The FTA will provide the U.S. construction industry with greater access to a dynamic and growing budding market. Canada has a population of about 10 percent of that in the US., but a construction industry that is 17 percent of ours. This greater per capita expenditure on construction probably stems from two factors. First, Canada's population is distributed over a greater area and has a lower density, requiring a greater commitment of funds to the construction of highways and other services to link its population. Second, the northern climate of Canada typically requires more substantial, weather-resistant buildings.
This is an encore of an article Michael Chusid wrote two decades ago. In retrospect, the tone of the article sounds like it was written by a Chamber of Commerce. While the two countries do have extensive trade with each other, and ideas and finances move across the border with ease, digging in the dirt remains closely linked with a particular region, and cultural and trade patterns remain obstinate. Updates are shown below in blue.
The construction industry is becoming part of an international marketplace. To stimulate the flow of building materials, ideas, and capital across borders, barriers to free trade are being dismantled around the world. In Western Europe, all tariffs and barriers to Common Market trade will be eliminated by 1992. Closer to home. the recently ratified Free Trade Agreement (FTA) will eliminate, over the next decade, virtually all tariffs between the US and Canada and will liberalize regulation of cross-border investments. This will affect the availability, distribution, and competitiveness of building materials and services on both sides of the 49th Parallel. [The Canada - US Free Trade Agreement has been broadened into the tri-lateral North American Free Trade Agreement.]
Because most of Canada's population lives within 200 miles of the US. border, Canadian cities are often closer to major U.S. cities than they are to other Canadian population centers. Toronto, for example, is closer to both Detroit and Cleveland than it is to Montreal. This should make the distribution of building products move more in a north-south than in the east-west direction of current Canadian commerce. Also, many of the building-product manufacturers who currently maintain separate companies on both sides of the border may now find it economical to consolidate their operations. In the building industry, such multinational operations could make it increasingly difficult to specify products on those publicly financed jobs with a "Buy American" clause.
|Boral is one company that divides it trade regions by longitude, not latitude.|
Differences in industry standards between the two countries may remain a disguised barrier to trade. For example, U.S. and Canadian building authorities have different requirements for fire resistance, which frequently requires expensive duplication of testing and classification by both Underwriters Laboratories (UL) and Underwriters Laboratories of Canada (ULC). The Treaty commits both countries to work towards resolving such conflicting standards and actually establishes procedures to unify lumber standards. [Canada is fully metric, the US remains primarily on the inch-pound system.]
The FTA also seeks to encourage the movement of design and construction services across the border. It calls upon the American Institute of Architects and the Royal Architectural Institute of Canada to develop mutually acceptable standards for the licensing of architects. Upon review of the recommendations of the professional societies, the parties to the Treaty are required to encourage their respective states and provinces to extend reciprocal recognition to each others qualified architects. Other provisions of the FTA encourage the bilateral practice of engineering, building, developing, general contracting, and special trade contracting. [While all Canadian provinces accept US architectural licenses, most US states still do not grant reciprocity to Canadian architects.]
Canada and the U.S. are already each others' best trading partners. But now, with the FTA, companies can plan integrated North American marketing strategies with less fear of trade skirmishes. Canadian brands like Domtar and MacMillian Bloedel have already found an active niche in U.S. markets. and progressive U.S. companies continue to strengthen, their position in Canada. [MacMillan Bloedel was acquired by US-based Weyerhauser in 1999, and Domtar has most of its operations in the US.]
While some companies will undoubtedly face painful new competition due to the FTA, the U.S. building industry will benefit from the agreement. Abroad, we will have greater access to Canadian markets for goods and services. And at home we will enjoy an expanded choice of materials and reduced prices on imported products as we see "Made in Canada" on more building materials.
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By Michael Chusid
Originally published in Progressive Architecture, Copyright ©1989