$870M in softwood aid for Canada – The federal government announced last week that it would provide close to $870 million to support Canada’s softwood lumber producers in the face of taxes imposed by the United States.
Preliminary countervailing duties were applied on 28 April. Minister of Natural Resources Jim Carr, Minister of Foreign Affairs Chrystia Freeland and Minister of International Trade François-Philippe Champagne made the announcement in Ottawa.
“This action plan delivers on our pledge to take swift and reasonable action to defend our softwood lumber industry and charts a stronger future for the workers, families and communities that depend on it,” Minister Carr said. “We are prepared to take further action, including additional loan guarantees, to address changing market conditions.”
The government’s softwood aid package will provide additional federal loans and the mentioned loan guarantees up to $500 million to forestry companies. It will also increase employment insurance for forestry workers who will lose their jobs as a result of the duties.
The U.S. Lumber Coalition expressed its dissatisfaction with the decision. Spokesperson Zoltan van Heyningen said the U.S. Commerce Department made the right decision by implementing anti-subsidy duties. “Canada continues to push back and refuses to play by the same set of rules,” he said in a statement. “We need a level playing field and must limit the flow of unfairly subsidized softwood shipments flooding the U.S. market, driving American lumber manufacturers out of business.”
The U.S. Lumber Coalition claims that more than 350,000 American jobs would be threatened if softwood duties were not imposed on Canadian producers. The Coalition first filed its petition to the Commerce Department in November 2016.
In a contrast to the Coalition’s response, reactions to the news from Canadian forestry groups have exuded gratitude and optimism. “The Federal Government’s renewed support for innovation in the forest sector will deliver tangible benefits in the emerging bio-based economy and to Indigenous communities dependent on the sector,” said Pierre Lapointe, president and chief executive officer of FPInnovations.
“This announcement will further develop markets for wood construction and de-risk innovative research of the next generation of technologies, processes and products thereby assuring the economic future of hundreds of communities and an environmentally sustainable forest sector,” Lapointe said.
The forest industry accounted for $22 billion of Canada’s GDP in 2016. Most of Canada’s softwood lumber exports go to the U.S., with more than 50 per cent coming from B.C.