A new round of punitive U.S. duties being considered for lumber imported from Canada has so far met with moderate backlash from New Brunswick, with the industry saying little and the province taking a full four days to carefully shape its own position.
“As the United States consistently depends on Canadian lumber, including New Brunswick, to meet its domestic demand for building materials, an increase in tariffs on softwood lumber products from Canada is penalizing the American people Premier Blaine Higgs said late on Tuesday.
“This comes at a time when wood prices are at an all-time high, when both countries should focus on finding a solution to this long-standing trade problem in order to foster economic recovery from the COVID-19 pandemic.”
The U.S. Department of Commerce on Friday released anti-dumping and countervailing duty proposals to be applied in the fall on lumber manufactured by 271 Canadian companies, including several in New Brunswick.
Unless new information from affected companies or a negotiated softwood lumber deal between the United States and Canada could dissuade them, the new royalties would take effect in November.
This sparked an immediate reaction in western Canada and Ottawa, but no initial response in New Brunswick – even though the province’s lumber industry, on a per capita basis, is almost as large as that in New Brunswick. British Columbia.
JD Irving Ltd., New Brunswick’s largest lumber producer, did not respond to a request for comment on the proposed new tariffs and neither he nor the Government of New Brunswick have posted any news releases. news about the tariff issue on their websites.
This is a significant change from April 2017, when the province and industry both reacted strongly and instantly to a proposal to impose similar duties in the early days of former President Donald Trump’s administration. .
Irving wrote in a statement that “the survival of our factories” was at stake in how the 2017 initiative was handled, rhetoric that has yet to surface this time around.
Lumber prices have reached record highs for most of 2021, which would make duties on businesses more affordable today than they were five years ago.
But it’s not clear whether this or the hope that President Joe Biden’s administration will be open to a negotiated settlement of the long-standing trade dispute is perhaps holding back the use of fiery rhetoric this time around.
“We remain convinced that a negotiated solution to this long-standing trade problem is not only possible, but in the best interests of our two countries,” Canadian Minister of International Trade Mary Ng said in a statement last week. .
New Brunswick forestry companies produced a record $ 461.1 million worth of treated and untreated lumber in the first three months of 2021, much of which is destined for export to the United States. .
Per capita lumber production in the province is three times the Canadian average, which makes the question particularly important here.
New Brunswick once enjoyed an exemption from U.S. softwood lumber duties that primarily targeted businesses in Western Canada, but in recent years, businesses here have become the target of accusations according to which they are subsidized by access to cheap crown timber.
Since June 2017, New Brunswick has had to mount a series of costly battles on several fronts to prevent and, in some cases, cancel duties on its forest products and prevent the application of new additional tariffs advocated by American competitors.
Last November, those battles won an important victory when the United States Department of Commerce lowered the 20.2 percent tariff it applied to certain New Brunswick softwood exports to 8.9 percent. as part of its annual rate review.
This follows another favorable ruling in June 2019, when the United States found that low property tax assessments on New Brunswick’s private forests were not low enough to warrant special tariffs.
New Brunswick has paid Washington-based lawyers $ 6 million over five years to continue these and other fights and is likely to spend millions more before the current dispute is resolved
“New Brunswick, as part of Team Canada’s efforts, will continue to vigorously defend our industry, including through litigation,” said Higgs.