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Exorbitant Duty on Drywall Harms Business, Home Buyers

Ottawa – September 16, 2016 – The Canadian Home Builders’ Association (CHBA) today expressed extreme concern over the recently announced provisional duties on gypsum board (drywall) by the Canada Border Services Agency (CBSA).  CBSA invoked the Special Import Measures Act on September 6th, making a preliminary determination of alleged dumping with respect to certain gypsum board originating from the United States to Western and Northern Canada. Unfortunately, the ensuing duties, effective immediately, will have far reaching detrimental effects on struggling Canadian businesses and economies.

“The scope of the anti-dumping investigation only considers the domestic market for drywall producers, not the impact on the rest of the industry and end-users. There was not sufficient attention paid to the unintended downstream effects of this decision or the implications for the public interest,” explains Kevin Lee, Chief Executive Officer of the CHBA. “These extremely high duties ranging from 105.2% to 276.5%, on about half of the drywall sold in Western Canada, will severely affect the businesses of drywall contractors, builders and renovators, who will face losses on contracts already in place for the months ahead. At a time when our governments are seeking to avoid further housing price increases, this duty will send both house prices and affordability further in the wrong direction.”


“Supply shortages and higher costs for drywall are the last thing we need in the already vulnerable Alberta market,” observes Carol Oxtoby, a developer in Calgary, AB. “We should be concerned that smaller companies may be forced into bankruptcy, as existing contracts may force them to fully absorb cost increases. As the Alberta economy seeks to recover, a duty that harms businesses and damages affordability for home buyers is a major step in the wrong direction. Worst of all, the impacts of higher prices and shortages will be felt severely in Fort McMurray, affecting the rebuild there so important after the fires.”

“You already have a high-priced housing market in Greater Vancouver and the lower mainland,” notes Nathan Stone, a builder in the Fraser Valley of British Columbia. “No one can afford further increases to construction costs. This increase will have a negative impact on new home buyers and homeowners’ renovation projects. Many of our drywall companies are at serious risk with contracts already in place.”

“Although the duty is on imports to our Western provinces, this isn’t just an issue for the residential construction industry in the West,” says Bob Finnigan, national president of the CHBA and builder in Toronto. “This is quickly becoming a national issue.  We are already seeing ripple effects on price and warnings of supply restrictions in Ontario as uncertainty about the supply of drywall grows and Ontario plants potentially start to have to supplying the Western markets. As we try to keep house prices contained in the GTA, increases in drywall prices and potential shortages will only make matters worse.”

The CBSA decision on this came with an immediate imposition of these extremely high provisional duties. While the process is ongoing and final determination is still months away, the negative impacts on industry and consumers of the duty are being felt now.

“While we respect the process, suffering companies cannot wait [until January] to see the final decision on this,” says Lee. “Even if duties are reduced or eliminated in the end of the review process, or if we have to request a hearing into the public interest because the duties are upheld – the damage to industry will be done. In the meantime, efforts to reduce house prices and protect affordability, as well as those to support the economy as it seeks to recover, are being undermined severely.”

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Media Inquiries:
Kevin Lee
Chief Executive Officer