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September 2020

On August 6, 2020, the United States announced the imposition of tariffs of 10 per cent on imports of certain aluminum products from Canada, which took effect on August 16, 2020.

In response to these measures and in accordance with the May 2019 Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum, Canada intends to impose countermeasures on imports from the U.S., representing a proportionate amount of Canadian aluminum products affected by the U.S. tariffs. The Deputy Prime Minister has valued the retaliatory measures at $3.6-billion.

The federal government has drawn up a list of products that may be subject to countermeasures, and therefore subject to a 10 per cent surtax. These countermeasures will take effect by September 16, 2020 and will remain in place until the U.S. eliminates its tariffs against Canada.

What Does this Mean for Developers and Builders?

The rising cost of building materials is harming housing affordability on both sides of the border as the trade war on softwood lumber, steel, aluminum and other imported materials and equipment exacerbates price volatility and drives up housing costs.

The residential construction industry is currently facing critical shortages and price increases for a variety of building materials, which has led to project delays, cost increases that must be absorbed by the builder, and an increase in house prices or costs of renovations. An additional cost on aluminum, particularly to those with established fixed-price contracts, would be even more prohibitive at this time. The additional costs that would result from tariffs will create challenges for those with existing projects, and those looking to plan new projects and developments. It will cause challenges in budgeting for products and materials and establishing long-term pricing for new contracts and sales. This is particularly concerning as the duration of the tariff countermeasures on aluminum is uncertain, and sector recovery and housing affordability remain major concerns.

Recognizing the need to respond to U.S. trade aggressions, CHBA encourages the federal government to implement as few tariffs as possible on items implicated in residential construction. In general, this includes essential materials sourced through U.S. suppliers such as windows (including wood and fiberglass), doors and their frames, flashing and roofing products, wiring and electrical parts, and photovoltaic racking and supplies (other than solar panels) that are made in, or require raw materials from the U.S.
To that end, CHBA is engaged with federal officials and responded formally to the Notice of Intent issued by Finance Canada, identifying several items listed as potentially subject to countermeasures, that, if included, could have a serious impact on housing affordability at a critical time for Canada’s economic recovery.