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Tariffs

Canada-U.S. Softwood Lumber Dispute: Mark Carney Seeks Truce

Strategic Insights

— 2 min read

Prime Minister Mark Carney has identified securing a truce in the long-standing Canada-U.S. softwood lumber dispute as a top priority, amid threats of even higher U.S. levies scheduled to take effect as early as September. The dispute has been ongoing since 2017, with Canadian softwood exports to the U.S. subject to countervailing and anti-dumping duties. The U.S. Commerce Department has announced plans to increase the combined anti-dumping and countervailing duties against most Canadian softwood producers to 34.45 per cent, more than doubling the current rate.

Key Takeaways:

  • Canadian softwood producers are bracing for even higher U.S. levies, with the U.S. Commerce Department set to implement a new rate of 34.45 per cent by September.
  • Prime Minister Mark Carney has identified securing a truce in the dispute as a top priority, with the goal of resolving the issue through negotiations with the U.S. government.
  • The dispute has been ongoing since 2017, with Canadian softwood exports to the U.S. subject to countervailing and anti-dumping duties.
  • The U.S. lumber industry has long sought to reduce Canada's share of the U.S. softwood market to between 25 per cent and 27 per cent.
  • William Pellerin, a partner with McMillan LLP's international trade group, advises against striking a deal before litigation related to the softwood dispute plays out, citing concerns about Canada capitulating to U.S. pressure.
  • Ravi Parmar, B.C.'s Minister of Forests, expressed concern about the prospect of a rise in U.S. levies on Canadian softwood, stating that increasing the cost of Canadian softwood for U.S. customers runs contrary to President Trump's campaign promises.
  • The U.S. lumber lobby has spoken out against negotiations with Canada, calling for continued enforcement of U.S. trade laws against unfairly traded and unfairly priced Canadian lumber imports.
  • Conservative MP Shelby Kramp-Neuman has expressed concern that the government's efforts to secure a deal are not yielding results, with negotiations ongoing and concessions being made without apparent benefits.

Statistics:

  • 34.45 per cent: The proposed new rate of combined anti-dumping and countervailing duties against most Canadian softwood producers.
  • 25-27 per cent: The target share of the U.S. softwood market sought by the U.S. lumber industry.
  • US$7-billion: The amount of duties collected from Canadian lumber producers by the U.S. government.
  • 60-70 per cent: The percentage of Canadian lumber that must be shipped to the U.S. due to excess production capacity.
  • 50,000: The number of direct jobs in forestry in British Columbia.
  • 100,000: The total number of jobs in forestry and related industries in British Columbia.

Sources:

  • Bloomberg News
  • The Globe and Mail
  • Canadian Press
  • BC Lumber Trade Council
  • McMillan LLP
  • U.S. Lumber Coalition
  • Conservative Party of Canada
  • Dominic LeBlanc, Minister responsible for Canada-U.S. Trade
  • Mark Carney, Prime Minister of Canada
  • Ravi Parmar, B.C.'s Minister of Forests
  • Shelby Kramp-Neuman, Conservative MP and critic for Canada-U.S. trade
  • William Pellerin, partner with McMillan LLP's international trade group.

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