Work continues at the new site for the city’s municipal services building on June 15. (Mike Thomas/Yukon News)

Yukon contractors start to feel the pinch of Canada-U.S tariff spat

‘I think it’s absurd that we have tariffs because of national security…. It’s ridiculous’

Contractors working on projects for the Yukon government may be exempt from having to pay tariffs on steel and aluminum.

The government said construction contracts include a clause which stipulates that contractors will be protected from any increases in material costs due to tariffs.

“In each case a contractor would give (us) notice that they have been charged the tariff and then they provide the project manager the evidence, like a receipt that shows the cost,” said Alicia Debrecini, spokesperson for the Department of Highways and Public Works.

“And a change order could be done so that [the Government of Yukon] could pay that difference as per the contract.”

On June 1 U.S. President Donald Trump imposed tariffs of 25 per cent on steel imports and 10 per cent on aluminum, citing “national security.” The Canadian government said it will impose retaliatory tariffs on July 1.

The price of steel has already risen up to 40 per cent since January. There’s speculation that suppliers raised costs in anticipation of the incoming tariffs. Joe Zuccarini, project manager at Duncan’s Limited a Whitehorse welding firm, said the price has been fairly stable for the last five years.

“I think it’s absurd that we have tariffs because of national security…. It’s ridiculous.”

The territorial government said the Yukon’s provisions only apply if the change in material price is a result of a tariff, not just fluctuation in the global market.

Wayne Tuck, manager of engineering services for the City of Whitehorse, said he doesn’t believe the city has a similar clause built into its contracts.

Tuck said contractors are paid a lump sum for the job, and fluctuating prices is a risk builders take.

“I certainly feel sorry for the contractors, but at this time I’m not sure if there’s anything we can do,” he said.

The city receives funding from the Yukon government for some of its projects, but Tuck said the city is responsible for administering all of the contracts.

Philippe Vincent is a project manager at Klondike Welding. His company has been working on the city’s new operations building. The project requires a million pounds of steel.

“Right now that extra money is coming out of our pockets, which is big, big, big money,” he said.

“(A solution) would actually save us so we can still keep our margins and do our work like we’re supposed to.”

In a letter to Yukon Premier Sandy Silver dated June 11, Yukon Party interim leader Stacey Hassard expressed his concerns about the impact tariffs on aluminum and steel will have on local businesses and requested that the government include provisions to protect against price fluctuations.

“There’s been cases where the government has put in a fuel calculator index for price fluctuations,” Hassard said in an interview June 13.

“So this is just an idea, to kind of give the government somewhere to start if they haven’t already started themselves.”

Debrecini said the government has agreements to provide fuel at pre-arranged prices to suppliers when required. Prices are checked every two weeks and adjusted accordingly for increases and decreases greater than one cent. The government does not have have similar agreements for purchasing steel.

Zuccarini and Vincent said ultimately the additional costs will fall on consumers.

Peter Turner, president of the Yukon Chamber of Commerce, said starting July 1 the Yukon will likely see an increase in cost of things like appliances and camping gear when Canada implements their reciprocating tariffs against U.S. steel and aluminum. Canada exports a large amount of its steel to the United States, and he said there will likely also be slowdown in the industry and job losses.

“Nobody wins on (a trade war),” said Turner. “That’s why in general, for the last 50 years, the industrial world has focused on reducing tariffs and putting in place free trade as much as possible.”

Turner said this is not just a territorial challenge. The federal government is in a period of consultation, and has invited businesses to write in with their comments and concerns.

The Government of Yukon has provisions to protect contractors from financial losses, but companies are still likely to feel the impact of tariffs.

“Really what it comes to in Canada (is) can businesses pass along their increased costs to their end consumers?” said Turner.

While the Yukon is not a producer of steel or aluminum, the territorial government has signed a joint letter to Trump from the Pacific NorthWest Economic Region, expressing its concern about the trade dispute. “Our economy does best when Canada as a whole does well,” Yukon cabinet spokesperson Sunny Patch said in an email.

The Yukon Party has also talked to people in industry with their own concerns, and wants to help in any way that benefits the Yukon economy, Hassard said.

“We certainly hope that it doesn’t have too many negative impacts on us here in the Yukon, but time will tell.”

Contact Kallan Lyons

Just Posted


Wyatt’s World for June 14

Frostbitten big toe finds new home in Dawson City’s infamous cocktail

Nick Griffiths, who ran the Yukon Arctic Ultra in 2018, donated two toes to the Downtown Hotel.

Vuntut Gwitchin First Nation suspends deputy chief after impaired driving charges

Deputy Chief Cheryl Charlie was charged June 6. Councillor Darius Elias has also been suspended.

Firefighters called to Whitehorse Elementary School over code violations

Door that occasionally wouldn’t open from inside among many issues that need attention, parent says

Give Hope Wings fundraiser launches Saturday from Pitt Meadows

Flying marathon will benefit low income Canadians needing flights for medical treatment

Driving with Jens: Keeping pets safe in your vehicle

In my last column I discussed ways to avoid the tragedy which… Continue reading

Yukonomist: Whitehorse Troughbillies

Yukon could take its hot rocks to the bank

ParticipACTION Community Better Challenge spurs mountain bike races in Whitehorse

“I have to remind myself to do that sometimes – just slow down and look around.”

Whitehorse FC Premier U15 boys finish fourth despite injuries and short bench at Slurpee Cup

“They worked super hard and were more hungry for the win than the other team”

2019 Yukon Gymnastics Championships showcase Whitehorse talent

“It was a nice way to end off our season”

U Kon Echelon holds multi-stage Yukon Energy Road Cycling Championships

The 2019 Yukon Energy Road Cycling Championships were held in and around… Continue reading

Cyclists race in the rain at Southern Lakes Yukon GranFondo

‘It was a good number for the conditions’

Most Read