Increase in softwood lumber tariffs unwarranted, unfair: N.B. government

The United States have slapped a nearly 21 per cent tariff on softwood lumber which could hit N.B. hard.

Members of the forest industry and the provincial government weighed in Monday on the Trump administration’s decision to raise tariffs on Canadian softwood lumber.

Last week, the U.S. Commerce Department decided to raise anti-dumping duties on Canadian softwood to 20.56 per cent.

A news release sent Monday by J.D. Irving, on behalf of the New Brunswick Lumber Producers co-chairs Jerome Pelletier and Glen Warmen, stated the province’s forest industry is “deeply troubled” by the decision to increase the duties by over 14 per cent.

“Increasing anti-dumping duties to 20.56 per cent from the current average rate of 7.66 per cent is unjustified,” read the statement. “New Brunswick’s softwood lumber producers already face punitive and unfair anti-dumping and countervailing duties.”

According to the statement, when combined with an anticipated rise in countervailing duties, the new increase to anti-dumping duties will mean an expected new total of 34 per cent by the middle of August.

The new tariff did not surprise New Brunswick Minister of Natural Resources John Herron.

“This administration has been very difficult to predict,” said Herron. “Just to be clear, from the government of New Brunswick perspective, these increase in tariffs and countervailing duties are unwarranted, unfair.”

Herron said the softwood lumber industry is a very important sector of the province’s economy with 28,000 New Brunswickers earning their living directly from the forests.

“That translates into $3 billion of exports, $2 billion in payroll, but perhaps most importantly is the jobs associated with the forestry sector that are dispersed throughout the province,” said Herron.

Anti-dumping duties are assessed when a product is being sold to importers in the United States at prices that are lower than comparable products coming from the country of export.

Duties can also be assessed when goods are sold into American markets at prices that are not profitable.

Rick Doucett, president of the New Brunswick Federation of Woodlot Owners, said the decision by the Americans creates a lot of anxiety.

“Right now, in our world on the producer’s side, the suppliers’ side of wood, the markets aren’t very good. The margins are pretty tight as far as the price of wood and people being able to make money, either the woodlot owner or the producer, anybody cutting wood,” said Doucett.

Doucett said the concern is anytime a fee gets imposed on the industry, the industry does tend to try to find a place to pass it on to.

“Obviously one of the places they have passed those fees on in the past is to the suppliers, which we are,” said Doucett. “If the idea is to pass those fees on in the form of lower prices, I’m not sure our members will survive that.”

Doucett said whenever anybody in the supply chain hears about duties or tariffs or any other fees, they get very anxious about those fees being imposed on them in the form of lower wood prices and possibly making their operation not viable anymore.

On Friday, the British Columbia Lumber Organization condemned the decision to raise anti-dumping duties on Canadian softwood calling them unjustified, punitive and protectionist.

The B.C. Council of Forest Industries issued a statement saying it will harm workers, families and communities across the country.

British Columbia Minister of Forests Ravi Parmar said the forestry sector is feeling the full weight of the decision.

“We know, here in Canada over the last few weeks and months that Donald Trump is doing everything in his power to destroy our economy,” said Parmar.

Herron has worked with Parmar over the past few weeks and doesn’t think the B.C. minister’s language is an overstatement.

Herron also believes Canada may actually be better positioned now to negotiate an accord with the United States on softwood lumber than it has been positioned to do in the past.

He has faith in Dominic LeBlanc, the federal minister of Intergovernmental Affairs of Canada.

“Minister LeBlanc, who is leading the trade discussions with the Americans on all commodities, now has softwood lumber on the top sheet of the negotiating docket,” said Herron.

One way or the other, Herron is optimistic the federal government will put all hands on deck to negotiate an accord with their American counterparts for this crucial sector of New Brunswick’s economy.

“But it takes two parties to dance,” said Herron.

With files from the Canadian Press.

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