Canada strikes sanguine, wait-and-see approach on Biden’s latest Buy American gambit

WASHINGTON – Advocates for the construction industry, business leaders and suppliers in Canada are taking a cautious, almost optimistic, stance on US President Joe Biden’s recent State-of-the-Union salvo against the use of foreign building materials in federally-funded infrastructure projects.

Two years into Biden’s tenure, one of his most popular lines of applause — “Buy American” — conjures more frowns than outright terror north of the border these days, a sign that a measure of state protectionism is now seared into the reality of Canada-US relations.

The president modestly stepped up Tuesday’s bid, promising to expand procurement rules for federal projects beyond iron and steel to include components like lumber, drywall, glass and even fiber optic cable, as well as nonferrous metals like copper and aluminum.

The rules allow exceptions in cases where domestic sources cannot meet demand alone or would be too costly – meaning the math is on Canada’s side in practical terms, said Jean Simard, president and CEO of the Aluminum Association of Canada.

“Facts are facts, dates are dates – the US produces about a third of its primary metal needs; they have to import,” said Simard.

“Canada represents about 70 percent of all US imports. That’s not going to change.”

Simard and others say the political context is also important: Biden is now well on his way to the presidential campaign, where he will need the support of disenfranchised working-class voters in America’s heartland to stay in the White House after 2024.

Still, the rhetoric is jarring, coming just a month after Biden and Prime Minister Justin Trudeau gushed at the North American leaders’ summit in Mexico City, and weeks before they will do so again when Biden opens Canada for the first time Visited as President in March.

“If we do these projects — and again I’m being criticized for that, but I don’t apologize for that — we’re going to buy Americans,” Biden said Tuesday during the union’s booth.

“It is fully in line with international trade rules. Buy American has been the law since 1933. But previous administrations — Democrats and Republicans — have struggled to sidestep it for too long. No longer.”

Canada won a major victory last year when Biden’s Inflation Reduction Act, which provides generous tax credits for electric vehicles as part of a historic $389 billion investment in climate change, included plans to prioritize electric vehicles and batteries sourced in North America and were built instead of just the US

That change reflected a practical truth the Biden administration is aware of, Simard said.

“Like it or not, to make the dream come true you have to be very pragmatic about reality,” he said. “The components, the materials have to come from somewhere else in addition to what’s available domestically.”

The BC Lumber Trade Council, part of an industry no stranger to protracted and often acrimonious disputes with Canada’s largest trading partner, called it “concerning” that Biden wants new restrictions on the use of foreign lumber in federal dollar-powered projects.

But even there, the simple truths of supply and demand remain, said Council President Linda Coady. In 2021, the US could only produce about 70 percent of the lumber it needed, and Canada was there to fill the gap.

“We’re trying to better understand what this means for Canadian producers,” Coady said of Biden’s announcement.

“Our focus remains on working on both sides of the border to maximize Canada’s opportunity by providing the sustainably produced, low-carbon wood products we know American builders, consumers and construction workers want and need.”

Both during the period in question on Thursday and in an interview with The Canadian Press, International Trade Secretary Mary Ng reiterated her now-public vow to continue the struggle for workers, manufacturers and suppliers.

“You can count on me and the federal government to stand up for you,” Ng said, citing the spirit of continental cooperation that permeated last month’s summit of North American leaders.

“North American competitiveness means you’ll be working with those who trade together, like Canada and the United States … and where we’re creating a competitive advantage by actually working much more closely together.”

Canada’s Building Trades Unions, the association that represents more than 500,000 construction workers and tradesmen, said a critical shortage of skilled labor poses a much more serious threat to industry in both countries.

“Looking deeper into this issue, we obviously have more agreement than disagreement between the U.S. and Canada on supply chains, trade and ultimately the transition to a net-zero economy,” Executive Director Sean Strickland said in a statement.

“We are confident that Canada and the US will continue to work together on binational policies that are good for infrastructure, the environment and workers.”

This report from The Canadian Press was first published on February 9, 2023.

— With files from Nojoud Al Mallees in Ottawa

James McCarten, The Canadian Press