The ongoing tariffs on U.S. metal imports as well as delays in receiving federal rebates and exemptions are hurting parts suppliers’ competitiveness and burying them under a mountain of paperwork, industry executives warn.
“The longer they go on, the longer the Canadian supply chain is going to have to factor them into their pricing,” said Jonathon Azzopardi, president of the Canadian Association of Mold Makers. “When you’re a supplier and your main component is steel, and it’s sometimes 70 per cent of your costs, you have no choice, you can’t afford to have a 25-per-cent surtax on top of that metal and still survive.”
By the time Clover Tool Manufacturing received a federal exemption from tariffs on certain U.S. metal imports,the company lost out on new business worth about $25 million from a long-time U.S.-based Tier One customer, said George Zeni, vice-president of the company, which employs 300 people at two Ontario plants.
“At first they said ‘you’ve got to eat the tariffs, and if you don’t get your exemption [from tariffs] we have to consider bringing the work back in-house because we don’t want the headache of all these tariffs,’” said Zeni. “We bid on the new business, but they decided to award it south of the border.”
The contract was for work on the next-generation Ford F-150 pickup, which is the top-selling vehicle in Canada and the United States.
“It hurts,” said Zeni.
Compounding the problem, said Azzopardi, is the lengthy wait some suppliers are enduring for reimbursement from the federal government.