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Brace for impact of U.S. softwood lumber duties

Feds, provinces form task force to measure the fallout
EACOM photo

When things look bleak, form a task force.

With a trade dispute looming with the United States over Canadian cross-border exports of softwood lumber, federal Natural Resources Minister Jim Carr announced the creation of a federal-provincial softwood lumber task force on Feb. 22.

Its purpose is to analyze potential impacts to forestry workers and communities, find new global export markets, and do what it takes through innovation and programming to keep the forest sector breathing.

Carr will chair the committee.

The 2006 Softwood Lumber Agreement expired on October 12, 2015. Negotiations over the past two years haven’t produced a new deal but Natural Resources Canada said Ottawa will “vigorously defend the interests of the middle-class Canadians who depend on the industry.”

Last November, the U.S. Softwood Lumber Coalition lodged a complaint with the U.S. Department of Commerce in order to levy countervailing and anti-dumping duties on Canadian lumber exports on the US market.

Those duties could start impacting Canadian exports by late April once the Commerce Department makes a preliminary determination.

Canada’s forest industry employs more than 200,000 people. Softwood lumber exports were valued at $8.6 billion in 2015, with close to 70 percent going to the U.S.

With that news barely out, the Ontario and Quebec governments reiterated the call for a federal loan guarantee program to bolster the industry, still recovering from the 2006 dispute.

Amid much uncertainty, Québec and Ontario Forestry Ministers Luc Blanchette and Kathryn McGarry issued a joint release saying it’s up to Ottawa to “mitigate job losses and negative impacts on the communities that depend on forestry.‎”

“This $15.5 billion dollar sector plays a significant role in communities across our province and in the adaptive management of Ontario's boreal forest in support of our climate change initiatives,” said McGarry. “A loan guarantee program would help the industry bridge a significant gap during a period of economic uncertainty. Ontario and Quebec believe that this is a national issue that needs a national solution.”

Blanchette said the future of 100,000 forestry workers in both provinces must be protected.

“The levying by the U.S. government of duties and the duration of potential litigation considerably affect the financial health of our businesses, which might be compelled to accept an agreement whose conditions are unfavourable to them. All of the partners of our two governments (the municipal sector, the unions and industrialists) agree that the federal government must offer assurances and give our companies the financial tools necessary to enable to better withstand this economic uncertainty.”