Some Canadian businesses fear they are about to get hammered by a new 25 per cent tariff on imported steel derivative products introduced by the Canadian government to “protect and transform” the industry.
The tariff, which comes into effect on Dec. 26, applies to foreign goods containing steel like wires, prefabricated buildings, wind towers, and fasteners, such as nuts, bolts, screws and rivets. The feds say the tariff is intended push demand for homegrown steel and reduce reliance on foreign products.
Kimberly Turner-Briscoe, president of steel fastener distribution company Cardinal Fasteners, says she feels betrayed by the government.
“It seems to me like our federal government has decided they want to be like Trump,” says Turner-Briscoe. “Who do you think you’re protecting?”
In November the federal government introduced a series of tariffs on foreign lumber and steel that Prime Minister Mark Carney says will “empower workers and businesses,” in sectors suffering under Trump’s tariffs. But according to the Canadian Federation of Independent Business, there are few Canadian manufacturers that produce nuts, bolts and screws.
As a result, Turner-Briscoe says she and other businesses like hers will have no choice but to raise prices — a move she says is sure to drive up the cost of everything from cars to new homes.
“There’s hundreds of us with product on the water or about to go on the water that are gonna be hit with this 25 per cent that we cannot afford,” says Turner-Briscoe of the steel products already in transit that will be subject to the new levy on imports.
According to Turner-Briscoe, the announcement came without consultation or warning.
John Fragos, press secretary to Minister of Finance François-Philippe Champagne, says the federal government has developed a targeted remissions order — full or partial relief from federal tax, interest or penalties — that allows importers to apply for an exemption, evaluated on a case-by-case basis.
“The government is working in lockstep with all its partners, including provincial and territorial governments, industry leaders, union representatives, and stakeholders to respond in real time to tariffs and the impact they are having on Canada’s businesses and workers,” said Fragos in an emailed statement to the Star.
The Canadian Steel Producers Association (CSPA), which represents 17 domestic steel producers, “applauds” the tariff that they expect will drive demand for Canadian steel and provide relief for domestic workers during Trump’s trade war.
François Desmarais, a vice president at CSPA, says the tariff is, in part, designed to make up for the hole left by U.S. importers that once made up half of Canada’s steel exports.
“If we want to keep our workers employed, we need to find ways to make up that volume,” says Desmarais.
While Desmarais says that Canadian steel has the capacity to provide for Canadian manufacturers — and at a competitive price that is below that of the U.S. and Europe — small and medium-sized businesses beg to differ.
“While Canada does have a steel and aluminum industry, there’s a lot of products, especially the derivatives, that are not necessarily produced in Canada,” says Michelle Auger, a director at the Canadian Federation of Independent Business (CFIB).
Auger says that while the tariff might be a nudge to spur domestic production, there must be supports in place for businesses that rely on foreign products.
The CFIB was not consulted by the government, which Auger says adds to the uncertainty that looms over Canadian businesses in the midst of Trump’s chaotic economic policy.
This comes at a critical time as Turner-Briscoe says her Scarborough-based business only recently recovered from a pandemic-induced slump and that she can’t take another hit.
She says she and other distributors will be forced to increase their prices by 25 per cent, a move she predicts will have rippling effects throughout the already flailing housing sector as fasteners are, quite literally, the nuts and bolts of the construction industry.
“People don’t realize how much they use it, and it’s used in everything,” says Turner-Briscoe, “building cars, building houses — you name it.”
Auger says the CFIB is hearing similar warnings from a lot of businesses whose operational costs will go up. One member told her that he put his full-time staff down to a four-day workweek to increase cashflow amid the uncertainty.
“I can see if there were an actual industry to save and to protect, but there’s not,” says Turner-Briscoe, whose company has been in business for 75 years. “One of my suppliers in Montreal had to bring up five or six people from Colombia just to keep his machines going.”
In the meantime, Turner-Briscoe says she’s already warned some of her customers of the imminent price hikes that she says are necessary to stay in business.
“I have a lot of customers that we’ve been doing business with for 30 some years,” says Turner-Briscoe. “Shutting down isn’t an option.”
