Good morning. My name is Andrew Mindell. I am the president of UBS Industries. Sitting next to me is Jim Kerr, our general manager.
Our company is a specialty steel distributor and agent that is located in Coquitlam, British Columbia. The product we're here to talk about today is known as in-line galvanized tube. It's a specialty tube product that is essential to small and medium-sized businesses across western Canada, representing over 2,000 jobs. The product is used by playground manufacturers, covered shelter manufacturers and farmstead equipment manufacturers, to name a few.
Today, we're here to answer any of your questions, but I wanted to share with you our journey through the steel tariffs process, as a small business from British Columbia representing many other small businesses across western Canada.
When the steel tariffs by the United States were first announced, our business was unaffected, as we are an importer of steel from the United States and not an exporter. Many of our customers are exporters, but they export finished products that were not susceptible to the tariffs.
Shortly after America imposed their tariffs, Canada's counter-tariffs were announced and our in-line galvanized tubing was captured in the original counter-tariff proposal. Despite being an extremely specialized niche steel product, in-line galvanized tube was captured under the original counter-tariff proposal as category 7306, which captures iron or steel—excluding cast iron—tubes, pipes and hollow profiles, which are not seamless.
My understanding is that imports from the United States into Canada, within this category, equate to approximately $975 million annually. Between ourselves and our customers, our imports would represent an extremely small fraction of this annually. Needless to say, we are a small fish in a big pond. Our product is so unique that it is only available from a United States manufacturer. It is not available in Canada or from any international trading partners.
As a business, the counter-tariff measures stood to become a major issue for us and our customers. For most of our customers, in-line galvanized tubing is the major material input cost in the manufacturing process. The result of the countermeasure was such that our customers would be at a 25% material cost disadvantage, as compared with their U.S. competitors, and the U.S. competitors would be able to export tariff-free into Canada because they would be exporting finished product.
The effect of the counter-tariff, as it related to our specific product, was such that U.S. companies were being strengthened and Canadian companies were being placed at a competitive disadvantage. This put us and our customers in a terribly uncomfortable, uncompetitive position that would see no harm to the U.S. mills, given that the dynamic of the supply was only available in the United States.
As a company, we were very understanding of Canada's position to implement the counter-tariff, but felt that we were likely an unintended consequence. Having no political affiliation and being a small business in Coquitlam, we simply took Minister Freeland's advice, through the media, to submit a request for exclusion.
As part of this process, we reached out to our local MP's office, which quickly put me in touch with Joyce Murray. Joyce Murray led us to Global Affairs in Ottawa, which led to us Ian Foucher in the Department of Finance. Ian was responsive and sympathetic, but was very honest that there would likely be some unintended consequences, when the final counter-tariff list came out.
Unfortunately, in-line galvanized tube was still captured on the final counter-tariff list, but we received a follow-up phone call, shortly after, to let us know that there was a remission process that we could apply to.
We immediately followed the instructions of the remission process and kept in close touch with a number of members in the finance department, all of whom were extremely responsive and understanding of our situation. They consistently challenged our case, to ensure the facts we were presenting were correct, and they gave us the opportunity to challenge some of the facts that they were presenting. We were put through a very thorough process.
Ultimately, we reached a remission for our product this past month.
Prior to receiving the remission order, I repeatedly commented to our customers, employees and friends how impressed I was with how the government was treating us and our issue. As I mentioned at the outset, we have no political affiliation. We simply followed the path that is set out for a citizen, and the path worked extraordinarily well and was fair and transparent.
I must commend the government on how well they functioned throughout the entire remission process. As a citizen and a business person, I would say this process far exceeded our expectations. We are extremely grateful for receiving the remission, and on behalf of our customers and the 200-plus employees that together we represent, we simply want to thank the government for the fair and thorough process we experienced.