OTTAWA—Prime Minister Justin Trudeau says Canada will persist with its efforts to negotiate a new softwood lumber deal with the United States despite a second round of import tariffs slapped on Canadian wood by the United States this week.
Late June 26, the U.S. Department of Commerce ruled Canadian softwood producers were dumping lumber into the United States at prices lower than market value in Canada and added another 6.87 percent in import duties to most Canadian softwood.
The decision, which is a preliminary figure awaiting final determination later this year, brings the average import duty to 26.75 percent when added to the countervailing duties the United States imposed at the end of April. Washington maintains that Canadian wood is unfairly subsidized.
Canada intends to challenge the duties in court or through international trade tribunals but can’t until the final determinations are made.
The current duties would cost Canadian producers an estimated $1.7 billion a year.
Trudeau says Canada has repeatedly emerged triumphant each time the U.S.-Canada softwood dispute lands in the courts, and expects the same outcome again.
He said the introduction of both countervailing and anti-dumping duties is similar to what has happened in past softwood disputes. This is the fifth time the United States has imposed duties on softwood since 1981, and each time the two countries have eventually come to a negotiated settlement.
“But this is still an issue that affects thousands of jobs across the country in small communities,” the prime minister said. “It’s something we take very, very seriously and will endeavour … to continue to work very, very hard on with the American administration.”
Unifor president Jerry Dias calls the latest round of tariffs a “slap in the face” to fair trade that pushes the lumber industry closer to the edge of crisis.
The union, which represents some 24,000 workers in the sector, estimates that sustained combined duties of 25 percent could eventually result in 25,000 lost jobs north of the border.
Conservative MP Randy Hoback, the official Opposition critic for Canada-U.S. relations, said Trudeau had a deal in hand with the former Obama administration and he let it slip away.
Hoback is in Montana for a meeting with western governors, where he said opinions of softwood vary depending on the state. But he said the general consensus there is that a deal would have been possible had Canada more quickly embraced the Trans Pacific Partnership, a trade deal President Barack Obama wanted but which the United States has walked away from under President Donald Trump.
“They were looking for us to show leadership on TPP,” Hoback said.
“If we would have done that instead of doing another year of consultations across Canada, it would have given Obama the cover to push it through, and then would have also given us the ability to negotiate a softwood lumber agreement.”
Hoback said he thinks the ultimate result will be more consolidation of the industry in Canada, with the biggest companies snapping up small outfits to get access to their wood quotas without necessarily keeping their sawmills open.
“We’re going to see small towns turn into ghost towns,” said Hoback.
NDP MP Nathan Cullen says eliminating as many Canadian companies as possible is the main goal of the U.S. action, and says there are already mills in his northern B.C. riding that can’t afford the duty bills handed them by the United States.
But Susan Yurkovich, CEO of the B.C. Lumber Trade Council, said layoffs and job cuts will be avoided for the most part until the U.S. government sets final duty rates later this year—unless lumber prices suffer a precipitous decline.
After the first round of U.S. tariffs was initiated in April, Natural Resources Minister Jim Carr in June announced $867 million in financial support to help lumber producers and employees weather the impact of the new duties.
From The Canadian Press, with files from Ross Marowits in Montreal