Bill Morneau is preparing to use emergency safeguard measures for the first time, to respond to the risk of a surge of cheap foreign steel imports.
The federal finance minister launched a 15-day public consultation process Tuesday for seven steel products the minister said had seen recent increases in imports, products that include steel plate, stainless steel wire and wire rod.
The Trump administration's protectionist measures continue to reverberate across a global industry already producing too much steel. Canada wants to avoid the dumping of inexpensive imports, something that damages its domestic industry and threatens jobs.
This country also wants to avoid being accused of being a "back door" for cheap steel entering the U.S. as inexpensive foreign product is imported into Canada — perhaps modified in some fashion — and then exported onwards.
Morneau is therefore reaching for a legislative tool Ottawa hasn't used before — which allows him to apply tariffs first and investigate the rationale later: Section 55 of the Customs Tariff Act.
Safeguards available under the emergency measure can take the form of surtaxes or import quotas, or some combination of the two. Under World Trade Organization (WTO) rules, countries can apply safeguard measures to protect their domestic industries only under specific circumstances.
Canada has never used the Customs Tariff Act emergency measures, which allow the minister to put duties in place first, and then hold an inquiry through the Canadian International Trade Tribunal to hear from affected industries and analysts and determine if "goods are being imported under such conditions as to cause or threaten serious injury to domestic producers of like or directly competitive goods."
The tribunal could either overturn or support the minister's decision.
