Originally published in the Whitecourt Star
U.S. President Donald Trump’s decision on April 24 to impose a 20 per cent tariff on Canadian lumber was met with stiff opposition from local industry leaders.
“We’re completely opposed to it,” said Brock Mulligan, spokesman for the Alberta Forest Products Association and the Alberta Softwood Lumber Trade Council.
Since 1982, U.S. trade representatives have claimed that the Canadian lumber industry is unfairly subsidized, due to its harvests occurring mainly on public land, whereas it is done mostly on private land in the U.S., Mulligan said.
“We’ve seen this happen before and time and again their allegations have been thrown out by various tribunals, whether it’s NAFTA (North American Free Trade Agreement) or WTO (World Trade Organization). We’re confident that this will happen again, but unfortunately we’re going to have to go through the process,” he said.
The previous agreement on the U.S.-Canada softwood lumber trade expired in October 2015.
Whitecourt Mayor Maryann Chichak emphasized that this is an ongoing dispute in U.S.-Canada relations, regardless of which president or prime minister is in power.
“The issue of softwood lumber is one we’ve faced now for the fifth time. We’ve weathered the storm before and we will weather it again. It’s just a matter of how long that dispute will continue on,” Chichak said, predicting that that there will be no regional job losses in the short term.
“As this dispute continues, if it’s not resolved, then we will see job losses, not just for our community but across Alberta and Canada,” she said.
The looming threat of job losses underscores the importance of the provincial government coming up with a caribou range plan that is economically and socially feasible, Chichak added.
“A poor range plan compounded by a dispute that continues could have very devastating effects on communities such as Whitecourt and Woodlands County,” she said.
The dispute also underscores the necessity of Canada expanding its market access for lumber beyond the U.S., Chichak said.
According to Canada Trade, China and Japan comprise 20 per cent of Canadian lumber exports.
“This brings a heightened awareness to the importance over the upcoming decade that we really strengthen and encourage industry and our provincial government to look for other markets for lumber, that we don’t rely on the United States in the event that there’s a sixth dispute in the future,” said Chichak.
Alberta Premier Rachel Notley recently returned from a 10-day trade mission to China and Japan, for which Chichak expressed her approval.
But there are limits to expanding Canadian access to east Asian markets, said Mulligan.
“With the Russian rouble collapsing recently, not only are they closer to us, but they also have a big currency advantage on us too,” he said.
The Japanese market has always been dependable for high-grade Canadian lumber, but there isn’t a lot of room for growth there, due to its ageing population and slow economic growth, Mulligan said.
Mulligan said the tariff would backfire on the U.S., due to its dependence on Canadian lumber for homebuilding.
“They depend upon having an adequate supply of lumber. The Americans don’t produce enough for their own market and they need Canadian lumber,” he said.
Tariffs would increase the price of a single family home in the U.S. by $1,236, which would push more than 150,000 families out of the housing market, said Mulligan, citing a study from the National Association of Homebuilders.
Countries like Chile and Russia, who were previously too far to access the American market, would be at a competitive advantage with the artificial increase in Canadian prices, he added.
“We’ll probably see a substitution of their products in, but the American consumer will have to pay a higher price,” Mulligan said.
Local MP, MLA weigh in
Conservative MP Arnold Viersen, who represents Whitecourt and the area, emphasized the importance of this dispute to his constituents.
“Softwood lumber, the pulp and paper industry, (and) forestry in general is a big deal in northern Alberta,” said Viersen, noting that 6,000 people in his Westlock-Peace River riding work in the industry.
He agreed with Chichak that this is simply the return of an ongoing dispute that would occur regardless of who’s in charge.
“It’s perhaps different in terms of Donald Trump’s bluster, but it’s the same players at stake,” Viersen said.
He said it’s largely the result of certain union interests in the U.S. who are trying to protect their workers’ employment.
“They’re not that concerned about the end user of the product. They’re worried about their jobs, so basically this is an easy way to protect some of their market share,” said Viersen, who agreed with Mulligan that the move will increase the price of American lumber by restricting the market’s supply.
Viersen said that Trudeau and his Global Affairs Minister Chrystia Freeland, who was previously the international trade minister, should have prepared better for this issue to come up.
“We knew this was coming along. We’ve been through this before,” he said. “It should’ve been top of mind.”
Whitecourt-St. Anne MLA and Agriculture and Forestry Minister Oneil Carlier similarly emphasized the industry’s local vitality.
“Our government stands shoulder-to-shoulder with Alberta’s forest workers, their families and communities that rely on a strong forestry industry,” said Carlier.
He said the Alberta government has been working closely with the federal government, particularly a task force headed by Natural Resources Minister Jim Carr, to explore the most appropriate course of action.
“All options are on the table,” Carlier said, that the provincial government had anticipated the re-emergence of this dispute.
He cautioned against linking the softwood lumber dispute with other trade issues, such as supply management for dairy farmers.
“There’s a lot of known measures here in the softwood lumber agreement and in other potential disputes there are so many unknowns,” said Carlier.
It’s important to distinguish between the U.S. administration’s tough rhetoric and what actually occurs during negotiations, he said.
“It’s at this point just comments out of the blue that aren’t necessarily tied to any potential negotiations that haven’t even yet started taking place. Once those have taken place, we can have a little more meat and potatoes where we can go and make those gains,” Carlier said.