The accumulated U.S. duties paid by Canadian softwood producers since 2017 are now valued at more than US$7.2-billion.James MacDonald/The Globe and Mail
Canada’s lumber industry is warning of a crisis as the B.C. government and Ottawa prepare for a softwood summit to discuss the long-standing trade dispute with the United States.
The BC Lumber Trade Council, the Forest Products Association of Canada, the Canadian Lumber Trade Alliance and the Independent Wood Processors Association of British Columbia are among the groups sounding the alarm about sawmills operating at below break-even levels.
The 2006 Canada-U.S. softwood agreement expired in October, 2015. In the latest round of the trade dispute, Canadian producers have been paying U.S. lumber duties since April, 2017.
“It has been 10 years since the last softwood lumber agreement expired and we’ve been talking about how important it is to get some kind of certainty,” said Andy Rielly, chair of the group of wood processors and president of Rielly Lumber Inc.
“But everyone is just trying to survive until the next quarter.”
Canadian softwood producers hit with new 10% tariff on lumber shipments into U.S.
The accumulated U.S. duties paid by Canadian softwood producers since 2017 are now valued at more than US$7.2-billion.
Dominic LeBlanc, the federal minister responsible for Canada-U.S. trade, said in a post on X on Tuesday night that he will be in Vancouver next week for a softwood meeting being organized by the B.C. and federal governments.
On the federal side, Mr. LeBlanc will be accompanied by Energy and Natural Resources Minister Tim Hodgson and Housing and Infrastructure Minister Gregor Robertson.
“It will be an important opportunity to discuss recent and ongoing efforts to resolve the longstanding softwood lumber dispute with the United States, and measures by our two governments to assist workers in the sector and the hundreds of communities that depend on it,” Mr. LeBlanc said.
B.C. Premier David Eby and B.C. Forests Minister Ravi Parmar are urging Ottawa to move faster on the softwood file.
They want the federal government to be more aggressive in trying to resolve the cross-border fight over lumber, which dates back to the early 1980s.
“Mills are being squeezed, workers’ paycheques are at risk and forestry-dependent communities are feeling the strain,” Mr. Parmar said in a letter this month to Mr. Hodgson.
American import taxes on softwood from Canada now total 45.16 per cent for most Canadian producers.
The U.S. Department of Commerce raised duty rates in the summer. Lumber supplies from Canada currently face an anti-dumping duty rate of 14.63 per cent and a countervailing duty rate of 20.53 per cent, equalling 35.16 per cent for most Canadian producers. That’s up sharply from duties totalling 14.4 per cent previously.
New 10-per-cent tariffs on shipments of softwood lumber from Canada and other countries took effect on Oct. 14. U.S. President Donald Trump announced the new levies in late September, citing Section 232 of the Trade Expansion Act, which allows him to impose tariffs on the basis of national-security concerns.
“This situation is the direct result of the protectionist economic policies advanced by President Donald Trump,” Mr. Parmar said.
In August, Prime Minister Mark Carney announced plans for supporting Canada’s softwood sector. Ottawa’s $1.2-billion financial package includes $700-million in loan guarantees to help Canadian lumber producers with operations and $500-million in grants and contributions in a bid to diversify markets and reduce dependence on the U.S.
Last week, the Business Development Bank of Canada began rolling out the loan package, inviting Canadian lumber companies to apply for assistance.
A new digital advertising campaign planned by the B.C. government for the U.S. will highlight how Canada faces much higher import taxes on softwood compared with Russia, as well as focusing on costs for American home construction and renovation projects.
The B.C. government is vowing to press ahead after Ontario’s anti-tariff ad campaign on American television triggered a backlash from Mr. Trump.
While Russia has shipped only a small amount of lumber into the U.S. over the past couple of years, the goal of the ads is to emphasize how Canada is being treated unfairly on lumber tariffs and duties.
“We’re going into some pretty dark times,” said forestry consultant David Elstone, managing director of Spar Tree Group Inc. “I’m not optimistic that there will be a resolution to the softwood lumber dispute any time soon.”
Derek Nighbor, president of the Forest Products Association of Canada, said sawmills are already dealing with shift reductions and prolonged shutdowns.
Softwood production from U.S. sawmills now accounts for about 70 per cent of American domestic consumption.
Canada recently accounted for 24 per cent of U.S. lumber consumption, while other countries have a market share of about 6 per cent. The BC Lumber Trade Council said European shipments, which face much lower U.S. import levies, have been displacing Canadian lumber.