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Softwood Lumber Dispute: Canadian Industry at Breaking Point

Strategic Insights

— 1 min read

Canada's lumber industry is sounding the alarm as the B.C. government and Ottawa prepare for a softwood summit to discuss the long-standing trade dispute with the United States. Sawmills are operating at below break-even levels, and the accumulated U.S. duties paid by Canadian softwood producers since 2017 are now valued at more than US$7.2-billion. The industry is urging the federal government to take more aggressive action to resolve the cross-border fight over lumber, which dates back to the early 1980s.

Key Takeaways:

  • The softwood lumber agreement between Canada and the U.S. expired in 2015, leading to a 10-year dispute over trade practices.
  • Canadian softwood producers have been paying U.S. lumber duties since April 2017, with accumulated duties now valued at more than US$7.2-billion.
  • American import taxes on softwood from Canada now total 45.16 per cent for most Canadian producers, with lumber supplies facing an anti-dumping duty rate of 14.63 per cent and a countervailing duty rate of 20.53 per cent.
  • U.S. President Donald Trump announced new 10-per-cent tariffs on shipments of softwood lumber from Canada and other countries in September, citing national-security concerns.
  • Ottawa's $1.2-billion financial package includes $700-million in loan guarantees to help Canadian lumber producers and $500-million in grants and contributions to diversify markets and reduce dependence on the U.S.
  • A new digital advertising campaign by the B.C. government will highlight how Canada faces much higher import taxes on softwood compared with Russia, as well as focusing on costs for American home construction and renovation projects.

Statistics:

  • US$7.2 billion: accumulated U.S. duties paid by Canadian softwood producers since 2017
  • 45.16%: American import taxes on softwood from Canada for most Canadian producers
  • 14.63%: anti-dumping duty rate on lumber supplies from Canada
  • 20.53%: countervailing duty rate on lumber supplies from Canada
  • 35.16%: total import levies on Canadian lumber in the U.S. market
  • 10%: new tariffs on shipments of softwood lumber from Canada and other countries
  • US$1.2 billion: federal financial package to support Canadian lumber sector

Sources:

  • Globe and Mail
  • BC Lumber Trade Council
  • Forest Products Association of Canada
  • Canadian Lumber Trade Alliance
  • Independent Wood Processors Association of British Columbia
  • Business Development Bank of Canada
  • X (social media platform)
  • The Canada-U.S. softwood agreement (2006)
  • Trade Expansion Act (Section 232)

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