Softwood lumber tariffs a concern for region

By Chris Marchand

Canadian softwood lumber producers are once again on the defensive after the United States imposed a new spate of tariffs averaging 20 per cent on Canadian lumber exports last week, the latest blow in a trade dispute that’s lasted 35 years.

Resolute Forest Products’ Seth Kursman, Vice President, Corporate Communications, Sustainability and Government Affairs says it’s too soon to tell how the tariffs might affect their operations in Northwestern Ontario. Resolute FP operates sawmills in Atikokan, Ignace and Thunder Bay.

“It’s a bit premature,” said Kursman. “That’s doesn’t mean people shouldn’t be rightfully concerned about this. There are a lot of chapters yet to unfold in this between now and January 2018. What I can say with confidence, from the Resolute perspective, is that Quebec and Ontario should have nothing less than free, unencumbered access to the U.S. marketplace.”

Kursman says that over the past 35 years, Canada has defended its position successfully in every international tribunal on the softwood lumber matter. Beyond that, provinces have made significant efforts to accommodate and address the U.S. claims that Canada unfairly subsidizes its forest industry in previous softwood lumber agreements.

In 2005 a bi-national panel under NAFTA ruled that any perceived subsidy in the Ontario forest industry amounted to less than 1 per cent. Recent tenure reform in Quebec has resulted in systemic changes towards a market-based system more closely resembling that of the U.S..

Kursman says those efforts are being ignored.

“This is a politically-charged issue,” said Kursman. “If this were about jobs, as Donald Trump says, we wouldn’t be having this discussion. This is about a handful of wealthy timber barons working to increase the value of their land holdings at the expense of Canadian workers, American consumers and the 3.8 million people who work in the U.S. housing sector. Those 110,000 sawmill jobs in the U.S. aren’t threatened. The United States can’t meet its own demand.”

The U.S. Commerce department has estimated average tariffs of around 20 per cent on Canadian softwood lumber products would add 1.4 per cent to the cost of building a home in the U.S.

With the U.S. housing market accounting for nearly one-fifth of the country’s gross domestic product, Kursman says the Trump administration’s promises to boost the national economy run at odds with adding new barriers to home ownership.

“Do you really want to mess with such a critical engine of the U.S. economy?” said Kursman. “When you have artificial trade restrictions, especially when they’re not legit and they’re based on politics, you add a great deal of volatility to the marketplace. You have price spikes and you have people who aren’t going to be able to achieve that American dream.”

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