Canada’s forestry sector says it is facing mounting pressure as the U.S. moves forward with substantial new duties on softwood lumber. Canadian producers warn the move could cost thousands of jobs and force the closure of smaller family-run operations.
The U.S. commerce department announced Friday it is nearly tripling anti-dumping duties on Canadian softwood to 20.56 per cent, up from 7.66 per cent. An increase in countervailing duties to be announced next week is expected to bring the combined rate against Canadian softwood shipped to the U.S. to 34 per cent.
The U.S. imposes anti-dumping duties because it claims Canadian producers sell softwood at prices that are below market value. Countervailing duties are slapped on Canadian softwood because the U.S. government considers the Canadian product to be government subsidized.
Parm Binning, vice-president of business development for the Mirax Group, which runs a lumber yard in Abbotsford B.C., says the hike in duties could lead to layoffs. “We’re taking it day by day right now. We’re just seeing how our customers are reacting to these unfair duties. And it’s likely not going to be good.”
Binning estimates there are more than 250 family-run manufacturing companies like his in the province who are now being forced to re-assess their future. “35 per cent on lumber going across the line is just ridiculous. It’s going to kill thousands of jobs,” he told CTV News.
The wood being sorted and shipped for distribution in Abbotsford is destined for countries all over the world, including China, India, and Australia. But most of it, Binning puts the number at 65 per cent, will be shipped to their biggest customer, the United States.
The U.S. lumber industry is applauding the move to penalize Canadian producers, arguing they engage in predatory pricing and ‘dump’ their product into the U.S. market to the detriment of U.S. producers. Independent operators on this side of the border accuse the Americans of pure greed.
“It just seems like a smack in the face,” said Brian Menzies, executive director of the Independent Wood Processors of British Columbia. “It’s not just that we may have to slow down for a while and lay some people off. It’s like, this might be the end of my business.”
Days ahead of U.S. President Donald Trump’s Aug. 1 trade deadline, B.C. Premier David Eby said Wednesday it is vital any agreement should include a deal on softwood lumber.
“There appears to be a moment that we could resolve the softwood issue, if the President is looking for a shared win here, which I certainly hope he is.”
Prime Minister Mark Carney has indicated solving the softwood conflict is a top priority in trade talks with the U.S., which Menzies says is offering the industry hope. “This has been going on for decades and decades now. Let’s find a way to resolve this.”
