Canada’s forest industry felt the slap of the countervailing duties they were bracing for late Monday, with confirmation out of Washington that a U.S. Commerce Department investigation has once again concluded that softwood lumber imports are unfairly subsidized.
Canadian lumber imports are expected to face new duties ranging from three to 24 per cent, starting next week.
Countervailing duties are used to level the playing field when a country believes that another country’s product is unfairly subsidized.
The U.S. lumber industry has argued for decades that because most Canadian timber is harvested on Crown lands, the way provincial governments manage and set prices for these harvests results in cheaper lumber.
“Today’s ruling confirms that Canadian lumber mills are subsidized by their government and benefit from timber pricing policies and other subsidies which harm U.S. manufacturers and workers” said Cameron Krauss, the legal chair of the U.S. Lumber Coalition and a senior vice-president of Oregon’s Seneca Sawmill, in a release.
“Left unchecked, Canadian non-market based trade practices would yield ever increasing market share for Canadian product, displacing U.S. producers, workers, and landowners, and even allowing Canadian mills to take over U.S. assets,” the U.S. Lumber Coalition said in its release late Monday.
“Border measures against subsidized and dumped Canadian lumber imports are essential — otherwise differences between the U.S. mostly private and Canadian mostly public timber sales systems give Canadian producers an unfair cost advantage that injures U.S. producers and their workers,” it said.
But Canadian governments have changed the way they operate to address such concerns. Timber auctions are now used to better reflect current market rates.
“The government of Canada disagrees strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty,” reads a joint statement issued by Natural Resources Minister Jim Carr and Foreign Affairs Minister Chrystia Freeland. “The accusations are baseless and unfounded.”
Anti-dumping duties still to come
This week’s decision is the first of two investigations that began following a petition launched last fall by the Committee Overseeing Action for Lumber International Trade or Negotiations (COALITION), which includes the Washington-based U.S. Lumber Coalition lobby group, a carpenters union and about a dozen American timber producers and sawmills.
It claims to represent the concerns of about 70 per cent of the U.S. industry.
The investigation looked at the top four Canadian companies that export to the U.S.: West Fraser; Tolko, Canfor and Resolute Forest Products.
Duties will be applied to these major importers as follows, based on the department’s determination of…