Wynne urges provinces to unite against U.S. tariffs
Ontario Premier Kathleen Wynne says she and her provincial counterparts recognize the need to present a unified response to the new U.S. lumber tariff despite their divergent self-interests.
“There are different interests in the east and in the west, and we are not necessarily holding hands across the country and singing from the same song sheet,” Wynne said Wednesday in an address to the Ontario Natural Resources Forum in Toronto. “Having said that, there’s a real willingness to find common ground across the country in our messaging.”
The U.S. Chamber of Commerce on Tuesday announced initial softwood lumber tariffs of up to 24 per cent. The move was the fifth formal bilateral dispute over softwood lumber over four decades. American lumber producers have long claimed Canada’s industry is unfairly subsidized.
All Canadian companies that export softwood lumber, used mainly in home construction, must pay duties that are retroactive for 90 days. The U.S. has previously tried to impose sanctions, but they have not held up in legal challenges.
Wynne said the premiers and Prime Minister Justin Trudeau agreed on a conference call Tuesday that they need to find a cohesive approach despite their differences.
The premier said she has also spoken individually with the premiers of Quebec and New Brunswick — some of the biggest lumber producers in Eastern Canada — and she believes their interests are aligned.
The countervailing duty ended a three-decade old exemption granted to the Atlantic provinces because their forestry industries are not subsidized. They had been hoping the Trump administration would uphold their favoured status.
Wynne also made a renewed call to the federal government to implement a loan guarantee program to help forestry companies weather the new duties. She did not say whether Ontario is considering implementing its own program, as Quebec has done.
British Columbia is more reluctant to ask for federal assistance out of fear a new program could be construed as further unfair subsidies of the Canadian industry. B.C. is home to some of Canada’s biggest forestry companies such as West Fraser Timber and Canfor, which are better able to weather a new battle than the smaller sawmills in Central Canada.
The abrupt move on lumber, followed by a tweet Wednesday from U.S. President Donald Trump signalling he may crack down on the dairy sector next, paints a foreboding picture of trade relations amid a much bigger trade issue — the potential renegotiation of the North American Free Trade Agreement.
Trump is considering an executive order that would kick off the U.S. withdrawal from NAFTA, media reports suggested Wednesday.
The softwood lumber tariffs represent the new U.S. administration’s first foray into trade negotiations with Canada, so the way Ottawa and industry respond will be precedent setting, said Kevin Edgson, president and CEO of Eacom Timber Corp.
“There’s people that are going to suffer, there’s companies that are going to suffer and those casualties are going to come in the face of an unfair attack,” he said.
The head of the company that employs 1,100 in Ontario and Quebec echoed the Ontario premier’s sentiments that Canadian governments and industry need to work together on a united approach.
“The biggest challenge here is not the differences on the Canadian side, it’s finding someone who is willing to be constructive south of the border, and to sit down and discuss what is fair and reasonable,” Edgson said.
Representatives from the Prospectors and Developers Association of Canada were meeting with Ottawa on Wednesday to discuss the potential impact of NAFTA renegotiations on the Canadian mining industry, said executive director Andrew Cheatle.
However, he added, the organization is not worried that the move signals a broader attack on Canada’s resources industry, which relies heavily on exporting goods through and to the United States.
“We are very aware that softwood lumber is an issue that has been going on for a long time, even under previous administrations,” he said. “So it’s a political statement.”
Ontario’s premier said the government was both worried and prepared for the Trump administration to impose softwood lumber duties.
Ontario has increased its resources in Washington and has appointed former federal trade minister Jim Patterson its chief negotiator in the ongoing trade dispute to gather “minute-by-minute intel,” she said. Quebec and British Columbia also have trade envoys in Washington.
“This is a day by day issue,” Wynne said. “We just never know what’s going to come out of the United States these days.”