The Final Cut: Defending our softwood lumber industry
By Susan Yurkovich
Nov. 25, 2016 - In October 2015, a month after I started as President and CEO of the Council of Forest Industries (COFI) and President of the BC Lumber Trade Council, the 2006 Softwood Lumber Agreement between Canada and the U.S. expired. Now, a year later, the standstill period also passed which means the U.S. industry can initiate trade action at any time.
By Susan Yurkovich
Over the last year, the federal and provincial governments have been working with industry across the country to make softwood lumber discussion with the U.S. a priority. The BC Lumber Trade Council has supported these efforts as we believe that achieving a new agreement, if properly designed, is in the best interests of producers, consumers, home builders and workers in the industry on both sides of the border. Completing a new agreement would also allow us to continue the important work being undertaken with the U.S. industry to jointly grow the market for wood products.
As we all know, softwood lumber is a complex trade issue. The industry has been very well represented on this file with the leadership of the Prime Minister, Minister Chrystia Freeland, Premier Christy Clark and Minister Steve Thomson. They have been working tirelessly to continue negotiations and are making every effort to avoid another lengthy trade dispute.
While we are all working hard to achieve an agreement, we are also fully prepared to defend our industry against any potential trade action, as we have done successfully in the past. The U.S. Lumber Coalition continues to rely on its decades-old claim that the Canadian industry is subsidized … claims that they have argued in the past, and that were ultimately rejected in the prior round of trade litigation by independent NAFTA panels. These NAFTA panel decisions concluded that Canadian lumber was not subsidized, and did not cause injury to the U.S. industry.
Today, a number of Canadian companies operate in the U.S and fully understand the market conditions, log costs and operating conditions on both sides of the border. This knowledge strengthens our view that the claim of subsidy is without merit.
With the economy growing, and housing and construction starts on the rise, the U.S. industry alone cannot meet the needs of its domestic consumers and relies on Canadian lumber products. Placing unreasonable constraints on Canadian products from entering the U.S. market will mean higher prices for American consumers and homebuilders. In fact, the National Association of Homebuilders estimates that even less stringent restrictions than those insisted upon by the U.S. Lumber Coalition would lead to a billion dollars of lost investment in housing and a loss of nearly 9,000 jobs in the United States.
By the time this article is in print, there will be a new president-elect of the United States. Whatever the outcome, we expect that both Canada and the U.S. to continue working towards an agreement that is durable and provides certainty for industry, workers and consumers on both sides of the border.
While the softwood lumber trade dispute looms large for our industry, we are also facing challenges, both here in B.C. and in an increasingly competitive global marketplace. The competitiveness agenda recently introduced by provincial Minister Steve Thomson is a step forward toward addressing issues, but we have much more work to do.
At the upcoming COFI Annual Convention, we will discuss the critical issues facing our sector. For the first time, the Convention will take place in Vancouver, at the Vancouver Convention Centre West from April 5-7, 2017. With the theme of Forestry for the Planet, Forest Products for the World, the program will cover critical topics such as trade, international markets, climate change, and sustainability. We encourage you to mark your calendar and be part of this leading forest industry conference in Western Canada.
Looking forward, the one thing I know for sure is that 2017 will be an interesting year. From the inauguration of a new U.S. president, a provincial election in B.C., and the continued discussions on softwood lumber and competitiveness, the forest industry will remain in the forefront and we will continue to adapt, evolve and innovate in the face of change.
Susan Yurkovich is President and CEO of COFI and President of the BC Lumber Trade Council.