New federal anti-dumping tariffs that have significantly increased the cost of drywall in Western Canada could result in contractors pulling out of jobs, bankruptcies for smaller companies and increased costs for homebuyers in Victoria, according to homebuilding insiders.
Jason Green of Quality Victoria Drywall said there is a huge trickle-down effect from the tariffs. “The increase is not fair and is not across the country. The fact that there has not been a proper process or even a date that this would happen [so companies working with fixed-price contracts would be given notice in time to cover themselves] seems illegal,” Green said.
Green said some companies are considering backing out of contracts and at this point there’s no longer any real price certainty when offering quotes.
“Bankruptcy for some companies will certainly happen as some bigger companies are locked into government contracts,” he said.
The tariff of up to 276 per cent on gypsum board products imported from the U.S. was imposed by Canada Border Services Agency after a complaint from a Canadian gypsum company that U.S. producers were dumping product into the Canadian market.
The tariff affects gypsum board imported into Canada for use in B.C., Alberta, Saskatchewan, Manitoba, the Yukon and Northwest Territories.
Maurizio Conforti of Conforti Homes and president of the Victoria Residential Builders’ Association, said the result is a bigger pricetag for housing.
“At the end of the day, it will increase the overall cost and, as much as I hate saying it, it ends up going down to the homeowner because a builder won’t build something unless he can make a profit or at least break even,” he said.
Conforti said his drywaller has estimated the increased cost to be in excess of $1,500 for the average new home.
Conforti said he worries about drywall firms that are locked into a price and may be faced with the prospect of taking a big loss.
“I don’t know what the repercussions would be for them,” especially if it’s more than a couple of houses, he said. “Do they walk away from a contract or is it better to take a hit?”
He said he doesn’t think the cost increase will slow the building rate for new homes, but if the market turns, a price increase like this would certainly exacerbate any problem.
Casey Edge, executive director of the builders’ association, said it’s just another challenge that eventually costs the homeowner more money.
“It’s typical in the housing industry that we see these significant increases from a variety of sources,” Edge said. He noted that in Central Saanich, the council is considering a large increase in development charges, and the province is talking about making homes more energy efficient. “There’s this constant layering on of costs and fees which creates challenges for building and selling homes in our region,” said Edge.
