Contractors and builders across Canada were hit with an increase in tariffs on drywall in September, courtesy of the Canadian Border Services Agency (CBSA). The result: tariffs of drywall being brought into Canada from the US now range from 105% to a 276%. In simpler terms, if drywall costs $100, to bring it into Canada, it could cost an additional $276.
The introduction of this tariff was done in effort to help Canadian producers of gypsum board (drywall) by stifling US producers’ ability to bring in their product into the Canadian market, which according to British Columbia-based CertainTeed Gypsum Canada Inc., were pricing their products so low that Canadian manufacturers couldn’t compete.
While this change is great for Canadian producers, it’s potentially bad for contractors, builders, and homeowners.
Phillip Hochstein, president of the Independent Contractors and Business Association of B.C. told CBC News that it could add “$2500 to $3000 to construction costs of a home”. This is likely to affect many contractors, builders, and homeowners as it is estimated that 40 to 60 per cent of drywall used in residential projects is imported from the US.
Contractors may have to pull out of jobs and small firms could go bankrupt altogether - it’s no secret that increasing costs affect a company’s bottom line. There may be opportunity for Contractors to protect themselves on current projects so long as contracts (under the Canadian Construction Document Committee (CCDC)), contains a clause recognizing duties imposed after a bid can increase the contract price accordingly. However, not all contracts contain this clause.
What will remain to be seen is whether those who will directly benefit from this new tariff - the Canadian producers, can keep up with the demand from the Canadian market. Currently, there are only three drywall manufacturers in Canada located in Vancouver, Calgary, and the prairies. Best case, they can meet the demand across the country; or, other Canadian producers begin entering the market helping contractors, builders, and homeowners.