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CABC makes case for open flow of construction materials

Don Wall
CABC makes case for open flow of construction materials

The Canadian American Business Council (CABC) has released a report on Canada/U.S. cross-border trade intended to highlight the breadth of the industries involved and the importance of critical sectors during the COVID-19 crisis.

Construction suppliers figure prominently in the survey, especially cement production and trade. The Canadian cement industry exports 40 per cent of its product to the U.S.

Canadian steel is also identified as important to supply chains as a supplier to the infrastructure, transportation and energy sectors among others. “Keeping the border open to steel products and its inputs, such as scrap and iron ore, as well as essential employees, will help to further fortify and preserve critical North American supply chains…while maintaining fair steel trade between both countries,” the report states.

“If we don’t keep this backbone of the economy going, we are going to extend the time the recovery will take, policy-makers are getting that,” commented Steve Morrissey, executive vice-president of the Cement Association of Canada, a member association of the CABC. “I hope the trade unions or others who are trying to sensationalize the conditions out there don’t override the fundamentals that we need to keep in place. Because if we don’t have construction out there, what else is going to be sustaining any actual liquidity in the economy?”

Unessential cross-border travel such as the leisure sector has been restricted during the pandemic but business travel and commerce remain flowing. U.S. President Donald Trump briefly raised the idea of stationing troops near the Canadian border, stoking fears that commercial travel might be affected at some point, but Morrissey said policy-makers on both side of the border are intent on making sure that does not happen.

 

You can’t build anything without our primary building materials, so they are essential,

— Steve Morrissey

Cement Association of Canada

 

“I think they are being heard,” said Morrissey, speaking of advocates for open trade. “Governments right now are focused on the most important thing, health and safety, and the second most important goal is looking after workers and employees who have been impacted.

“But I think everyone understands in the background the necessity of keeping the economy flowing.”

Domestic production of cement across the country is 14.5 million tonnes a year. Domestic consumption is nine million tonnes, meaning, Morrissey said, exports to the U.S. amount to almost five million tonnes.

Even with construction slowdowns in jurisdictions such as Quebec, Pennsylvania and New York state, Canadian producers are reporting they are still busy, Morrissey said.

“In some states where they can’t manufacture cement any more, but they still have active projects going on, and with the depreciation of the Canadian dollar, our product is even more advantageous,” he remarked. “So, because of the confluence of events, our exporting is actually a positive right now.”

Shipping is relatively quick now with less road traffic, Morrissey said. Cement is shipped to consumers by truck, train and barge.

The March 26 CABC report also called for support to ensure that critical energy infrastructure continues to cross the border freely to ensure vital supplies of natural gas, crude oil and refined petroleum products are maintained.

“Keeping the border open for the movement of parts and workers operating, maintaining and constructing pipelines will help our economies both now in these difficult times and later as we recover and restart,” the report stated.

Said Morrissey, “I’d say all primary building materials, wood, concrete and steel, and probably aluminum too, you can’t build anything without our primary building materials, so they are essential.”

The focus on trade during the current disruption might result in closer ties between the trading partners in future, the cement executive predicted.

“I think it will be interesting to see, once we come off the peak, how governments north and south are going to respond. Is it going to be a stronger relationship between Canada and the U.S. in our integrated supply chain? I think so,” Morrissey said.

 

Follow the author on Twitter @DonWall_DCN.

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