American consumers could be paying more to build new homes after the U.S. announced it will more than double existing duties on Canadian softwood lumber.
“In the end, the U.S. consumer ends up paying additional money,” Supply-Build Canada president Liz Kovach told CTV’s Your Morning on Tuesday. “It is an extra cost that is being passed on to the U.S. consumer and that’s not an ideal situation when you are looking for housing affordability.”
Claiming that the Canadian lumber industry is unfairly subsidized, the U.S. Department of Commerce announced Friday that it planned to hike duties on Canadian softwood lumber from 14.4 per cent to 34.45 per cent.
The softwood lumber dispute between the U.S. and Canada has spanned decades. The root of the issue is that Canadian timber is largely harvested from provincially owned land at set fees, while U.S. trees typically come from privately owned lots. The new duties are separate from proposed tariffs.
“We don’t need their lumber because we have our own forests,” U.S. President Donald Trump previously told the World Economic Forum in Davos in January.
Supply-Build Canada is a member-based industry association that represents building supply manufacturers, distributors and retailers.
“We have seen mill closures over the years as a result of this on both sides of the border,” Kovach said of the decades-long dispute. “We’d like to get to that point where we have an agreement when we can just move forward and businesses can operate business as usual.”
The U.S. imports roughly 30 per cent of the softwood lumber it uses, with more than 80 per cent of imports coming from Canada. British Columbia is Canada’s largest softwood lumber producer and exporter. According to the March National Association of Home Builders/Wells Fargo Housing Market Index, tariffs on lumber and other important homebuilding materials could raise the average cost of a home in the U.S. by US$9,200.
“The reason why we supply so much material is they simply can’t produce it alone,” Kovach said. “As soon as you start taking producers out of the market … it’s going to spike the prices on the other side, and then we’re going to see COVID-style or COVID-type pricing again on the commodity lumber side.”
If Canada can’t come to an agreement on softwood lumber with the U.S., Kovach says the industry will need to start looking at different markets.
“What we should also be doing is also now protecting our interests,” Kovach added. “So when it comes to procurement, we should be mandating that any type of housing is being procured from Canadian producers.”
With files from The Canadian Press and CNN
