Lumber deal extension hyped by industry, trashed by union

The two-year extension of the Canada-U.S. softwood lumber agreement is being lauded as “good news” by Ontario and Quebec forest industry groups.

Jamie Lim, Ontario Forest Industries Association president, was pleased that industry issues were reflected in the announcement made by federal Minister of Foreign Affairs and International Trade Ed Fast, Jan 23.

“This endorsement of the extension by the central Canada industries is based on current economic conditions which have, even without the competitive constraints of the (softwood lumber agreement), shuttered much production and reduced substantially Central Canada's export capacity.”

Council of the Quebec Forest Industry president Andre Tremblay said the renewal removes a cloud of uncertainty hanging over the sector.

“It does not solve the problem of market or economic conditions, but at least our companies exporting softwood lumber to the United States are now aware of the rules that will apply until October 2015.”

Both said the renewal of the agreement is generally positive in providing access to that market, especially with analysts predicting steady future growth in the U.S. home building sector.

Trashing the deal's renewal are the United Steelworkers of America (USW).

Ken Neumann, Canada director of the USW, said the deal's extension only “makes a challenging situation even worse.”

Besides the 15 per cent border tax on Canadian lumber exporters imposed in 2006, Neumann said the agreement's “surge mechanism” discourages investment in operations by penalizing lumber producers in a region that exceeds its U.S.-bound lumber quota.

“Extending the softwood lumber agreement, while failing to even attempt to address many of the problems it has worsened, or even consulting with forestry workers who have been impacted by job loss in the sector, adds insult to injury to an industry that has been hard hit in recent years.”