Atlantic Canadian forestry sector concerned with impact of tariffs

Nova Scotia lumber companies are preparing for the United States tariffs.

Nova Scotia lumber companies are worried about the impact the possible U.S. tariffs on Canada-wide goods will have on their business.

Some Lumber companies in Nova Scotia have already faced cancelled orders and U.S companies backing out.

“We actually have customers on the other side of the border that have cancelled PO’s since Friday and have turned trucks; we have actually had to turn trucks around. Customers don’t want our products and bring it back to the site. This happened on Thursday, Friday and Saturday and then again today,” says Marcus Zwicker, Freeman Lumber chief operating officer.

Zwicker says Atlantic Canada competes with lumber exports from the European Union. As of now, they won’t be facing similar tariffs, which will give them an advantage over the industry here if tariffs come into effect.

Zwicker says the uncertainty about the tariffs worries him.

“Every week we buy a million and a half dollars in wood. That’s private wood owners, people that actually own forests in Nova Scotia and have to earn a paycheque. Harvesting them and trucking them and they also work in our facility and that’s really what it comes back to is for almost 200 years our company has been selling and manufacturing forest products, selling them all over Atlantic Canada and the U.S,” says Zwicker.

“Seventy-five per cent of our product today goes to the U.S and that can fluctuate in different markets. There’s been times we have been 50/50, but today we are at a 75 per cent mark flowing into the U.S markets,” says Doug Ledwidge, president of Ledwidge Lumber. “A 25 per cent tariff to us means roughly around $80,000 a week, so you know, it’s a significant hit and we are in an industry which is fairly competitive and not paying duties for a number of years and that’s because of our free market system.”

The forestry sector across the Atlantic provinces makes up a significant part of the country’s economy, and the effects of a tariff would be widespread.

“We have a lack of markets for low-grade wood with the closure of Northern Pulp Mill in Abercrombie a few years ago so now contractors and woodlot owners have been struggling to supply their mills already. So, we in Nova Scotia, especially the first economy, have been struggling. So, this is just adding another layer of complexity and cost. It will be devastating. If the tariffs last for longer than a month, I think you are going to see layoffs,” says Todd Burgess, executive director of Forestry Nova Scotia. “We generate about $1.8 billion worth of economic revenue for the province and economic activity in the province. $600 million of that is exported to the United States, so it’s a significant part of the Nova Scotia economy but more important it’s a significant part of the rural economy of Nova Scotia.”

The Softwood Lumber agreement only applies to Nova Scotia, which means currently their lumber to the United States does not get a tariff, but that doesn’t mean the impact isn’t there.

“Most of our sawmills in Nova Scotia export at 60-to-85 per cent of their production goes to the United States so we are very interconnected,” says Burgess.

Tory Rushton, minister of Natural Resources, says it’s important to support Canada.

“Buy local, support local, support Canadian companies and we will get through this together,” says Rushton.

For more Nova Scotia news, visit our dedicated provincial page