New Canadian stainless steel tariff could lead to massive price increase on infrastructure projects: industry experts

A new tariff in put in place by the Canadian government has some local business and municipal leaders concerned.

Canada’s largest stainless steel distributor says a new Canadian tariff on stainless steel will heavily impact the cost of infrastructure projects.

“I won’t say the job but it was a $2 million order of stainless steel for a plant in Toronto, and now it will cost $2.5 to 3 million just for the raw costs, and that is just one project of thousands across the country,” Shane Gough, the general manager of Pinacle Stainless Steel, told CTV News on Monday.

Gough said his company’s clients, which include municipalities across the country, are facing massive price hikes on stainless steel orders, adding that they – along with taxpayers – will pick up those extra costs, if it’s a municipal job.

“I think every single client is concerned. They took this order a year ago and now they will face these added costs,” he said.

The issue is related to the government of Canada implementing tariff rate quotas this summer on imports of steel mill products from non-free trade agreement partners.

At Pinacle’s Mississauga location, pipes imported from Taiwan are cut up, molded, and prepared for use in critical infrastructure projects nationwide.

“Water (treatment,) wastewater, oil and gas, the LNG pipeline, the SMR projects coming up for the OPG power plants, shipbuilding, hospitals, food/beverage, agricultural, farming,” he said.

The feds, however, disagree, saying in a statement that this new levy is a good thing.

“This measure will help stabilize the Canadian market and prevent harmful diversion of foreign steel from third countries into Canada while minimizing impacts on Canadian importers and downstream users,” the Government of Canada wrote.

“A 50 per cent surtax will be applied on all imports of covered products that exceed the specified quantity threshold from non-FTA partners.”

Gough, however, says Canada should be exempt from this new tariff as the country only produces a limited amount of stainless steel in limited amount, not enough to meet demand, and the country imports far more than it produces.

Industry experts have written to provincial and federal officials calling for an exemption to stainless steel, which they believe was an oversight when the tariff rate quotas were put in place.

With files from CTV News Toronto’s John Musselman