Soft­wood woes ‘not sig­nif­i­cant’ yet, min­is­ter says

The Globe and Mail (Prairie Edition) - - GLOBE INVESTOR - MIA RAB­SON OT­TAWA

Even though Cana­dian lum­ber pro­duc­ers have paid $500-mil­lion in du­ties since the end of April, high mar­ket prices have off­set costs

Nat­u­ral Re­sources Min­is­ter Jim Carr says for­est pro­duc­ers in Canada have so far been largely un­harmed by the du­ties the United States im­posed on Cana­dian soft­wood im­ports ear­lier this year.

Mr. Carr said the con­sen­sus at a meet­ing of fed­eral and pro­vin­cial forestry min­is­ters on Fri­day was the fi­nan­cial hurt thus far is “not sig­nif­i­cant.”

Cana­dian pro­duc­ers have paid an es­ti­mated $500-mil­lion in coun­ter­vail­ing and anti-dump­ing du­ties since the end of April but those costs are off­set by his­tor­i­cally high mar­ket prices for wood cou­pled with a low Cana­dian dol­lar and ever-in­creas­ing de­mand.

In fact, the main peo­ple feel­ing the pinch are Amer­i­can con­sumers who are pay­ing up to 20 per cent more for hous­ing ma­te­ri­als thanks to the du­ties.

Ini­tially it was felt big Cana­dian com­pa­nies would be able to with­stand the hit but smaller pro­duc­ers would be forced to lay peo­ple off or even close up en­tirely.

That isn’t hap­pen­ing thus far, said Mr. Carr, as the best ev­i­dence of that is the fact that up­take on fed­eral loans and loan guar­an­tees to help pro­duc­ers weather the du­ties has been lim­ited – only about $30-mil­lion has been dis­bursed out of $605-mil­lion made avail­able.

“We have reached out, lit­er­ally thou­sands of let­ters have gone out from the [Ex­port De­vel­op­ment Corp.] to the in­dus­try,” Mr. Carr said. “There is a lot of in­ter­est in un­der­stand­ing what might be avail­able, but to this point there has been, I would say, not a sig­nif­i­cant num­ber of trans­ac­tions be­cause there hasn’t been sig­nif­i­cant de­mand.”

In all, Mr. Carr an­nounced $867-mil­lion in soft­wood aid in June in­clud­ing funds to help work­ers share jobs to pre­vent lay­offs or tran­si­tion to new po­si­tions. An of­fi­cial with Em­ploy­ment and So­cial De­vel­op­ment Canada said on Fri­day it had re­ceived only two ap­pli­ca­tions for funds for job shar­ing.

In­for­ma­tion is not avail­able for any of the other pro­grams be­ing of­fered.

Mr. Carr wouldn’t spec­u­late on whether the fact Cana­dian pro­duc­ers aren’t suf­fer­ing much at this point will have any im­pact on the con­tin­u­ing ne­go­ti­a­tions to get a set­tle­ment agree­ment with the Amer­i­cans.

The pre­vi­ous agree­ment ex­pired in 2015, and af­ter a year’s grace pe­riod, the U.S. Lum­ber Coali­tion once again ap­plied for penal­ties against Canada, ac­cus­ing it of sub­si­diz­ing its in­dus­try.

Canada re­jects the claim and in­tends to fight it in front of in­ter­na­tional trade bod­ies but is also work­ing to reach a new ne­go­ti­ated set­tle­ment.

A deal was close to be­ing signed in the sum­mer but the coali­tion re­jected it over el­e­ments re­lated to the quota for Cana­dian wood.

Su­san Yurkovich, pres­i­dent of the Coun­cil of For­est In­dus­tries, told The Cana­dian Press on Fri­day she thinks there might be pres­sure mount­ing on the coali- tion to ac­cept a deal.

First, it is be­ing noted, in­clud­ing by U.S. Com­merce Sec­re­tary Wil­bur Ross, that de­mand for soft­wood will sky­rocket ow­ing to the two mas­sive hur­ri­canes which hit Texas and Florida in the last month, wood that will cost more as long as the du­ties are in place.

Ms. Yurkovich also said at a meet­ing of the U.S. In­ter­na­tional Trade Com­mis­sion this week, U.S. pro­duc­ers were be­ing forced to ac­knowl­edge they are mak­ing more money than ever, and it may be dif­fi­cult – though not im­pos­si­ble – for the com­mis­sion to make a fi­nal find­ing of in­jury if the in­dus­try is clearly not hurt­ing.

She said if the com­mis­sion doesn’t find any ev­i­dence of harm, there will be no du­ties and that would be worse for the coali­tion than ac­cept­ing a soft­wood deal with Canada, be­cause it would mean no quo­tas or tar­iffs at all on Cana­dian im­ports.

There is a lot of in­ter­est in un­der­stand­ing what might be avail­able, but to this point there has been, I would say, not a sig­nif­i­cant num­ber of trans­ac­tions be­cause there hasn’t been sig­nif­i­cant de­mand.

Jim Carr Nat­u­ral Re­sources Min­is­ter

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