B.C. industry supporting federal challenge to U.S. lumber duties

The B.C. lumber industry is standing behind a new challenge by Ottawa to Washington’s latest shot to hike duties on softwood lumber heading south of the border.

The federal government is filing the grievance under the recently renewed North American free-trade pact.

Trade Minister Mary Ng says in a statement that the extra costs are likely to hit American homebuyers and homeowners hardest, saying the duties are also a tax on U.S. consumers that will raise construction and renovation costs.

Susan Yurkovich with the BC Lumber Trade Council notes this challenge through the USMCA — the former NAFTA — won’t provide any relief for B.C. producers, as the added costs are held in trust until the dispute is settled.

“It takes a very long time for this thing to work out, what we should be doing is working towards a durable solution, but we can’t do that until the US is prepared to come to the table,” says Yurkovich.

Around $6-billion is currently being held in-trust as the dispute lingers. However, that number is only going to rise, because of the nearly nine per cent increase in tariffs Washington began imposing against Canadian producers last month.

“Cash that’s coming out of companies in British Columbia’s pockets and it puts a strain obviously on liquidity and it makes it more difficult for them to do business.”

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Late last month, the U.S. government nearly doubled the tariffs on Canadian softwood lumber as part of a long-running dispute that stems from the U.S. industry’s belief that their northern counterparts get help from the federal government.

The Liberals have been under fire from opposition parties for not preventing the new round of tariffs, particularly given expectations that trade disputes would dissipate with Joe Biden in the White House rather than Donald Trump, with his protectionist policies.

The government had hinted that it was prepared to impose countervailing measures, or take a more formal stance in challenging the duties under the Canada-United States-Mexico Agreement.

Ng says the government remains interested in negotiating a settlement to the trade issue, but decided to go the route of a trade challenge in the absence of any movement from the Americans.