Increase in U.S. softwood lumber duties ‘entirely unwarranted,’ trade minister says

OTTAWA — The federal government is lashing out at the U.S. Commerce Department over plans to raise duties on Canadian softwood lumber.

International Trade Minister Mary Ng says the U.S. has signalled it intends to raise duties to 13.86 per cent, up from 8.05 per cent. 

Ng calls the move disappointing and entirely unwarranted.

It’s only the latest salvo in a bilateral back-and-forth that Ottawa has described as a drag on efforts to improve the cost and supply of housing.

Last month, Ng vowed to contest a U.S. International Trade Commission decision to keep the duties in place. 

She says Canada will fight the duties by every means available, including litigation through existing trade agreements, as well as the World Trade Organization and the U.S. Court of International Trade. 

Canada is “extremely disappointed” in the latest finding by the Commerce Department, she said. “This measure is entirely unwarranted.”

At the same time, she said, the federal government stands ready to negotiate a resolution to the dispute that has dogged the Canada-U. S. relationship for decades. 

“We will continue to work closely with provinces, territories and industry to defend Canadian interests through all available avenues,” Ng said. 

“We remain ready and willing to work with the United States toward a negotiated solution that allows for a return to predictable cross-border trade in softwood lumber.”

The B.C. government issued a similar statement Thursday, saying the Commerce Department decision is “deeply disappointing.” 

“The continued application of unjustified duties on B.C. softwood lumber exports to the U.S. is hurting Canadians and Americans alike,” said the joint statement attributed to Forests Minister Bruce Ralston, Jobs Minister Brenda Bailey, and several other officials.

“As we work with our industry partners to develop a dependable and sustainable forest industry in B.C., we are continually impeded by these tariffs, leading to higher prices and unstable markets on both sides of the border.”

The vice-president of the BC Lumber Trade Council, Kurt Niquidet, also responded to the potential hike in duties, saying the Commerce Department has “departed from certain long-standing methodologies at the urging of U.S. industry.”

“Although these rates are not yet finalized, they continue to misrepresent reality: B.C. and Canadian producers are not subsidized and are not dumping in the U.S. market,” the statement says.

It says the tariffs are increasing the cost of lumber and building materials south of the border, “at a time when the shortage of affordable housing is having a severe impact on families across the country.”

In October, Canada cheered a decision by a NAFTA dispute panel that found aspects of how the U.S. calculates the duties are inconsistent with federal law. 

Under the U.S. Tariff Act, the Department of Commerce determines whether goods are being sold at less than fair value or if they’re benefiting from subsidies provided by foreign governments.

In Canada, lumber-producing provinces set so-called stumpage fees for timber harvested from Crown land, a system that U.S. producers — forced to pay market rates — consider an unfair subsidy.

This report by The Canadian Press was first published Feb. 1, 2024.

The Canadian Press