Softwood exports to U.S. down but it’s not causing big financial pinch

Softwood exports to U.S. down but it’s not causing big financial pinch

OTTAWA — Canada’s softwood lumber exports to the U.S. have fallen since the Americans imposed new duties earlier this year, but thanks to near-record wood prices the industry isn’t suffering much from the political trade fight.

As the clock inches towards the end of 2017, it seems unlikely a new softwood agreement will be inked between Canada and the U.S. this year, but even the industry association representing most softwood producers in Canada isn’t that concerned about it.

Joel Neuheimer, vice-president of international trade and transportation for the Forest Products Association of Canada, said the higher price of wood and the insatiable demand from U.S. builders, is helping keep the duties from pushing companies to lay off staff, cut production or even close down.

“If we were not seeing the same kind of demand and the same kind of high prices we’re seeing then we might be in an entirely different type of situation,” said Neuheimer.

Trade data from the United States Department of Agriculture shows the amount of Canadian softwood imported was down eight per cent for first nine months of 2017, compared with the same period in 2016.

However the value of those imports went up very slightly — 0.15 per cent — because even though less wood was shipped, each piece of lumber was worth more.

Trade data from Statistics Canada shows British Columbia producers are bearing the brunt of the drop, with softwood exports to the U.S. down about 33 per cent. The value of those exports was down 28 per cent.

British Columbia’s wild fires last summer had a big impact on the province’s forestry industry, with softwood exports in July and August only about half what they were a year earlier.

Quebec exports to the U.S. actually went up three per cent and Ontario exports are up 11 per cent so far this year.

Quebec and Ontario rely almost exclusively on U.S. markets for their wood, with 99 per cent of Ontario shipments of softwood and 98 per cent of Quebec’s going to the United States.

In 2016, about 81 per cent of B.C. softwood was exported to the United States, while in 2017 that fell to 63 per cent. B.C. producers saw their exports to the rest of the world jump 67 per cent this year.

Between 2001 and 2006, when the last softwood lumber dispute took place, it’s believed about 15,000 jobs disappeared in the softwood industry.

This year Neuheimer said there haven’t been any reported layoffs as a result of the dispute.

Canada and the U.S. continue to negotiate a new softwood trade agreement, but in the meantime the U.S. Lumber Coalition complaint stands that Canada unfairly subsidizes its producers with low stumpage fees for harvesting trees on government land and that Canadian producers are selling wood into the U.S. at lower prices than they sell it at home.

The complaints led to the current duties imposed by the U.S. Department of Commerce last spring and verified in November. Canadian producers paid about $500 million in deposits for the duties thus far, with more to come in 2018 if there is no settlement.

Canada is challenging the duties under both the North American Free Trade Agreement and at the World Trade Organization. The NAFTA dispute panel has to make a ruling by next fall. The WTO process could take years.

Neuheimer said there is a desire to reach an agreement since the industry’s position is not guaranteed, because prices could change. That lack of certainty means the industry is not investing in itself much while it awaits an outcome to the dispute.

However he acknowledged the pressure that existed to settle the last time is much lower when the producers are not feeling the financial hit as deeply.

“It does make it easier to perhaps be more patient,” he said.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

(Image from Facebook)
Rocky Mountain House store bars vaccinated customers

‘No proof the vax works and no proof it does not shed’

Bloc Québécois MP Sebastien Lemire rises during question period in the House of Commons on Parliament Hill in Ottawa on Friday, March 12, 2021. A Bloc Québécois MP has apologized for taking a screen shot of a Liberal MP who inadvertently appeared nude during virtual proceedings in the House of Commons last week. THE CANADIAN PRESS/Sean Kilpatrick
Bloc Québécois MP apologizes for taking nude photo of Liberal MP William Amos

‘I have no idea how that photo made its way into the media’

FILE - This Sunday, June 25, 2017, file photo shows TK Holdings Inc. headquarters in Auburn Hills, Mich. A driver in South Carolina is the latest person to be killed by an exploding Takata air bag inflator. Honda says that a faulty driver’s air bag blew apart in a crash involving a 2002 Honda Accord in Lancaster County, South Carolina. The company wouldn’t give details of the Jan. 9, 2021, crash near Charlotte, North Carolina, nor would it identify the person who was killed. (AP Photo/Paul Sancya, File)
South Carolina driver killed by exploding air bag inflator

Drivers can check to see if their vehicles have been recalled

Hospital staff shift the body of a COVID-19 patient on a stretcher to a waiting ambulance at a specialized COVID-19 hospital in Noida, a suburb of New Delhi, India, Wednesday, April 21, 2021. (AP Photo/Altaf Qadri)
Low on beds, oxygen, India adds global high 314K virus cases

Government rushing oxygen tankers to replenish hospital supplies

A traveler wearing a protective mask, due to the COVID-19 outbreak, walks through the nearly empty JetBlue terminal at Logan Airport in Boston, Friday, May 29, 2020. THE CANADIAN PRESS/AP, Charles Krupa
JetBlue expanding wings with service to Vancouver from New York and Boston

JetBlue will have to compete with Canadian airlines

Westerner Park’s Exhibition Hall was used as a vaccination clinic on Wednesday. A steady stream of people came to get their COVID-19 shots either by appointment or as walk-ins. Photo by PAUL COWLEY/Advocate staff
No long lineups at walk-in vaccination site in Red Deer

A steady stream of people walked into Westerner Park on Wednesday to… Continue reading

A Blanding’s turtle (Gabrielle Fortin/Contributed)
Earth Day: Finding hope in an old sweater

During the pandemic, many of us have spent several months at home.… Continue reading

Education Minister Adriana LaGrange says 1.7 million reusable masks have been ordered at a cost of $4.2 million.” (Advocate file photo).
Alberta teachers and education minister swap accusations of politicizing curriculum

EDMONTON — Education Minister Adriana LaGrange says the group representing Alberta teachers… Continue reading

FILE - In this March 19, 2021, file photo, people take pictures of the Olympic rings installed by the Japan Olympic Museum in Tokyo. The vaccine rollout in Japan has been very slow with less than 1% vaccinated. This of course is spilling over to concerns about the postponed Tokyo Olympics that open in just over three months.(AP Photo/Hiro Komae, File)
Olympic bodies launch competitive series in virtual sports

Olympic body hopes to reach more young people

Linda Tomlinson
Gardening: Leave the lawn until the soil is dry

Spring is arriving, Alberta style with warm days, cold days and snow.… Continue reading

Silent protests were held recently in response to Red Deer Public Schools’ decision to reject a Pride Week in favour of a Diversity Week. Some former employees at Red Deer Public are saying the decision is misguided. (File photo by Advocate staff)
Letter: School board silencing Pride Week concern

While it has been our practice to not comment on matters arising… Continue reading

Most Read