Canadian Government Hands $42 Billion in Construction Projects to China at Expense of Canadians

MARKHAM, Ontario, Aug. 20, 2019 (GLOBE NEWSWIRE) -- 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.