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Op-Ed: Softwood Lumber – The Deal That Didn’t Get Done

Thousands of forestry jobs are at risk because the Liberal government failed secure a framework agreement on softwood lumber with the United States.

While Prime Minister Justin Trudeau focused on figuring out how to work only one hour a week in the House of Commons, the U.S. Department of Commerce slapped duties as high as 24% on Canadian softwood lumber imports. Liberal inaction will affect nearly 60,000 jobs in Alberta. Of those, 19,000 are workers who are directly employed by Northern Alberta’s forestry industry. They and their families will feel the pain first before the economic downturn trickles down to the 38,000 who rely indirectly on the industry for income and security.

U.S. President Trump’s aggressive pro-American trade stance was hardly a surprise, yet the Liberals ignored the warning signs. Instead of negotiating a new softwood lumber agreement, they put the issue on hold and simply hoped for the best.

At issue is the fundamental difference between how Canada and the U.S. price their harvestable trees. The majority of Canada’s trees are located on Crown land while in the U.S., forest land is privately owned. Canadian producers are responsible for costs associated with the industry such as road infrastructure, environmental monitoring, and land management. U.S. producers do not have these additional costs and they allege that Canadian lumber is unfairly subsidized.

In Canada, the forestry industry is also responsible for site reclamation and reforestation. These measures are a requirement of federal and provincial governments to ensure sustainable harvesting for future generations.

A spokesperson for Millar Western noted, “Unlike in the U.S., 100% of areas that are harvested in Alberta must be reforested. We are proud that companies in Alberta planted 74 million seedlings in 2016.”

Past grievances filed by the U.S. regarding timber pricing have not held up in court. NAFTA and the WTO have unanimously and consistently agreed with Canada’s position that the stumpage fee was fair and legal.

The previous Conservative government was well aware of how to bridge the stumpage fee pricing gap. We negotiated a balanced agreement that benefited both countries. Twice. In April 2006, we solved the softwood lumber dispute and signed an agreement that secured Canadian jobs in the industry. In 2012, we negotiated an extension of the deal to ensure market stability through to October 2016.

The agreement that we negotiated worked. The U.S. is unable to meet the demands of their construction industry and it needs Canadian lumber. Canada has more lumber than we need. The U.S. is our biggest customer; 69% of Canadian softwood exports are shipped to the U.S. while 96% of all softwood lumber imports into the U.S. are from Canada.

Given that the U.S. needs our lumber, the 24% increase to the price of lumber doesn’t make sense on the surface. The lumber tariff not only hurts Canada’s forestry industry, it hurts America’s construction industry, increasing the cost for U.S. homebuilders and homeowners alike. Although President Trump can hardly be faulted for putting Americans first with his Buy American, Hire American philosophy, the price of lumber has become a casualty of that philosophy.

Justin Trudeau should have seen this coming. Canadians are outraged that the Liberals didn’t place a higher priority on an issue that threatens to destabilize one of Canada’s most important industries. The Prime Minister needs to get back to work. He needs to start focusing on securing agreements that keep Canadians employed and their futures stable.

While it is clear that Mr. Trump has made Americans his priority, we need a Prime Minister who is willing to make Canadians, their jobs, and their economic wellbeing his number one priority. We need an agreement that will stabilize our forestry sector. And we need a Prime Minister who will fight for Canadians.

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