U.S. tariffs on lumber lands N.B. economy as one of the most vulnerable in the country: CIBC report

New Brunswick is one of the Canadian provinces most impacted by U.S. tariffs.

New Brunswick’s reliance on the United States for trade in the forestry sector has landed the province with an unfortunate distinction as one of the top provinces impacted by the ongoing tariffs.

That’s according to a CIBC forecast on provincial trade, which outlined the provinces that are most exposed and at economic risk.

“British Columbia and New Brunswick now appear more at risk, due to the sharp escalation of lumber tariffs, and are no longer expected to outperform the national average next year,” the report states. “Provinces in the rest of Atlantic Canada and the prairies have been more insulated from US trade policy, although Chinese tariffs have been impacting agricultural exports from central Canada.”

Existing 35 per cent anti-dumping tariffs on softwood lumber were met with an additional 10 per cent Oct. 14.

Industry exports have said 45 per cent is not realistic for a sector dependent on the U.S. – although N.B. Premier Susan Holt has reiterated how much the country needs Canadian lumber.

But Holt warned job losses are on the horizon.

“In year-over-year terms, Quebec and New Brunswick are seeing two of the biggest declines, but Alberta, Saskatchewan and Manitoba are not far behind,” the CIBC report warns on the impact the U.S. tariffs are having on trade.

Industry Minister Mélanie Joly told a Fredericton audience of business leaders that financial support for the forestry sector was coming.

“It is an extremely important sector. It is a sector that is pivotal for the economy of New Brunswick and across the country. And so that’s why we’ve developed a very specific support for it which is different from the other types of support for the steel sector and aluminum sector and auto sector,” she told reporters Oct. 15.

But Derek Nighbor, President and CEO of the Forest Products Association of Canada, feels the industry hasn’t received as much attention in the last few weeks – and it needs it.

“Why are you not saying our name publicly anymore? Because we are feeling a whole lot of hurt, just as steel and aluminum is. And I will say, we’re on Team Canada in forestry. I am personally treading very carefully not to be seen to be fighting the auto industry, this needs to be about Team Canada,” he said in an interview with CTV Atlantic. “We need our government to reassure us by continuing to talk about our sector in the same breath as those other sectors.”

Nighbor says the job losses have begun, mostly in western and central Canada. But the longer the 45 per cent drags on, the more we could see.

The industry is worth $600 million in direct revenues for N.B. and employs over 24,000 people. The U.S. makes up about 80 to 90 per cent of its exports.

So the CIBC report doesn’t surprise N.B.’s natural resources minister.

“If financial institutions are concerned about the vibrancy of the New Brunswick economy due to potential losses of economic activity associated with the forestry sector, they have good reason to think that,” John Herron said.

But Herron also followed up, saying the province’s industry has built itself up to weather a storm like this, after year’s of work and due diligence.

“The forestry sector in the province, in New Brunswick, have made a number of investments over the years to maintain their level of competitiveness. So it’s a strong sector. What we need is a trade deal,” he said.

There is heightened concern though.

Kris Austin, MLA for Fredericton-Grand Lake, says one of the province’s larger sawmills is in his riding – and there is concern among the surrounding community.

“This is a huge industry. So to say that we’re going to be the hardest hit, at the top three, I believe it,” he said.

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