Sen. Brown Calls on Canada to End Unfair Subsidies That Would Hurt Paulding County Jobs

Paulding Company Could be Hurt by Canada’s Attempt to Unfairly Subsidize its Cement Industry and Target U.S. Market

WASHINGTON, D.C. – Following his letter to the Obama Administration, U.S. Sen. Sherrod Brown (D-OH) today called on the Canadian government to end illegal trade subsidies that threaten cement jobs in Paulding County. Brown has previously called on the Obama Administration to examine Canada’s trade practices and ensure they are complying with international trade law.

“These unfair subsidies threaten Ohio manufacturing and jobs in Paulding County,” Brown said. “It’s simply unacceptable that other countries cherry pick which trade rules they choose to follow. That’s why I’ll continue fighting for workers in Paulding County – and throughout the U.S. – to ensure American workers have a fair shot.”

The Canadian federal government and the Province of Quebec are seeking to offer a nearly half billion dollar financial package to McInnis Cement to help its startup in Port-Daniel-Gascons, Quebec. The size and nature of these subsidies could violate Canada’s World Trade Organization (WTO) obligations and give its cement industry an unfair advantage in the U.S. market. That is why Brown is calling for the Quebec government to rescind these subsidies and allow Paulding’s workers and businesses to compete on a level playing field.  

In July, Brown urged United States Trade Representative (USTR) Michael Froman to crack down on the subsidies package, which would specifically target the U.S. market, hurting the ability of local manufacturers to compete. U.S. cement companies would be affected, including Lafarge North America, which has a plant in Paulding. 

Brown continues to fight for Ohio manufacturers’ ability to compete on a level playing field. Described as “Congress’ leading proponent of American Manufacturing,” Brown is a member of the Senate Manufacturing Caucus, currently Vice-Chair of the Senate Auto Caucus, and was recently named incoming Chair of the Senate Steel Caucus. In April, bipartisan manufacturing jobs legislation introduced by Brown and U.S. Sen. Roy Blunt (R-MO) moved one step closer to becoming law. Brown-Blunt would establish a National Network of Manufacturing Innovation (NNMI) and create thousands of high-paying, high-tech manufacturing jobs while enhancing the United States’ role as the world’s leader in advanced manufacturing. 

Full text of Brown’s letter is below.

 

September 9, 2014

The Honorable Philippe Couillard

Québec Premier

Édifice Honoré-Mercier, 3e étage

835, boul. René-Lévesque Est

Québec (Québec) G1A 1B4

 

Dear Premier Couillard:

I write to express my concerns about a financial assistance package to be offered by Quebec and the federal government of Canada to McInnis Cement for the purpose of building and starting up a cement plant in Port-Daniel–Gascons, Quebec.  I believe these subsidies are not compliant with Canada’s international trade obligations and would have negative consequences for the U.S. and Canadian cement markets.  I ask you to reconsider this financial assistance package for the McInnis plant.

The Canadian federal government and Quebec have committed to provide nearly half a billion dollars in support to McInnis Cement to build a cement plant in the Gaspé region.  Investment Quebec will contribute $100 million in equity, and the Quebec Deposit and Investment Fund, which manages the province’s public pension plans, will contribute another $100 million.  Investment Quebec will also lend $250 million to the project, and the federal government will provide another $100 million in financing.  Media reports indicate that a special electricity rate available to industrial users may also be available to McInnis.  A tax holiday on provincial income tax for large investments in Quebec has also been reported as part of the financial assistance package.  The proposed facility is expected to cost $1.1 billion. 

In addition to the scope and magnitude of the subsidy package, I have concerns that Quebec will finance a plant focused solely on exporting to the U.S. market, despite underutilization in Canada’s cement industry.  Given the oversaturation of the Quebec market and the McInnis plant’s focus on the U.S., I believe these subsidies may also be export-contingent.  As a result, I have communicated these same concerns to the United States Trade Representative and asked for an investigation into the financial assistance package and WTO action if they are inconsistent with Canada’s trade commitments.

Ohio has two cement plants, and thousands of workers are employed in concrete and cement jobs across the state.  These companies and workers are among the world’s most efficient and globally competitive.  A massive subsidy package that violates international trade law, however, would jeopardize this industry and its economic benefits to my state.  I urge you to withdraw the subsidy package from the McInnis Cement plant and ensure that the Canadian and American cement sectors compete on a level playing field.

Sincerely,

 

Sherrod Brown

United States Senator

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