Trade ministers in Canada and the United States have inked a deal that will extend their softwood lumber agreement by two years.
The agreement, which provides both countries with a guideline on the export and sale of wood, was set to expire on October 12, 2013.
With the extension, the agreement is now in place until 2015.
Ministers from both countries announced the deal at a ceremony in Washington, D.C. on Monday.
"This extension agreement will bring much-needed stability and predictability to the lumber industry," Ed Fast, Canada's international trade minister, said in a statement.
U.S. trade representative Ron Kirk was also on hand to sign the extension, which doesn't include any modifications to the current agreement.
The formal announcement comes about a month after both countries decided that an extension would allow more time to renegotiate the deal.
Fast lauds the current agreement as a deal that creates new opportunities and strengthens the Canadian economy. However, the deal hasn't been a cure all for lumber-related disagreements between the two countries.
U.S. forestry companies have accused B.C. lumber producers of subsidizing wood damaged by mountain pine beetles. Meanwhile, the head of the B.C. Lumber Trade Council has accused the U.S. lumber industry of using the allegations to try increasing costs for Canadian producers.
A panel is expected to hear the case in February.
For the most part, the current deal is satisfactory to Canada's lumber interests, said CTV News' Ottawa bureau chief Robert Fife.
"The industry is still facing some difficulties and that's why they'll be very relieved to have this agreement extended," he said.
When the U.S. housing market crashed in 2008, the effects rippled through the country's homebuilding sector, which makes generous use of Canadian lumber.
As a result, some Canadian lumber producers have been forced to close down sawmills, resulting in a loss of jobs in small communities that are reliant on the forestry sector.
Just last Friday, the economic fate of a B.C. community was thrust into uncertainty when a fire ripped through a sawmill near Burns Lake. The cause of the fire is still unknown.
Fife notes that the extension is also a convenient way for both countries to avoid having to drag out discussions during a U.S. election year, which could potentially burden the conversation.
Americans are currently in the thick of a Republican presidential candidate race. Prior to the extension, the softwood lumber agreement was set to expire the same year the nation re-elected or chose a new president.
Fife said the extended deal may also be President Barack Obama's way of saying that the recent rejection of the Keystone XL pipeline wasn't a slight against Canada, but rather, domestic politics at work.
For his part, Fast stressed the importance of a healthy forestry sector, saying one in five Canada jobs are generated by trade.
"That's why we'll continue standing up for our exporters in markets around the world, including the United States," he said in the statement.
Softwood lumber remains one of Canada's largest exports to the U.S. More than one-third of the softwood used in the U.S. is supplied by Canada, according to Canada's department of foreign affairs and international trade.
Exports of the wood to the U.S. totalled $2.6 billion in the first 11 months of 2011, about 58 per cent of those exports came from British Columbia.
The Softwood Lumber Agreement was signed in 2006.
