Quebec wants to reform its forestry regime to balance business needs with sustainable management of forest lands, but the proposed changes have come under fire from municipalities, nature groups and unions.Jacques Boissinot/The Canadian Press
Groupe Rémabec, Quebec’s largest private forestry company, is significantly scaling back operations, as it faces mounting pressure from U.S. duties and a provincial business environment it describes as more and more unstable.
The La Tuque, Que.-based company, which harvests logs and cuts it into lumber at eight processing plants in the province, said Thursday it is shutting down all forestry operations and sawmills at its Arbec manufacturing unit for an indefinite period. Roughly 1,000 workers will be laid off immediately, and that number could reach 1,400 in the coming weeks, Rémabec said.
“The foundations of the Quebec forest industry’s competitiveness have been seriously weakened in recent years,” the company said in a statement. “Persistent imbalances, both in terms of access to the resource and international markets, have increased pressure on processing companies.”
Rémabec is the latest Canadian exporter to curtail its operations after U.S. President Donald Trump unleashed a trade war aimed at fortifying American industry. New data released Thursday show that U.S. tariffs are hammering demand for Canadian goods, pushing Canada’s trade deficit to $7.1-billion in April as exports collapsed.
Carney and Trump holding direct talks on trade and security, U.S. envoy says
Automotive exports to the U.S. plunge as tariffs hit Canada’s carmakers
The U.S. Commerce Department began imposing duties in 2017 on shipments of Canadian lumber, the latest round in a long-running softwood trade fight that dates back to the early 1980s. Lumber that originates from sawmills in Canada is subject to an anti-dumping duty rate of 7.66 per cent and a countervailing duty rate of 6.74 per cent.
The U.S. levies anti-dumping duties because it claims Canadian producers sell softwood below market value, while it charges countervailing duties for what it sees as subsidized Canadian lumber. The combined levies are slated to surge to 34.45 per cent by September, up from the existing 14.4 per cent.
Mr. Trump has mused that he could boost import taxes on foreign lumber even higher, which the U.S. Lumber Coalition has been calling for. Any such industry-specific levies would be on top of other tariffs his administration has imposed.
The U.S. government has collected $10-billion in customs deposits from Canadian lumber producers since 2017, according to the Independent Wood Processors Association of British Columbia. The sum of Arbec’s own deposits is “astronomical” and “hurts its competitiveness against its Canadian and American rivals, given the higher price of roundwood in Quebec,” Rémabec said in its statement.
The company also views the province’s current operating environment as problematic. Access to wood needs to be improved, and costs need to be adjusted to bring them in line with Ontario and other jurisdictions, company spokesperson Emilie Vallée said in an e-mail exchange. Conflict between Indigenous groups and the provincial government is complicating that access, she said.
Quebec is bringing in new legislation to reform its forestry regime that aims to balance business needs with sustainable management of forest lands. But the proposed changes have come under fire from municipalities, nature groups and unions. Meanwhile, some Indigenous communities have called the reform “a major step backward” that threatens the social peace, and they’ve set up blockades of access roads in protest.
Rémabec said there’s a widespread “feeling of exasperation” among Quebec’s forestry businesses, and that the status quo is no longer possible. The sector’s business ecosystem is “increasingly unstable and lacks predictability and consistency,” the company said.
Quebec’s Natural Resources and Forestry Minister, Maité Blanchette Vézina, defended her legislation and said it would help companies deal with more challenging circumstances.
The softwood lumber dispute, together with the uncertainty caused notably by Mr. Trump’s policies, is “forcing us to review our way of doing things,” the minister said in an e-mailed statement. “Of course, barriers to forestry activities can create tensions and supply issues.”
Groupe Rémabec’s two main shareholders are Réjean Paré, who founded the company and leads it as president, and businessman Joey Saputo, a member of Montreal’s billionaire Saputo family.