Most Canadian forests are on Crown land and buyers pay 'stumpage fees' to provincial governments for the right to log.James MacDonald/The Globe and Mail
A U.S. lumber industry group has expanded its list of complaints lodged with the Department of Commerce against Canadian softwood producers, alleging that a wide range of federal and provincial programs amount to unfair subsidies.
The U.S. group COALITION has presented nine “new subsidy allegations,” claiming that Canadian producers benefit from federal government programs, including one that offers refundable tax credits for clean technology such as solar power.
COALITION, or Committee Overseeing Action for Lumber International Trade Investigations Or Negotiations, has members such as Seattle-based Weyerhaeuser Co. And it has sway over Congress, with the backing of many influential U.S. senators and members of the House of Representatives.
The Commerce Department is investigating the nine new allegations put forward by the group.
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Canada has repeatedly rejected American arguments that Canadian producers benefit from subsidies and also denies dumping. In the past, Canada has said the U.S. coalition has not provided “evidence of a financial contribution, benefit and/or specificity to substantiate its claims.”
One of the group’s complaints targets a federal program in Canada, open to eligible forestry companies, that provides refundable tax credits for carbon capture, utilization and storage.
In addition, the group’s allegations name provincial programs in British Columbia, Alberta, Ontario and Quebec.
The new subsidy allegations, if substantiated by the Commerce Department, would escalate the softwood dispute that dates back to the early 1980s.
The accumulated U.S. duties paid by Canadian softwood producers since 2017 alone have reached roughly US$7.7-billion.
Most forests in Canada are on Crown land, where buyers pay “stumpage fees” to provincial governments for the right to log. For decades, the U.S. has alleged that those fees are too low, and that they amount to unfair provincial subsidies.
The B.C. budget tabled on Tuesday introduces a temporary Stumpage Payment Deferral Program in an effort to ease the cash crunch for companies. The voluntary program covers the first 11 months of 2026.
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The B.C. government forecast tree harvesting on provincial Crown land would cover 29 million cubic metres annually over the next three years. B.C. logging associations say the harvest needs to be increased to 45 million cubic metres a year.
The last time Canada and the U.S. reached an agreement on softwood trade was in 2006. That agreement expired in October, 2015, with no replacement, and the impasse continues.
The U.S. levies countervailing duties for what it sees as subsidized Canadian lumber and charges anti-dumping duties because it claims Canadian producers sell softwood below market value.
U.S. import taxes on softwood lumber currently total 45.16 per cent on most Canadian producers, including countervailing and anti-dumping duties of 35.16 per cent and tariffs of 10 per cent.
Lawyers, working on behalf of the U.S. coalition as the petitioner, wrote a letter last month to Commerce Secretary Howard Lutnick. “Petitioner has alleged the elements necessary for the imposition of countervailing duties and provided ample information that is reasonably available to support its allegations,” the lawyers said.
Among the federal initiatives facing criticism from the coalition are refundable tax credits for eligible clean hydrogen projects and a program administered by Natural Resources Canada.
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The U.S. petitioner is also concerned about what it views as unfair subsidies in provincial jurisdiction, related to alleged unauthorized timber harvesting in B.C., incentives for carbon capture in Alberta, emissions standards in Ontario and supports for wood processing in Quebec.
Meanwhile, Vancouver-based West Fraser Timber Co. Ltd., Canada’s largest lumber producer, has paid more than US$1-billion in duties since 2017.
Sales from U.S. sawmills, including those owned by Canadian-headquartered companies such as West Fraser and Vancouver-based Canfor Corp., are exempt from the lumber duties.
The Commerce Department deferred a potential probe, suggested by the coalition, into cases pertaining to alleged subsidies for long-term timber tenures in B.C. and Alberta, saying the issue warrants closer examination in the future.