News Alert: CHBA actions to address anti-dumping drywall duty

To: Builder, Renovator and Developer Members
CHBA National Board of Directors
Provincial and Local Executive Officers

From:  Kevin Lee, CEO

As noted in other CHBA communications last week, the Canada Border Services Agency (CBSA) has made a preliminary determination of dumping into Canada drywall originating from the U.S., and accordingly has imposed a provisional duty on U.S. drywall ranging from 105.2% to 276.5%, effective September 6, for drywall imported into Western Canada (http://www.cbsa-asfc.gc.ca/sima-lmsi/i-e/gb2016/gb2016-np-eng.html).

CHBA is very concerned about the immediate effect this will have on Western Canadian members, as the duty applies to drywall destined for use in British Columbia, Alberta, Saskatchewan, and Manitoba, as well as the Yukon and Northwest Territories. CHBA has already received evidence that this will have ripple effects on price and supply allocations for members all across Canada.

CHBA became aware of this issue a few weeks ago, and after speaking with HBAs, members and drywall suppliers, submitted its concerns to CBSA to inform the first stage of its investigation. CHBA’s concern focused on the impact that an immediate application of a large duty on drywall would have on supply and price in Western Canada, especially on already-signed contracts.

With the decision rendered by CBSA on September 6 to impose exorbitant duties on U.S. drywall, CHBA has engaged with trade experts and legal counsel to explore additional options to address the issue. As a first step, CHBA has submitted to participate in the Canadian International Trade Tribunal's (CITT) inquiry as to the extent of injury to the domestic market, where it hopes to see the duties reduced or eliminated.

The nature of the CITT’s anti-dumping investigation looks only at the industry in question—in this case the drywall industry—hence damages to the residential construction industry, as users of the product, do not get due consideration at this stage.  Such consideration can only be given very late in the process.  However, given the serious nature of the potential damage to our members, CHBA, in consultation with members and provincial HBAs, is pursuing several courses of action to address the matter.
If the CITT upholds the duties through the next stage of the process, CHBA believes it has a very strong case for an appeal based on the public interest for housing affordability, the vulnerability of housing markets in Western Canada and the impact this duty has on drywall supply and price throughout Canada.  Further, although that process is typically begun after the CITT determination, CHBA is engaging politically to raise awareness of this issue and potentially accelerate action.

After reviewing the situation during its September meeting today, the CHBA Executive Committee has approved that the CEO pursue this matter with vigour on an urgent basis, determine what Association resources can be devoted to this issue, and has appointed a sub-committee to coordinate work.