Posted on February 17, 2015

B.C. Businesses Support Rebar Tariff Exemption

February 10, 2015
By Russell Hixson

After the Independent Contractors and Businesses Association (ICBA) and B.C. government officials vowed to fight national steel tariffs that harm the west coast, other groups are also criticizing the policy.

Jim Bogusz, COO at Beedie Development, said rebar suppliers are signaling that the price of rebar is going to go up..

Beedie is an owner and developer of industrial and residential real estate, including mixed-use projects.

He said based on five residential tower projects Beedie has on the books and supplier rates, the cost per unit is going to jump between $3,500 and $5,500.

On the business side, costs could increase 74 cents to $1.50 per square foot.

He said the bigger and taller a project, the more rebar it uses and the more rebar costs will affect it.

"This isn't our fight (the trade dispute). We are 100 per cent dependent on importer rebar," Bogusz said.

"We don't have a choice here in B.C."

The issue gained traction in June 2014, when a trade dispute triggered by the rebar industry initiated an investigation into the dumping and subsidizing of rebar imported into Canada from China, South Korea and Turkey.

Complaints were made to the Canada Border Services Agency (CBSA) from three eastern steel manufacturing companies.

The closest mills to the B.C. market are Nucor Seattle, Wash.; Cascade McMinnville, Ore.; Alta Steel Edmonton, Alta., and Gerdau in Rancho Cucamonga, Calif.

Temporary tariffs of 25 per cent were put in place as information was gathered.

The investigation revealed that the foreign steel has the potential to harm the Canadian industry if the influx continues.

But, since it did not prove past harm was done during the complaint period, the temporary tariffs collected must be given back.

The ICBA appealed the tariffs in December, arguing that domestic producers have never demonstrated any real interest or ability to supply the B.C. market therefore, a B.C. exemption to the tariffs would not harm them.

Bogusz called it a tax on concrete construction that is putting B.C. construction jobs at risk.

"It's another cost that gets passed on to the homeowner or the business," he said.

"We are already in the second most expensive market in the world for residential. I don't know how much further we want to push our homeowners or our businesses."

Suppliers are also concerned.

Norm Streu, CEO of LMS Reinforcing Steel, echoed many of Bogusz's points, also calling it a tax that won't benefit jobs.

He noted that because commodity prices are currently low, the price hikes aren't as evident yet, but they will be.

Streu said he understands the concern that an exemption could open the door for dumped steel to leak into other provinces.

However, he explained that while some steel could be used in Alberta, beyond that, shipping costs begin to far outweigh the savings.

He also recognized that while Alta Steel in Edmonton is a close steel supplier, it could not practically support the B.C. market.

But should they have to compete with dumped steel?

Streu said that question adds a wrinkle to the argument for an exemption, but he still supports it.

To read the full article, click here.