A new tariff on specific types of imported drywall will impact consumers in Nanaimo, according to local contractors.
On Tuesday, the Canadian Border Services Agency implemented an import tariff on standard-sized drywall or gypsum board imported into Western Canada from the United States.
According to the CBSA, the new tariff percentage varies from 105 to 276.5 per cent and depends on the company exporting the material.
Guy Landry, president of Lanson’s Drywall Systems in Nanaimo, said the new tariff ultimately means increased costs for consumers and contractors.
“This is a substantial increase and there are people that are going to be on the hook for this,” he said.
The decision to implement a new tariff comes after CertainTeed, a Pennsylvania-based drywall manufacturing company, filed anti-dumping complaints to the Canadian International Trade Tribunal and the CBSA on behalf of its Canadian-owned entity, CertainTeed Gypsum Canada.
In that complaint, CertainTeed, which operates a drywall plant in the Lower Mainland, claims that Western Canadian companies are importing drywall from United States at substantially lower-than-market prices and are flooding the market with it.
In an e-mailed statement to the News Bulletin, CertainTeed said its reasoning for filing the complaint was intended to create a fair market.
“Our actions are meant to stop this practice and bring a level playing field to the Western Canadian marketplace by having all manufacturers conform to regulatory and legal requirements as prescribed under Canadian law,” Matthew Walker, general manager of CertainTeed Gypsum Canada said in the statement.
According to Landry, contractors and suppliers in Western Canada typically purchase drywall product from three companies: CertainTeed, CDC and Georgia Pacific.
He said while there are Western Canadian factories such as CertainTeed’s facility in the Lower Mainland, they can’t always meet demand of the region and as a result, suppliers end up importing drywall from the United States.
Meanwhile, Ian Stewart, owner of Sherwood Drywall, said he isn’t entirely sure what the new tariff will do in the short and long term.
He said he will be impacted by the upcoming tariff, which will not be grandfathered in on pre-existing orders from the United States that have not already been shipped to Western Canada.
“I’ve got two contracts out for houses that are being delivered right as we speak,” he said. “One was supposed to be delivered today and the [client] just decided to take the [tariff] hit whatever it is.”
Stewart said depending on a variety of factors, the tariff could result in an additional $800 to $4,200 on the construction of a home in Nanaimo.
“One of these big houses that we work on in Hammond Bay … will be between $1,200 to $1,500 extra per house,” he said.
Stewart is still learning all the details about the new tariff, but said he would have liked to have seen the CBSA and the trade tribunal reach out to local suppliers or contractors before making the decision.
“It’s just being thrown in and instantly implemented regardless of who has contracts right now,” he said. “A lot of those people who have contracts, some of the bigger companies, they are in trouble.”
However, Stewart believes the new tariff is just one more cost of doing business.
“In my opinion it’s just another big expense that everyone will have to incur,” he said. “It’s right across the board so if everybody is taxed with it then it is fair. I don’t think it will slow down everything because it is on one little sector of it.”
Manufacturers and those impacted by the tariff can appeal the CBSA decision, but must do so before Dec. 15.