimates that this is an increase in imports of about $500 million at the expense of more than 5,000 jobs in the Canadian economy and about $126 million in government revenues.

In Quebec, there has been a significant drop in steel exports of 18.2 per cent between 2002 and 2011, while steel imports have jumped by 22.3 per cent in 2009-2010.

The CISC argues that protectionist Buy America legislation, a dramatic rise in cheap foreign imports, and the slowdown of the North American economy are responsible for these trends.

"We want the government to really put strong consideration into encouraging Canadian content, when we are looking at projects in the infrastructure sector," said Ali.

"And, we want our government to ensure reciprocal procurement. So, we won't buy from countries that won't allow us to work in their countries."

Buy America provisions, such as requirements for 100 per cent U.S. content for iron/steel and manufactured products, put Canadian goods and services at a serious disadvantage when they form all or part of a bid by any supplier, whether U.S. or Canadian.

The Buy America Act contains provisions that are applied to the procurement of transit-related projects with a value more than US$100,000. Buy America provisions are a condition of U.S. federal government grants to state, municipal or other organizations including transit authorities.

The CISC is disappointed and upset the federal government is not supporting local producers and manufacturers in the procurement process for the Champlain Bridge project in Quebec.

The St. Lawrence corridor project, which includes the new $5-billion Champlain Bridge, is one of the largest infrastructure projects in North America.

The existing bridge is one of the busiest crossings in Canada and is a crucial corridor for the national economy.

The CISC says the federal procurement process fails to promote local content or impose restrictions on U.S. and other foreign steel manufacturers.