The battle in the long-running softwood lumber dispute between Canada and the U.S. is heating up. The U.S. government today retaliated against Canadian softwood products by raising tariffs. The U.S. government has, effective immediately, raised those duties for the majority of Canadian companies to 14.63 percent. It’s a sizeable jump from an earlier 6.74 percent rate, spurred by allegations of predatory subsidies on Canadian lumber. This jump follows a recent major increase in anti-dumping duties that are now at an average of 20.56 percent. As a result, Canadian softwood exports are now subject to a total duty burden of 35.19 percent.
The protracted dispute poses an economic threat to the $5.7 billion forestry sector in British Columbia (B.C.). Even still, stakeholders are sounding alarm bells about the unsafe and irresponsible impact of this extreme step. This new reality could severely threaten the Canadian forestry industry. Its latest planned move could have serious consequences for housing markets across the U.S.
Reactions from Industry Leaders
Increasing the duty was “absurd and reckless,” said B.C.’s Minister of Forests, Ravi Parmar. He pointed out how this latest move will increase the affordability crisis that both Canadians and Americans are experiencing.
“Like with the anti-dumping duties, I have instructed our province’s legal representation to work with our federal partners to appeal this determination. We will use every legal avenue available to fight back,” – Ravi Parmar
Kurt Niquidet, president of the BC Lumber Trade Council, added his voice to the chorus. He cautioned that this policy move would weigh down communities across Canada, which are reliant on forestry. It will hasten the increase of construction costs for American builders.
Government Support Measures
In response to these escalating duties, the Canadian government, led by Prime Minister Mark Carney, has pledged significant financial support for the affected industry. The Department of Defense is making $700 million in loan guarantees available specifically to help companies that are being hurt by these new increased tariffs. We are particularly encouraged by their promise of $500 million to fund long-term efforts. These programs will assist in diversifying export markets and product development.
This has to end, this dispute between the US and Canada. They argue that fixing this problem is the most important economic imperative facing both countries.
“In the absence of a negotiated settlement, BCLTC will continue working closely with the Government of Canada and industry partners to defend Canadian interests through all available legal channels, including proceedings under the United States-Mexico-Canada Agreement,” – The BC Lumber Trade Council
Future Implications
This continued war puts the long-term health of Canada’s forestry sector at risk. It threatens U.S. construction markets. If the duties increase costs, American builders will feel the pinch and be worse equipped to meet demand for affordable housing.
Kim Haakstad, fellow member of the BC Lumber Trade Council, stressed the need for a strategic approach. He thinks that is key to drawing investment back into B.C.’s forestry sector.
“With the right policy tools, B.C. can send a strong message that it is committed to creating a climate where primary and secondary forest manufacturers want to invest, ensuring a steady supply of wood products for B.C., Canada, and beyond,” – Kim Haakstad
