FREDERICTON — Maine’s governor is expected to support New Brunswick’s bid for exemption from softwood lumber tariffs at a White House meeting Wednesday, the province’s trade minister says.
The U.S. Department of Commerce hit Canada late Monday with an additional 6.87 per cent in preliminary average anti-dumping tariffs, leaving the industry facing average duties of about 27 per cent.
The decision exempts the other three Atlantic provinces, but New Brunswick — exempt from such tariffs in the past — is not.
The province’s trade minister, Roger Melanson, said Premier Brian Gallant has been talking with Maine Governor Paul LePage to make the province’s case.
LePage was believed to be meeting with U.S. President Donald Trump Wednesday, officials with the Foreign Affairs Department in Ottawa said.
LePage’s office did not immediately respond to requests for comment.
Melanson said LePage knows the importance of strong trading ties with New Brunswick.
“Maine is a big market for us and New Brunswick is a big market for the state of Maine for different reasons …. We need to work very hard to regain the exemption status that we benefited from for 40-some years,” Melanson said.
Melanson said Monday’s decision is only preliminary, and “we’re using every single tool in the toolbox to be able to make our case.”
Last month, the New Brunswick government appointed former U.S. ambassador David Wilkins as the province’s special envoy on the softwood trade dispute.
The proposed anti-dumping tariffs are in addition to countervailing duties of three to 24 per cent announced in late April.
Gilbert Carre, general manager of Twin Rivers Paper Co. of Edmundston, N.B., and Madawaska, Maine, said the additional duty will have a big impact on its operations and sawmills across the province.
He said the company will take a couple of weeks to evaluate the extra tariff before deciding whether it needs to curtail its operations at its sawmill, pulp and paper operations.
“This could have an effect on over 1,000 jobs at Twin Rivers,” he said in an interview.
Carre said large producers will survive until a final determination on duties is made by early next year, but small operators could be forced to make staffing decisions in about a month, depending on lumber prices.
“If the lumber market weakens at any rate from where it is now, there’s going to be obvious closures of sawmills, not only in New Brunswick but across Canada.”
Mike Legere, executive director of Forest NB, called the proposed tariffs a major disappointment but didn’t expect it would have much impact in the short term.
“Mills are still running and lumber is still rolling across the border, albeit it’s a little more constraining than it was two days ago,” he said Tuesday.
Legere said he wasn’t surprised by the preliminary ruling.
“It’s a divide and conquer strategy by the U.S. Department of Commerce and the U.S. lumber lobby. The avenue now that remains for New Brunswick with regard to exemption is to get back to the negotiation table, get an agreement and make one of the conditions be full Atlantic exemption inclusive of New Brunswick,” he said.
In neighbouring Nova Scotia, the government welcomed news that its softwood lumber producers would be exempt.
“We believe that yesterday’s outcome is a positive signal for our province’s softwood lumber industry,” it said in a statement, but added that officials were still reviewing the ruling.
While most softwood lumber exporters in New Brunswick would be paying a combined rate of about 27 per cent, it would be about 10 per cent for J.D. Irving Ltd., who was hit with just a three per cent countervailing duty in April’s preliminary ruling.
Still, Jerome Pelletier, CEO of New Brunswick Lumber Producers and a J.D. Irving vice-president, said the latest ruling would still have a significant impact on his company.
“We were expected to be excluded once again. We firmly believe that nothing has changed in New Brunswick when you look at the forestry regime over the last decade. Nothing would justify why New Brunswick is not excluded once again,” Pelletier said.
He said while lumber markets are currently strong, small companies who rely heavily on exports to the United States could be in trouble.
“If you’re another company and paying 27 per cent duty, there’s no doubt you don’t have a lot of room here before you have to shut down operations,” he said.
He’s urging the federal government to get back to the negotiating table with the United States.