Softwood Lumber Deal Priority for B.C.
Prince George, B.C. – The Softwood Lumber Agreement is not a pressing issue to the United States right now, says Dana Hayden, President of Hayden Consulting Services and lead on the Softwood Lumber Agreement folio, but B.C. is pushing to get the U.S. to the negotiating table.
“Certainly Premier Clark has indicated to the Prime Minister that a Softwood Lumber Agreement is a priority for B.C.” says Hayden B.C.’s lumber exports are important to Canada, accounting for half of all lumber exports from Canada and one in every 16 jobs in B.C. is linked to the forestry sector.
“We are urging Canada to get the U.S. to the negotiating table as soon as possible” says Hayden. But the SLA is not a priority for the United States says Hayden.
That urgency is being at least partially driven by the U.S. election which will see senior advisors switching to election mode by the summer.
“We are petitioning the U.S. government alot to get them to the table.”
She says a new agreement should be based on the last agreement which expired in October, and while not perfect, it would take years to develop a new agreement, “So we are advising the Government to use the last agreement and just tweak it a bit.”
The Softwood Lumber Agreement expired in October of 2015, and imposed an export tax based on the price per thousand board feet of lumber. The lower the price, the higher the export tax. In return , the U.S. agreed not to take trade action against Canada, and returned 80% of the duties on lumber it had collected up to the signing of the SLA .“It (the SLA) was a compromise” says Hayden, “Obviously free trade would have been better for Canada, but the one thing it did provide, was stability and certainty.”
With the previous agreement expired, the industry is in a “standstill year” . Until October of this year, there are no duties, no taxes.
There are three potential scenarios that could take place regarding lumber trade with the U.S:
- Successfully negotiated trade agreement.
- Countervailing duty and anti-dumping investigation, Hayden says this could be launched by the US as early as October of 2016. She says B.C. is well prepared to defend its position, although it’s time consuming and costly and creates uncertainty in the industry.
- Free trade: although this is the preferred option, that is not likely to happen.
Hayden says the B.C. Government is pushing hard to have a deal “Premier Clark has been telling the Prime Minister this is B.C.’s number one priority. She’s written to him, she’s spoken with him, she’s met with him I think the federal Government has heard quite loudly B.C.’s interest in this regard. At the same token, a deal has to make sense to B.C., not just any negotiated solution.”
Comments
I think we’re in a ‘lose/lose’ situation. All the way around.
I agree socredible. It is common knowledge that BC needs this SLA, if for no other reason than to provide stability. Christy is making all the right noises to give the impression that she is working on the file, however the bottom line is the Americans are not at the table and time is running out. Is anyone in the Trudeau Government working on this file?, and if so is anyone listening?.
The major lumber producers in BC now own a significant number of lumber mills in the Southern USA in the area of N/S Carolina, Georgia, Arkansas, etc; so not sure how this will effect negotiations of a new SLA. Seems to me there could be a conflict of interest here.
Too bad Brian agreed to exclude softwood lumber from NAFTA and sign a separate agreement which is not subject to NAFTA rules. Nothing but wrangling and lawsuits ever since. Canada even agreed to pay hundreds of millions which the US used to pay its legal costs in order to reach a settlement, in spite of Canada having won in court again and again.
Want Trudeau on it, set up a selfi booth.
There was plenty of “wrangling and lawsuits” long BEFORE Brian Mulroney and NAFTA, Prince George. It’s a very old issue, dating way back into the 19th Century.
That is a lame excuse for signing something that was guaranteed to lead to more disputes! We had a every right to expect more from a Prime Minister, like putting Canada’s interests ahead of dancing with Ronald and singing about smiling Irish eyes!
So far as I’m aware, Prince George, it was Canada that wanted softwood lumber excluded from NAFTA. I believe the reason was that it would be hard to get a deal on free trade in softwood lumber if there wasn’t also free trade in softwood logs.
Right now, I doubt the USA has very much, if anything, to gain from renewing the just expired SLA. It’s an election year down there, both for a new President and also for a substantial number of Congressmen and Senators. With somewhat of a ‘lame duck’ President in office. Where’s the incentive to renew a deal many American lumbermen are still convinced is too favorable to Canada? If we flood their market while there’s no deal in place, those who want their votes can simply promise to impose tariffs to protect American jobs.
Another thing, I don’t think Americans in general, to whom ‘terrorism’ is of more concern than even their economy, are going to do any favors for a country that’s going back to being wishy-washy like we are when it comes to fighting the purported source of much of that terrorism.
And another thing, too, Prince George, WITHOUT a renewal of the SLA, a lot of the larger independent mills in the US southeast who HAVEN’T sold out to Canadian companies (yet), are likely increasing the value of their mills and timber supply. IF we flood their market, there will most certainly be tariffs. And that will make their mills more competitive, and more attractive to a Canadian buyer. Like I said, we’re in a lose/lose situation. But I’m sure glad it’s Trudeau that has to deal with it, aren’t you?
At a cost of C$1.45 per US$1.00 I suspect the mill has had to have lost a lot of asset value over the last 3 quarters to be of any interest to a Canuck buyer unless they are buying with US$ investment funds.
Comments for this article are closed.