By Lorene Keitch, Editor
The U.S. Department of Commerce announced Monday it would assess a duty, called a countervailing duty, on softwood lumber from Canada, citing there are unfair subsidies that the Canadian and provincial government allegedly provide to lumber companies.
B.C. Premier Christy Clark was quick to respond, saying she will “continue to press our case and implement our Action Plan on softwood.”
The tariffs were assigned after the U.S. Department of Commerce investigated five companies, including Canfor, which has a mill in Radium. Preliminary countervailing duties ranging from roughly 3 to 24 per cent for the five companies, with Canfor’s set at 20.26 per cent. The others include Irving, Resolute, Tolko and West Fraser. Remaining companies will be assessed at 19.88 per cent.
Radium Mayor Clara Reinhardt says the announcement is not a surprise.
“It’s certainly been a concern here for Canfor and the government for months now,” Reinhardt said Tuesday morning. “It’s the first volley.”
She explained that the treaty with the United States expired months ago and the U.S. did not even have a person assigned to negotiate with Canadian lumber agencies.
Susan Yurkovich, president of the BC Lumber Trade Council, said as much in a teleconference Tuesday morning.
“We have had tremendous support from both the federal government and the provincial government on this file,” Yankovich said. “The challenge is we haven’t really had a willing dance partner on the other side.”
The BC Lumber Trade Council says the duties are completely without merit.
“The allegations made by the U.S. lumber lobby are the same arguments they made in prior rounds of litigation, all of which were rejected and overturned by independent NAFTA panels,” says Yurkovich.
She made clear that the current US market needs are not met by US producers, and that any tarrifs imposed on Canadian softwood will hurt US consumers the most.
“The fact is, without the Canadian lumber industry, American consumers will be hurt,” she says.
According to industry experts, Canadian mills, including Canfor, should not be hurt in the short term by the countervailing duty.
“The Canadian industry has worked very hard over the last number of years to diversify our markets, including moving a whole lot of our lumber into Asia, particularly China,” says Yurkovich.
However, more than 50 per cent of Canadian softwood still makes its way to the United States.
“In 2015, 59 per cent of British Columbia’s softwood lumber exports went to the U.S. – down from 82 per cent in 2001 thanks to increased exports to overseas markets including China and India,” Clark confirmed Tuesday.
While officials are optimistic about limited short-term effects from the U.S. action, there is still uncertainty in how long this latest skirmish will go on and what the overall impact will be.
“We don’t know what the actual impact in BC in total will be,” says Yurkkovich. “It depends on how long the dispute will go on.”
B.C. is the largest Canadian exporter of softwood lumber to the U.S., according to the BC Lumber Trade Council. The B.C. forest industry supports approximately 145,000 direct and indirect jobs in the province.
Another decision by the U.S. is expected to be made in June, when they propose to issue preliminary anti-dumping determination – another type of duty the U.S. argues will help offset “unfair” selling practices by Canadian lumber companies.
Canfor did not release a statement Tuesday regarding the tariffs, leaving the BC Lumber Trade Council to speak on behalf of all lumber producers.