A preliminary decision to reduce steep border tariffs on Canadian lumber imports is a step in the right direction, but a long way from relief for the struggling B.C. industry, the B.C. Council of Forest Industries says.
A preliminary finding by the U.S. Commerce Department on the long-running trade dispute could cut the border duties by half, but that won’t be clear until a final adjudication in August, COFI president Susan Yurkovich said Wednesday.
And the ruling is for “administrative review one,” a period ending in 2019 when the North American lumber industry was making its highest returns ever. “Administrative review two” began on Jan. 1, and could result in further penalties on Canada’s producers.
“It’s Groundhog Day,” Yurkovich said of the continuing claims of “dumping” and “injury” coming from U.S. producers. “We continue to keep fighting but it’s a very long process and it doesn’t provide immediate relief to our industry.”
The heaviest import duties fall on B.C.-based companies, with West Fraser facing a total of more than 23 per cent. Tolko is penalized 22 per cent and Canfor duties total more than 20 per cent, combining countervailing and anti-dumping penalties.
The latest finding has one glimmer of hope for B.C., Yurkovich said.
“The one positive is that they’re finally starting to recognize that there might be a difference for beetle-killed wood,” she said. “They had never recognized that before and they didn’t include any provision for that.”
The U.S. Lumber Coalition issued a statement indicating it is undeterred by the preliminary finding, and applauding the continued investigation.
“The U.S. softwood lumber industry is pleased that the U.S. government is fully enforcing our trade laws,” said Jason Brochu, co-chair of the U.S. coalition. “Canada’s massive subsidies to their lumber industry have caused real harm to U.S. producers and workers. The U.S. lumber industry will continue to push for the full enforcement of the U.S. trade laws during this ongoing process.”
Another decision is expected from Canada’s appeal to the World Trade Organization, which held two hearings in 2019. The WTO has ruled in Canada’s favour in previous rounds, on U.S. claims that buying Crown-owned timber represents an unfair subsidy to Canadian construction materials.
The first round was in 1982, and the fifth remains in place in 2020.
In the meantime, companies continue to pay penalties into a U.S. government fund.
“When all of the appeals are exhausted and all of the administrative reviews are completed, in theory those cash deposits are refunded to the companies,” Yurkovich said. “It’s their business strategy. Harm your competitors rather than getting more efficient or focusing on growing the market.”