market share because our timber supply is declining. economy needs Canadian softwood, and Canada is less of an economic threat to U.S. housing starts and declining Canadian timber supply is a major reason the softwood lumber agreement expired (SLA) with little fanfare in 2015. I’m briefly going to go through how each of these changed, and how these changes contribute to the situation we are in today. Canada’s customer base for softwood lumber.Integration in the North American lumber market.But these went largely unnoticed – particularly by the U.S. softwood duties in the early 2000s, and the minimal effect similar duties are having today?ĭuring the near decade the softwood lumber agreement was in place, many of the major factors that affect the softwood trading relationship between Canada and the U.S. The big question is: why is there a such discrepancy between the impact of U.S. In June 2017, Ottawa allocated $605 million for loans and loan guarantees to help offset the cost of the duties only about 5 per cent of that has been requested. duties is that the federal government’s aid package for the sector has barely had any uptake from industry. and 400 million in tax revenue.Ī sure sign that the Canadian softwood sector is not yet feeling the pinch of the U.S.
#Biggest lumber exporter full
The duties are also expected to result in the loss of more than 9,000 full time jobs in the U.S. That might not seem like a lot, but they have also figured out that for every $1,000 home prices increase, more than 150,000 families are priced out of being able to buy a home. – the National Association of Home Builders estimates that the price of single family homes will increase by more than $1,300 this year. demand for our lumber is strong, as housing starts south of the border continue to rise.Īnd we’re already seeing the effect of that in the U.S. our dollar has remained lower than the U.S.consumers.Ĭanadian softwood exporters have been able to pass the cost of the duties on to the Americans because: The duties paid last year were passed entirely on to U.S. So, if duties are in place for as long as they were in the early 2000s – about 5 years – it could cost softwood exporters close to the same amount – around $5 billion.
The Conference Board of Canada estimates that duties in 2018 will cost $1.8 billion. In 2017, Canadian softwood exporters paid an estimated $500 million in U.S. And that is what they banked on happening again this time around.īut, thankfully, we are not seeing the same consequences today. That economic pain is exactly what the U.S. The federal government spent more than $330 million trying to help the workers and communities that were hardest hit. By 2004, almost six thousand sawmill layoffs were tied directly to the duties and sawmills were closing as a result. In the five years the duties were in place (2001-2006), Canadian exporters paid $5.3 billion to the U.S. The combined anti-dumping and countervailing duties averaged 27 per cent. The first ever softwood lumber agreement had just expired, and negotiations on a new deal were dragging out. imposed duties on Canadian softwood lumber was in the early 2000s. The duties are permanent, and under World Trade Organization rules, can remain in place for five years before the U.S. Irving to 23.57 per cent for West Fraser. Their duties range from less than ten per cent for J.D. Five companies have their own specific duty rates: Canfor, Resolute, Tolko, West Fraser and J.D. duties currently average about 20 per cent for most companies. I do not expect to see any movement on a new deal until the NAFTA talks wrap up. on NAFTA, softwood negotiations have basically been put on hold. Because of the focus of both Canada and the U.S. Then in August, the NAFTA re-negotiation started. Commerce Department to start the process of imposing duties, and they wanted to see that play out. preliminary duties on our softwood had been in place for a few months, but it would still be a few more months before a final determination was made and duties could be made permeant. The governments presented the deal to industry on both sides of the border, and it was promptly shot down by the U.S. market share and gradually reducing that down to about 27 per cent.
It involved declining quotas – capping Canadian lumber exports to 30 per cent of U.S. had a framework on a new softwood lumber agreement. You may have heard that last summer, the governments of Canada and the U.S. On March 15, 2018, Naomi Christensen, senior policy analyst, gave the following presentation to the Western Wood Truss Association of Alberta.
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