Thirty-four per cent of the steel used for the Centre Block renovations is from foreign sources, reveal recent documents tabled in the House of Commons. 

Prime Minister Mark Carney (Nepean, Ont.) has increasingly pledged to crack down on foreign steel to protect the domestic industry. 

The ongoing Centre Block remodel has used more than 4.2-million kilograms of steel. Of that, more than 2.7-million kilograms originate from Canada, and more than 1.4-million kilograms—or 34 per cent—is foreign sourced, including more than 180,000 kilograms from the United States. 

Canada’s steel industry has been subject to a 50-per-cent levy for exports to the U.S. When an initial 25-per-cent tariff—which has since been doubled—was imposed in March, then-Public Services and Procurement (PSPC) minister Ali Ehsassi (Willowdale, Ont.) issued a letter to suppliers telling them to prioritize Canadian sources, according to PSPC spokesperson Michèle LaRose. 

The PSPC documents indicate that contracts awarded after the imposition of the U.S. tariffs include a clause to enable contractors to procure steel from Canada when possible. In such a case, PSPC would pay any premiums that come with the change. 

LaRose told The Hill Times that no premiums have yet been incurred. 

She noted that the “largest structural steel tender for the project recently closed” with all bidders being Canadian.

The documents were released in response to an Order Paper question by Conservative MP Ned Kuruc (Hamilton East–Stoney Creek, Ont.). 

In a statement to this newspaper, Kuruc’s office said that “Conservatives do have concern that Prime Minister Carney and this Liberal government fail to stand up for Canadian industries,” remarking that “they’re forfeiting Canadian steel and aluminum to foreign countries.” Kuruc’s office called for the passage of the Canada Sovereignty Act—an initiative floated by Conservative Leader Pierre Poilievre (Battle River–Crowfoot, Alta.) in August—noting that it would “remove the barriers that still exist which block our industries,” citing Bill C-69, the emissions cap, and the industrial carbon tax. 

Centre Block is in the midst of a more-than-decade-long renovation. Construction is expected to be completed by 2030 or 2031, with a cost of $4.5-billion to $5-billion. As of June 14, $1.27-billion has been spent, according to the most recent PSPC release.

In June, Carney announced tariff rate quota changes on non-U.S. steel that was intended to give domestic supply a larger chunk of the market. Canada imposed tariffs on U.S. steel in response to the American levy in March. 

The PSPC documents don’t indicate when the contracts were signed with the steel manufacturers. 

Use of foreign steel ‘too high,’ says union

United Steelworkers researcher Guio Jacinto said that, ideally, all steel used in the renovations would be sourced from Canada. 

“I would think that 34 per cent [of foreign steel] is too high,” he said. “Saying that, we do obviously recognize that there are some limitations to Canadian steel production and production capacity in terms of certain products in Canada.” 

He said some products aren’t made at all in the country or in enough quantity to satisfy the need. 

“So we understand that if some of the steel being used in the Parliament renovations are not fully front made in Canada and that there are some imports,” he said. “But our desire and wish is that content would be maximized.” 

Jacinto said, ideally, Parliament should be constructed with fully Canadian steel, but that may not be realistic given the current state of the market. 

“That part speaks to the need to retool and to make sure that we do have that domestic capacity in place,” he said, remarking that the federal government does recognize the need to retool the domestic steel industry.

“But that’s not in place right now,” he added.

Jacinto said this work should have been done before the start of the latest trade war with the U.S.

“We’ve consistently pushed that Canadian taxpayer-funded projects should privilege Canadian-melted and -poured and -processed steel,” he said. “It’s unfortunate that it took a trade war with the United States for the federal government to—by necessity—prioritize Canadian-sourced steel in procurement.” 

Canadian Steel Producers Association vice-president of trade and industry affairs François Desmarais said that the current level of foreign steel being used in the renovations is “not as bad as it could have been.” 

He noted that 65 per cent of steel consumed in Canada comes from a foreign source. 

He said that PSPC did what it could to have a “decent ratio” of Canadian steel used in the construction. 

“So that’s not bad. It makes me very optimistic about the whole ‘Buy Canadian’ policy,” he said. 

He said that the federal government should be using Canadian-sourced steel to the “maximum of our capacities.”

“We’re not expecting the Canadian government to reinvent the wheel or to procure Canadian when you don’t have that production in the country, but for the goods that we make in this country, it should be Canadian,” he said. 

A question of how ‘Canadian’ the steel is 

Jacinto said that the amount of the steel used in the Centre Block remodel that is melted and poured in Canada could be lower than what PSPC is listing as originating domestically. 

He said that being of Canadian origin doesn’t necessarily mean that steel was melted and poured in Canada. 

“There is a distinction between country of origin and country of melt and pour,” he said. 

PSPC didn’t respond before publication deadline to a question about the quantity of the steel used in the Centre Block renovations that was melted and poured in Canada. 

Jacinto noted that some of the manufacturers that are listed as having steel that is Canadian sourced don’t produce raw steel, and the question is whether the steel they roll is from within the country. 

The Hill Times asked the seven manufacturers that are listed on the PSPC documents as supplying Canadian steel. Only Gerdau and Stelco responded, indicating that their steel is poured and melted in Canada. 

Jacinto said he wants the government to be buying steel that is not only rolled in Canada, but also melted and poured domestically. 

“That’s how you protect our crude steel-making capacity. It’s not as beneficial if that stuff is coming from overseas or even from the U.S.,” he said. 

nmoss@hilltimes.com

The Hill Times

Steel used in the Centre Block renovations

—Source: Public Services and Procurement Canada

 

Neil Moss is a reporter with The Hill Times who covers federal politics, foreign policy, international trade, Canada-U.S. relations, and defence, as well as leading the newspaper's annual Top 50 list of foreign policy influencers. See all stories BY NEIL MOSS