Fort McMurray wildfire rebuild: homeowners to be compensated for increased drywall duties

Construction workers move sheets of drywall at a building project in Calgary, Alta., on December 30, 2016.
Construction workers move sheets of drywall at a building project in Calgary, Alta., on December 30, 2016. THE CANADIAN PRESS/Jeff McIntosh

Canada will slash anti-dumping duties on U.S. drywall imports after a trade panel ruled that maintaining levies imposed last fall would harm consumers and businesses, federal Finance Minister Bill Morneau announced Monday.

At the same time, the roughly $12 million collected since the duties were imposed in September will go toward a compensation package for residents of Fort McMurray forced to rebuild their homes after wildfires tore through the community, Morneau said as he visited a residential neighbourhood in the northern Alberta city.

READ MORE: Province funnels $20M into Fort McMurray to help wildfire recovery

Part of the money will also go to builders and contractors in Western Canada who had to absorb unexpected higher building costs, Morneau said in a statement.

The Canadian International Trade Tribunal (CITT) ruled last month that, while U.S. firms had dumped drywall in Canada at discounted prices over the past few years, maintaining duties at current levels would not be in the country’s trade interests.

Story continues below advertisement

READ MORE: Canadian trade tribunal backs tariff on U.S. drywall

In its decision, the tribunal recommended lifting preliminary duties of up to 276 per cent imposed by the Canada Border Services Agency, and instead charging permanent variable duties on any imports that fall below a set floor price.

The CITT said the import duty should not exceed 43 per cent until U.S. imports reached a certain level.

Watch below from Nov. 8, 2016: It has been a couple of months since new tariffs were imposed on drywall coming into Canada. The impact is being felt in Lethbridge, where one small businessman is growing ever more concerned about his future. Sarah Komadina has more.

Click to play video: 'Drywall Tariff impacting Southern Alberta consumers' Drywall Tariff impacting Southern Alberta consumers
Drywall Tariff impacting Southern Alberta consumers – Nov 8, 2016

Morneau announced Monday the government has reduced the duties by lowering minimum import prices by just over 32 per cent.

Story continues below advertisement

“This approach will result in the same level of duty reduction as recommended by the CITT,” said the Finance Department.

The panel also asked the federal government to consider waiving all duties on drywall used in the Fort McMurray region if it felt the reduced tariff would harm the reconstruction effort.

Canadian construction firms had complained the tariffs on U.S drywall made it more expensive to build homes out of the material, also known as gypsum board. In addition to higher prices, the duties resulted in a drywall shortage, and were hampering efforts in Fort McMurray to recover from last year’s devastating wildfires.

READ MORE: Spike in drywall prices affecting construction 

The mayor of the Regional Municipality of Wood Buffalo, which encompasses Fort McMurray, had called on the federal government to offer grants to offset the impact of the drywall duties, saying that low oil prices had already hurt the local economy and resulted in numerous layoffs.

The community lost 1,800 single-family homes and dozens of other structures in last spring’s wildfires.

It wasn’t immediately clear how much compensation individual homeowners could expect to receive. The relief was to be made available by the middle of this year, the Finance Department said.

The duties imposed in the fall were in response to a dumping complaint by French-owned CertainTeed Gypsum Canada, the last drywall manufacturer in Western Canada with plants in Vancouver, Calgary and Winnipeg, and at two gypsum quarries in B.C. and Manitoba.

Story continues below advertisement

READ MORE: Trade tribunal ruling on drywall tariff could impact Fort McMurray rebuild

The company’s Canadian manager had warned that its plants and quarries could be closed at the cost of 200 jobs if the dumping of U.S. products for as little as half of the price south of the border were to continue.

Before the tariff came into effect, DCL Drywall of Edmonton said it was paying $286 per thousand square feet for half-inch thick drywall. With duties in place, the cost for the same product from the same supplier shot up to $370, adding just over $4 to the cost of a four-by-12-foot sheet of the product.

Sponsored content