Canadians, hoping that Prime Minister Mark Carney’s first meeting with President Donald Trump would help reset and repair the relationship between two longstanding allies, were left wanting. The meeting, while cordial, brought no relief from U.S. tariffs on Canadian exports of steel, aluminum, lumber and autos. Nor was there any sign the president intends to dial back his chaotic, multi-front tariff war.
That leaves Canada in a very tough spot. A prolonged conflict with our largest trading partner is no path to prosperity. It will hurt Canada significantly — shrinking our economy and reducing incomes for many families. And with President Trump convinced tariffs are a tool to force other nations to bend to America’s will, we may be stuck with this brute force diplomacy for as long as he occupies the White House.
So far, Ottawa has responded with retaliatory tariffs on a limited number of our imports from the United States. But retaliatory tariffs come with real risks and costs, as tariffs are effectively a tax paid by Canadian businesses and consumers. In construction, they hit especially hard when applied to goods used to build the homes, infrastructure and facilities — paint, resins, doors, windows, electrical parts, mechanical equipment, steel and other building materials all cost more if we apply tariffs.
Steel, in the form of rebar, is a crucial input in construction and a prime example of how tariffs often backfire, leaving the economy and consumers worse off.
The federal government has imposed retaliatory tariffs on U.S. steel, but also stiff duties on steel imported from Europe and Asia. While action against predatory jurisdictions like China makes sense, sweeping Canadian tariffs on all foreign steel are economically harmful — especially to Western Canada, which produces very little steel.
Most builders in Western Canada have two options: Import steel from mills in Eastern Canada or from suppliers in the United States, Asia or Europe.
Unfortunately, shipping Canadian steel from east to west isn’t cost-effective — it’s simply too heavy to move cheaply by rail. Shipping rebar from Asia and the Middle East to B.C. by sea costs $39 to $69 per metric tonne. To bring it by rail from Ontario or Quebec costs $200 per tonne. If you want to further erode affordability in Metro Vancouver or drive the cost of public infrastructure projects even higher, just force builders to overpay by five times to move Eastern Canadian steel here.
What about expanding our steel fabrication capacity in Western Canada and building new mills? Great idea, but the big challenge here is Canada’s uncompetitive investment climate, slow-moving project assessment and permitting processes, and pervasive anti-business sentiment. We have made it very difficult to invest, start and grow a business in Canada, which lies at the heart of our productivity crisis and the comparative decline in incomes over the past decade when measured against every other advanced economy.
Canada’s domestic steel sector, while important, is relatively small — directly employing just over 20,000 workers, primarily in Ontario and Quebec. In contrast, the construction sector employs 1.6 million Canadians, including more than 450,000 in B.C. and Alberta. A tariff policy that works for Eastern Canada but not for Western Canada runs counter to calls for a “Team Canada” response to Donald Trump.
To be clear: We are 100 per cent pro-Canada in this trade war. But “Team Canada” cannot stop at the Ontario border. And our policy responses must be smart and creative — Ottawa has been playing this tariff game with steel and penalizing western Canada for over a decade.
Western Canada’s steel supply chain should not be on the retaliatory tariff menu. Homebuyers, taxpayers and project owners in the west simply cannot afford the bill at the end of this meal. Regional sensitives and pressures must be recognized by Ottawa — on this issue, Prime Minister Carney has an opportunity to demonstrate that he understands not only basic economics but also Western Canada.
Ottawa’s focus should be on making Canada a better place to invest and do business and recognize that its current steel tariff strategy only serves to drive up costs for construction and manufacturing, punishing families, taxpayers and large sectors of the economy to protect a few.
The west wants out – out of these retaliatory steel tariffs.
Chris Gardner is president and CEO of the ICBA.
