The head of the association that represents Alberta’s forest industry has slammed a decision by the International Trade Commission to uphold punishing softwood lumber tariffs that could cost the provincial economy an estimated $200 million a year.
“This case demonstrates how the United States is reacting to low worldwide commodity prices by blaming Canadian softwood lumber exports,” says Wayne Thorp, president of the Alberta Forest Products Association (AFPA), which speaks on behalf of companies that manufacture lumber, panelboard, pulp and paper and secondary manufactured wood products.
“This is pure protectionism by the United States.”
The ruling upheld duties of 27.22 per cent, which will be applied starting May 23, but rejected claims that the U.S. lumber industry had already been injured by Canadian softwood shipments. Ottawa is appealing the decision to the World Trade Organization and through the North American Free Trade Agreement.
Canadian lumber companies will have to start paying cash deposits estimated up to $2.2 billion Cdn a year, but should recoup about $760 million in bonds posted for past shipments.
The AFPA said while Alberta forest companies spend millions each year on reforestation, environmental care, road construction, management planning and other areas, in addition to provincial stumpage fees, U.S. companies have those costs covered by the government as part of their stumpage agreements.
Thorp says the Alberta timber industry is bracing for the duties, and re-evaluating their business plans.
“This could mean potential job losses and negative economic impacts in many Alberta communities,” he warns.
Meanwhile, the Retail Council of Canada also denounced the ruling, saying consumers on both sides of the border will lose out.
“American consumers have just been hit with a 29-per-cent sales tax on all Canadian lumber used to build homes,” said the council’s CEO, Diane Brisebois.
