Published: Fri, November 03, 2017
Global Media | By Garry Long

Canadian lumber producers hammered after negotiations failed to reach deal

Canadian lumber producers hammered after negotiations failed to reach deal

The U.S. Department of Commerce said in its final determination released Thursday that most Canadian producers will pay a combined countervailing and anti-dumping rate of 20.83 per cent, down from 26.75 per cent in the preliminary determinations issued earlier this year. "It is nothing more than a thinly-disguised tax on American home buyers, home builders and consumers". "Unfortunately, the administration is taking protectionist measures to support domestic lumber producers at the expense of millions of US home buyers and lumber consumers".

The U.S. insists Canada is unfairly subsidizing softwood lumber producers because in Canada, tracts of timber are owned by the provincial governments, while in the United States, softwood lumber lots are privately owned.

"This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices".

Susan Yurkovich, President of the British Columbia Lumber Trade Council, said the duties are driven by a protectionist USA lumber industry whose sole objective is to constrain the imports of Canadian lumber and drive up prices for their own benefit. "We are reviewing our options, including legal action through the North American Free Trade Agreement and the World Trade Organization, and we will not delay in taking action".

Commerce Secretary Wilbur Ross said the revised duties were issued after the United States and Canada were unable to reach a long-term settlement to the dispute.

A 2006 softwood-lumber agreement expired in 2015.

Last week, West Fraser Timber Co.

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"We are pleased the United States government has recognized the legitimacy of our long-standing exclusion", said Nova Scotia Premier Stephen McNeil.

"We urge the USA administration to rescind these duties, which harm workers and communities in Canada", Canadian Foreign Minister Chrystia Freeland said in a joint statement with Canadian Natural Resources Minister Jim Carr. They had previously said the Commerce Department's findings were without merit, and that Canada planned to contest them. But Mr. Ross swiftly dropped the idea after speaking with USA industry. The two sides were close to an agreement over the summer.

The talks, however, deadlocked over whether Canada would be able to exceed its cap in the event USA companies could not produce enough to meet the rest of the demand.

US and Canadian officials have been working for months with industry representatives to come to an agreement to avoid the tariffs announced Thursday. But the USA would not budge.

Softwood lumber products, like pine, fir and spruce, are mainly used in the construction of single family houses. The real problem, he insisted, was that Canadian sector could not agree on a common position, with some companies favouring a market-share deal and others preferring an export tax.

Melanson said he'll meet with members of the forest industry on Friday to decide how to proceed, but said joining any litigation by the federal government is a strong possibility.

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