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A drywall contractor in Saskatoon, Sask. that has seen sheetrock prices spike about 30 per cent this fall because of a federal government tariff, believes his company and other drywall contractors in Western Canada are being unfairly penalized by the tariff.
One of the largest drywall contractors in Saskatoon, Titan Drywall (2013) Ltd. does at least 150 homes annually. The tariff adds more than $1,000 in drywall costs to the average home, says company manager Mike Lane.
He says the Canada Border Services Agency (CBSA) applied the tariff after drywall was being dumped from the U.S. into markets in Saskatchewan, Alberta, British Columbia, Manitoba, the Northwest Territories and the Yukon.
The dumping complaint was filed by CertainTeed Gypsum Canada Inc. of Mississauga, Ont. with the CBSA.
Lane says "anyone drywalling for a living" wouldn’t likely be buying the dumped board, noting it is mostly marketed to large home hardware chains.
He says Titan, like most contractors, has a relationship with specific suppliers to deliver the board to where it is needed — each room in the house, for instance, and via hydraulic boom in many cases to second storeys.
While Canadian drywall manufacturers aren’t subject to the tariff, Lane says they have raised their prices to match the price of the imported board with applied tariffs.
He says the homebuilding market in Saskatoon is just starting to get back on its feet after shaky times brought on by slumping oil prices.
"This kind of price increase when we were really slumping a year ago would have been terrible for the industry," he adds.
Still, the tariff’s impact is sizable, he says, adding Titan will have to renegotiate contracts on deals signed prior to the tariffs.
If the tariff is not lifted in the new year things could get worse, he says.
"If contractors start shutting down housing jobs because of an (drywall) increase in prices in a lukewarm market, that will affect framers, electricians, roofers, foundation guys," he explains, adding the job losses could be significant compared to the impact dumped drywall has on the five or so drywall plants in Canada.
Lane says the tariff is set until Dec. 31. It is unknown what steps the government will take after that.
"As far as we know, there is another increase coming Jan. 1," he says.
Lane states Saskatoon drywall contractors are doing work for less money as it is because of economic conditions. It has also been difficult to organize a petition of drywall contractors opposed to the tariff to lobby the government.
Saskatoon and Region Home Builders’ Association CEO Chris Guerette says the association fielded a number of calls by surprised contractor members when the tariffs were applied.
Guerette says while the industry is "stuck between a rock and a hard place," homebuyers will also be affected because drywall price hikes will trickle down and increase home prices.
She says given the "exceptional circumstances" of Fort McMurray, Alta. the federal government has requested the Canadian International Trade Tribunal conduct a fast-tracked inquiry into the dumping issue. The aim is to minimize delays in Fort McMurray’s reconstruction.
Guerette adds if there is a victory for the industry, albeit a small one, it is that the federal government has heard the industry’s calls to lift the tariff
"It means hopefully our industry and homebuyers will not have to suffer as long as initially anticipated," says Guerette. "Still, there is a big impact here."
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