Tamar Atik

Tamar Atik

Dec. 8, 2017 – The U.S. International Trade Commission (ITC) voted 4-0 unanimously on Thursday in favour of the U.S. lumber industry.

The ITC holds the position that the Canadian government’s subsidies to its softwood lumber producers have harmed U.S. producers.

The U.S. Lumber Coalition supports the decision. “The massive subsidies that the Canadian government provides to its lumber industry and the dumping of lumber products into the U.S. market by Canadian companies cause real harm to U.S. producers and workers,” said the U.S. Lumber Coalition’s Jason Brochu. “Now, with a level playing field, the U.S. lumber industry, and the 350,000 hardworking men and women who support it, can have the chance to compete fairly.”

“With the enforcement of U.S. trade laws, lumber mills across the country will be able to make important investments in employees and mill operations so we can expand production to meet demand,” the U.S. Lumber Coalition’s Joe Patton said.

The National Association of Home Builders (NAHB) said the tariffs will increase the price of an average single-family home built in 2018 by $1,360.

"We are disappointed by the ITC ruling and believe this is a protectionist measure designed to safeguard the interests of major domestic lumber producers at the expense of American consumers,” chairman Granger MacDonald said.

“The U.S. and Canada need to hammer out an equitable agreement to resolve this ongoing trade dispute that will provide American consumers a steady supply of lumber at a reasonable price," he said.

BC Lumber Trade Council president Susan Yurkovich said the decision “is completely without merit.”

“The ITC finding of ‘injury,’ despite the current record-setting profitability of the U.S. lumber industry, makes it very clear that this was not an objective evaluation of the facts,” she said. "There can be no doubt that this process is biased in favour of the U.S. industry.”

The BC Lumber Trade Council said it plans to fight the decision and initiate appeals as soon as possible.

“The U.S. Coalition’s claims of injury ring particularly hollow given the extraordinary financial performance that the U.S. lumber industry is enjoying, and given that Canadian imports are at a lower level today than at the levels deemed non-injurious under both the 2006 Softwood Lumber Agreement and by the ITC itself in the last round of litigation,” Yurkovich said.

The Lumber Coalition petitioned the U.S. Commerce Department in November 2016 to launch an investigation to determine whether or not the Canadian government was providing unfair subsidies to its lumber producers.

The Commerce Department launched its official investigation in December 2016.

Over the course of the investigation, preliminary countervailing and anti-dumping duties were applied to Canadian producers.

The average preliminary countervailing tax was 19.88 per cent, while the average preliminary anti-dumping tax was 6.87 per cent. Combined, that meant most Canadian producers were paying 26.75 per cent in duties.

West Fraser, Canfor, Tolko, Resolute and J.D. Irving were individually investigated and paid combined taxes ranging from 9.89 to 30.88 per cent.

The Commerce Department ruled in November 2017 that the two softwood markets are unequal due to Canadian producers having unfair advantages over their American counterparts and announced its final duties.

However, the overall rate dropped from 26.75 to 20.83 per cent for most Canadian producers.

So far, Canadian companies are reported to be doing well thanks to record-high lumber prices and a steady demand for wood from the U.S.
Nov. 22, 2017 - Florida-based Rayonier Advanced Materials has finally completed its acquisition of Montreal-based Tembec.
Nov. 17, 2017 - WorkSafeBC said it is upholding its decision to impose more than $1 million worth of penalties against Babine Forest Products for a major explosion and fire at its Burns Lake sawmill in 2012.

The explosion killed two people and injured more than 20 others.

WorkSafeBC determined the cause of the explosion and fire to be wood dust. Read the full story by the Prince George Citizen.
Nov. 17, 2017 - Tolko Industries Ltd. said it is committed to rebuilding its Lakeview mill in Williams Lake, B.C. after it was damaged by fire.
Nov. 16, 2017 - An employee of a contractor working for TimberWest was killed Wednesday morning when the logging truck he was driving veered off the road.

The truck plunged into water near TimberWest's Honeymoon Bay operations adjacent to Lake Cowichan on Vancouver Island.

“We express our deepest sympathies to the family, friends and colleagues affected by this tragic accident," TimberWest president and chief executive officer Jeff Zweig said in a statement. "A fatality within our forest community deeply impacts all of us."

TimberWest said it is working closely with the RCMP, WorkSafe BC and its contractor on the investigation.

The company said operations were suspended out of respect for the deceased and his family, and to provide support to friends and colleagues.
Nov. 6, 2017 - Tolko Industry Ltd's Lakeview Mill in William's Lake, B.C. was shutdown over the weekend after a fire broke out at the sawmill on Thursday.

The fire was declared officially extinguished on Friday. There were no injuries.

Tolko said in a release on Friday that structural engineers were to be on site assessing the fire damage on Saturday. "When we have a better understanding of the impact, we can begin to develop a recovery plan to return the sawmill to full operations," Tolko said.

A Tolko representative told CFI on Monday afternoon EST that efforts are still underway to get operations back in order and to get the planer running again.
Nov. 3, 2017 – Canadian softwood lumber producers Western Forest Products (WFP) and Interfor commented in separate news releases on the U.S. Commerce Department’s final decision to apply subsidies to all Canadian producers.

The average revised countervailing duty was lowered to 14.25 per cent, while the average revised anti-dumping duty was lowered to 6.58 per cent.

“Interfor is of the view that these duties imposed by the U.S. are without merit and are politically driven,” the company stated.

The U.S. government’s decision has prompted affected Canadian companies who once relied heavily on the U.S. market for profit, to visit global options.

WFP stated it has mitigated the duties by increasing lumber sales to China.

WFP's results for the third quarter of 2017 include countervailing duty expense of $2.9 million and anti-dumping duty expense of $3.6 million.

Interfor said it recorded $9.4 million of countervailing and anti-dumping expenses in its third quarter of 2017.

The softwood lumber agreement between Canada and the United States expired two years ago in October 2015

The US Lumber Coalition petitioned the American government in November 2016 to impose taxes on Canadian producers citing unfair subsidies provided by the Canadian government.

“The Canadian forest products industry and Canadian federal and provincial governments strongly deny these assertions which have previously been disproved in international courts,” WFP stated.

The Commerce Department launched an official investigation in December 2016. It decided to apply preliminary countervailing subsidies on all Canadian producers in April 2017 ranging from three to 24 per cent.

Preliminary countervailing duties of 19.88 per cent ended in August 2017, and the U.S. International Trade Commission will determine by December 2017 whether or not the revised duties will be paid going forward.

Anti-dumping duties of an average 6.87 per cent were implemented preliminarily in June 2017, and are required to be paid according to the revised percentages that were released Nov. 2.

“As we expect retroactive duty application to be reversed, consistent with the results of past softwood lumber disputes, we will recognize the retroactive duties as a deposit only upon payment,” WFP said.

“Interfor has not yet submitted any deposits in respect of retroactive duties relating to critical circumstances, which could total approximately US$3.0 million in respect of anti-dumping,” the company stated. “Interfor does not believe the retroactive application of such duties will stand up under final scrutiny which, in turn, should result in a full return to the company of any related deposits.” 

“We intend to maintain our strong balance sheet and diversified product and geographic sales mix as we await the outcome of the trade discussions,” WFP stated.

“Interfor intends to vigorously defend the company's and the Canadian industry's positions through various appeal processes, in conjunction with the B.C. and Canadian governments,” Interfor said.
Nov. 2, 2017 – Bad news for Canadian softwood lumber producers. The U.S. Department of Commerce just slammed a 20.83 per cent duty on most Canadian softwood lumber producers.

The decision is final, following preliminary taxes that were announced in April.

Anti-dumping taxes are required to be paid right away, but the decision on countervailing duties will be made in December 2017.

“The U.S. Department of Commerce’s decision on punitive countervailing and anti-dumping duties against Canada's softwood lumber producers is unfair, unwarranted and deeply troubling,” Canada’s Minister of Foreign Affairs, Chrystia Freeland, and Minister of Natural Resources, Jim Carr, said in a joint statement on Thursday.

“We urge the U.S. Administration to rescind these duties, which harm workers and communities in Canada,” the statement read.

A less dreary side of this decision is that the overall duty rates have been decreased from the preliminary round. They went down to 20.83 per cent from 26.75 per cent previously.

“While I am disappointed that a negotiated agreement could not be made between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada,” commerce secretary Wilbur Ross said in a news release.

"This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices.”

Ever since the softwood lumber agreement between Canada and the United States expired in October 2015, relations on this front – and chances for co-operation ­– have been dismal. 

The U.S. Lumber Coalition’s decision to launch a petition in November 2016 asking the U.S. Commerce Department to impose duties on Canadian softwood lumber imports only made matters worse. The coalition cited unfair subsidies for Canadian lumber producers. 

"We are pleased the U.S. government is enforcing our trade laws so that the U.S. lumber industry can compete on a level playing field," the coalition’s co-chair and co-president of Pleasant River Lumber Company Jason Brochu said in a statement. 

"The massive subsidies the Canadian government provides to their lumber industries have caused real harm to U.S. producers and their workers,” he said. “With a fair-trade environment, the U.S. industry, and the 350,000 hardworking men and women who support it, have the ability to grow production to meet much more of our country's softwood lumber demand."

The National Association of Home Builders (NAHB) said the decision could not have come at a worse time amid rebuilding efforts in the aftermath of major hurricanes and wildfires in the U.S. “This tariff only adds to the burden by harming housing affordability and artificially boosting the price of lumber,” chairman Granger MacDonald said in a statement. “It is nothing more than a thinly-disguised tax on American home buyers, home builders and consumers.”

"This is particularly disappointing given that NAHB met recently with commerce secretary Wilbur Ross to express our concerns on this issue,” he said. “Unfortunately, the administration is taking protectionist measures to support domestic lumber producers at the expense of millions of U.S. home buyers and lumber consumers.”

In June 2017, the Canadian government announced it would be providing close to $870 million in support for all affected Canadian softwood lumber producers.

"Canada and the U.S. need to work co-operatively to achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber,” MacDonald said.

The Alberta Softwood Lumber Trade Council’s co-chair Paul Whittaker said the council is deeply disappointed by Thursday’s announcement. “Unfortunately, the U.S. lumber industry appears to have blocked all attempts at a fair resolution of this issue and we remain at an impasse. It now appears that the only path to resolution is through litigation,” he said.

The BC Lumber Trade Council echoed similar sentiments. “This trade action is being driven by the protectionist U.S. lumber lobby whose sole purpose is to constrain imports of high-quality Canadian lumber and to drive up lumber prices for their own benefit,” said president Susan Yurkovich. “Ultimately, this punishes American consumers who are now paying higher prices for Canadian lumber when they buy, build or renovate their homes.”

The U.S. Department of Commerce announced final combined anti-dumping and countervailing duty rates as follows:

Irving: 9.92 per cent; 

Resolute: 17.90 per cent; 

Tolko: 22.07 per cent; 

Canfor: 22.13 per cent; 

West Fraser: 23.76 per cent; 

All others: 20.83 per cent

“We will forcefully defend Canada’s softwood lumber industry, including through litigation, and we expect to prevail as we have in the past,” Freeland and Carr said. “We are reviewing our options, including legal action through the North American Free Trade Agreement and the World Trade Organization, and we will not delay in taking action.”

The Canadian government said Carr will convene the Federal-Provincial Task Force on Softwood Lumber in the coming days to discuss developments.
Oct. 30, 2017 – Natural Resources Canada has released its 2017 State of Canada’s Forests report. This latest edition delves into forest fires by examining the Fort McMurray fire, and explaining why Canada’s forests need fires.

There is also a focus on the bioeconomy of Canada’s forest sector, and a look at Canada’s timber forest products.

“With the third-largest forested area on the planet, Canada boasts nearly 40 per cent of the world's certified forests, far more than any other country,” Minister of Natural Resources, Jim Carr said in a statement. “From Yukon to Newfoundland and Labrador, the forest sector is benefiting local communities, boosting our economy, helping to advance reconciliation with Indigenous peoples and showing us what we can accomplish when we work together.”

The largest portion of the 2017 report assesses sustainability indicators such as whether timber is being harvested sustainably, how disturbances like forest diseases and insects shape Canada’s forests, how Canadians benefit from forests through employment, and how the forest industry in turn benefits Canada’s economy.

In 2016, approximately 211,000 people were employed by the forest industry. The same year, the forest industry contributed $23 billion to Canada’s gross domestic product (GDP), according to the report.

“Our government believes in this industry and is excited about its future. As this year's chair of the CCFM [Canadian Council of Forest Ministers], Natural Resources Canada has worked with the provinces and territories to highlight forestry's central role in some of the most important issues of our time: combatting climate change, driving innovation and creating economic opportunities for rural and Indigenous communities,” Carr said.

“This edition of The State of Canada's Forests examines some of these exciting opportunities, from the emerging bioeconomy and new construction materials to innovative uses for forest products in auto parts, bioplastics, biochemicals and textiles.”
Oct. 25, 2017 - Canadian lumber producers may still have a long wait ahead of them if they’re hoping for a peaceful resolution to the wearisome softwood lumber dispute that has been plaguing relations between Canadians and our neighbours to the south.

This, according to West Fraser Timber chief executive officer Ted Seraphim.

Seraphim spoke Tuesday morning in a conference call saying the U.S. Lumber Coalition’s actions to date are damaging to U.S. homebuilders and home buyers in the long run.

“I want to reiterate that at West Fraser our preference continues to be to find a durable long-term solution. And as such we are prepared to be patient,” he said. “I can’t stress enough the appreciation we have for the support of our provincial governments in B.C. and Alberta and the Canadian government that work tirelessly to find a solution to this dispute.”

The softwood lumber agreement between Canada and the U.S. expired in October 2015. In November 2016, the U.S. Lumber Coalition launched a petition asking the American government to impose duties on Canadian softwood lumber imports, citing unfair subsidies to American lumber producers. 

The U.S. Department of Commerce applied a 24 per cent countervailing duty on West Fraser in April 2017 — the highest of any other Canadian lumber producer affected. It also applied an antidumping duty of seven per cent in June 2017.

West Fraser has paid $65 million in duties so far in 2017. The countervailing duty requirement was suspended in August 2017 until the U.S. International Trade Commission comes to a final decision.

“The softwood lumber dispute has taken significant time and effort from many of our employees,” Seraphim said.

“The Coalition ultimately is the decision maker at least at this point in time in the U.S., and they haven’t shown a willingness to effectively negotiate,” he said. “I think patience on the Canadian side will be a virtue in the long run.”

West Fraser’s softwood lumber countervailing and anti-dumping duties cost the company $31 million for its current third quarter.

Its third quarter results also reported the company’s acquisition of six sawmills and a finger-joint mill in Florida and Georgia — all formerly part of Gilman Companies.
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