Canada threatens to block project over US steel requirements

AP News
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Posted: Jan 19, 2015 5:38 PM

JUNEAU, Alaska (AP) — The Canadian government has signed an order that would block the state of Alaska from updating a ferry terminal unless the two sides resolve an ongoing dispute over the use of U.S. steel in the project.

The project is on Canadian soil that is leased by the state in British Columbia. The port at Prince Rupert is part of the Alaska Marine Highway System.

The vast majority of construction funding for the project is expected to come from the Federal Highway Administration, which has "Buy America" requirements for steel, iron and manufactured products used in projects it funds. The remainder would come from the state.

Canadian officials have said Canadian metal suppliers should not be excluded from work on Canadian soil, and they've suggested the state seek a waiver of the "Buy America" provision, but Gov. Bill Walker has not seen a need for one. Another option would be for the state to fund the project itself, but the state faces multibillion-dollar budget deficits because of the plunge in oil prices.

In a statement Monday, Canada's minister of international trade, Ed Fast, called the application of "Buy America" provisions on Canadian soil an "affront to Canadian sovereignty."

"We remain committed to working with our U.S. partners to resolve this unacceptable situation and call on them to seek a waiver of the Buy America restrictions," he said. "However, we are prepared to exercise this order to defend Canadian interests."

Walker said he has been in communication with the Canadian ambassador to the U.S., Gary Doer.

"I think we'll get through this," Walker said. "It's a little bit of a bump in the road, as far as that project, but 'Buy America' is there for a reason, when it's our funds."

The previously delayed bid opening for the project was pushed back again last week, from this coming Wednesday to Friday. Walker said he wasn't sure if it would get pushed back again.