The United States and Canada’s bingo moment

Through the pomp and circumstance of an official visit by a sitting U.S. President to Canada, some important moments fell through the cracks of our fast-paced news cycle. One important exchange was underlined by President Joe Biden when he affirmed Prime Minister Justin Trudeau’s remarks with a resounding “Bingo!” The “Bingo" moment came when Trudeau responded to a question from a reporter about the competitive impacts of the U.S. Inflation Reduction Act (IRA) which includes over US$370-billion in support to American companies to transform their operations to clean, low-emissions production. The entire answer is worth reading, but in the interest of time and space, let me synthesize. Trudeau first pointed out that competition with Americans is nothing new for Canadian companies. However, he noted that the U.S. and Canada are at an inflection point (a line he borrowed from the president’s address to Parliament) in how we envision the production of goods across our integrated economies, and that there is a tremendous opportunity for both nations as the global shift towards low-emissions technologies takes hold. The prime minister highlighted that Canada and the U.S. already enjoy global leadership bringing clean solutions forward, from battery supply chains, to aluminum, to low-emissions steel. Finally, the PM came to a moment of truth, stating: “there’s long been a bit of a weakness, I think, to our argument … that says our model is the best one … we sort of turned our back to the fact that it relied on cheap imports of goods and resources from parts of the world that didn’t share our values, and weren’t responsible on the environment, or on human rights, or on labour standards.” To which his American counterpart replied with an affirmative, “BINGO!” Well put, Mr. President. We can’t build a green economy on the backs of dirty imports. Globally, steel production in China, India, and elsewhere has a climate footprint far greater than Canadian and American industries. The Canadian steel industry sees the important role that commodities like steel will play in the economic transition as significant green infrastructure investments are made on both sides of the border. However, this green transformation cannot be built with high-carbon goods from jurisdictions that practice unfair trade. While the U.S. has acknowledged this challenge with Buy America, clean procurement policies, and domestic content requirements built into their green incentives under the IRA, Canada has not. As a nation, we need to get serious about the role that cheap, high-carbon imports are playing in our marketplace at the expense of cleaner Canadian and U.S. producers. Over the last decade, offshore imports into Canada have increased from 19 per cent share of our market to 41 per cent of our market in 2022. This startling growth is made even more problematic when, in 2022 alone, hundreds of thousands of tonnes of steel came from countries with active tariffs against them. Catherine Cobden is the president and CEO of the Canadian Steel Producers Association. Photograph courtesy of Catherine Cobden Inaction or even a slow response to high-carbon, unfair imports will result in job losses, and put entire communities supported by our industry at risk, all the while further eroding our vision of being stewards of the environment; supporters of good, safe, middle-class jobs; and fundamental respect for human rights and the rule of law. Faced with this real and persistent problem, we continue to call for a timely and responsive trade remedy system along with improved transparency on import monitoring at our borders. At the same time as unfair trade grows, the Canadian steel industry has partnered significantly with the federal and provincial governments to transform their operations and reduce greenhouse gas emissions. We are proud of our progress to date, which will see our collective investments translate to a 45 per cent reduction of emissions by 2030. These partnerships are needed and welcomed. But if those same governments turn to build the green infrastructure our country needs with steel or other products from countries with weaker labour and environmental standards—that repeatedly thumb their nose at international trade laws—it will be a serious disappointment. As Biden left Canada at the end of March, there were more indications that further co-operation is on the way. A joint statement signals a strong willingness to work together to promote the trade of low-emissions goods, including 'green' steel, and it was shortly followed by a Canadian federal budget that put forward an expanded climate action tool kit and a commitment on reciprocal procurement. While these expanded tools are welcome, we see no indication of measures to promote the use of our lower-carbon steels. While reciprocal procurement holds promise by ensuring that only suppliers who live up to their responsibilities can participate in our federal and sub-national procurement projects, it will only bear true value to Canadian jobs and our industry if the policy is implemented swiftly and with real purpose. Prime Minister Trudeau and President Biden both recognized that we are at an inflection point. Will we seize the moment and realize the potential that Canada and the United States have in leading a meaningful transition? To do so, we must continue urgently to deepen our supply chain alignment, foster new investments in green infrastructure and industrial decarbonization, and combat unlawful trade practices. Catherine Cobden is the president and CEO of the Canadian Steel Producers Association. The Hill Times