Morneau launches consultations on safeguards to prevent steel flooding

OTTAWA – The federal government is planning to introduce safeguards to tackle a flood of steel entering the Canadian market due to “exceptional circumstances.”

Finance Minister Bill Morneau said the government is embarking on a 15-day consultation to explore safeguards it can use to mitigate potential negative effects to Canadian steel producers in the event foreign steel producers divert U.S.-bound product to Canada because of recent U.S. tariffs on aluminum and steel.

“Canada is now at risk of a surge,” Morneau, who noted that the country is already seeing an increase in imports, said on Tuesday.

“We want to make sure we keep a market that is stable and that we deal with import surges in a way that doesn’t harm businesses and as a result harm Canadian producers and workers.”

Morneau, who announced the consultation at Hamilton, Ont.-based manufacturer ArcelorMittal Dofasco, said the government’s research into the steel industry will focus on steel plates, concrete reinforcing bars, energy tubular products, hot-rolled sheets, pre-painted steels, stainless steel wires and wire rods.

He said the government has already been “extensively consulting” with allied countries about what can be done to protect Canada from surges, but the consultation will expand to hearing from Canadian producers and users of steel.

Canada, he said, is allowed to introduce safeguards under international trade rules if “exceptional circumstances” are met. He said the risk of harm to Canadian steel producers and workers would qualify and if the government feels the issue is severe enough, it could refer it to the Canadian International Trade Tribunal.

He called the U.S. tariffs that kickstarted the need for the consultation “unacceptable,” but said the consultation is very separate from the ongoing talks between Canada, the U.S. and Mexico to rewrite the North American Free Trade Agreement at the behest of U.S. President Donald Trump.

“We have clearly seen some tariffs that have been put in place that we don’t agree make sense based on our strong and enduring relationship with the U.S.,” he said. “Tariffs are bad for everyone? we obviously are going to continue to advocate not only to roll back these tariffs, but not to consider any further tariffs because we think they are destructive.”