One year since new softwood duties, Canadian industry doing just fine

OTTAWA — One year after the United States imposed stiff import duties on Canadian softwood, strong demand for wood and record market prices mean American consumers and not Canadian producers are feeling the pinch.

In 2017, Canadian lumber producers handed over more than $200 million to the U.S. government to cover duties of about 20 per cent of the value of all exports and with no sign a deal will be struck to end the dispute any time soon, hundreds of millions more will be deposited in 2018 as well.

However, U.S. housing starts were higher than they have been in a decade last year, pushing prices of many lumber products to record highs that more than offset the duties.

During the last softwood dispute with the U.S., 20,000 forestry workers were laid off and 400 sawmills closed, but Derek Nighbor, president of the Forest Products Association of Canada, says the strong U.S. demand means he doesn’t know of any layoffs or mill closures directly related to softwood in the last year.

He says the government’s $867-million aid package to help the industry through the dispute hasn’t been tapped into much because the companies haven’t needed the help.

The federal government’s negotiations on softwood have been very quiet, partly overshadowed by the larger talks on the North American Free Trade Agreement and partly because the industry faces more urgent concerns like pests, forest fires and rail car shortages, says Nighbor.