U.S. Lumber Coalition: Cheap Canadian softwood imports harm domestic producers

The trade association on Tuesday told the International Trade Commission (ITC) its members are financially harmed by imports of Canadian softwood lumber, but Canada’s largest lumber producer begs to differ.    The U.S. Lumber Coalition, a trade association representing numerous sawmills and woodland operators throughout the country, told the International Trade Commission (ITC) on Tuesday that its members are financially harmed by imports of Canadian softwood lumber.
   “While Canadian producers enjoy massive government subsidies, their abuse of the U.S. trade laws results in lost profits, and lost ability to expand and grow production and jobs in the United States,” said coalition spokesman, Zoltan van Heyningen, in a statement related to the ITC hearing. “As long as Canadian producers continue to ignore U.S. trade laws to suppress prices and capture growth in the American market, the U.S. government must level the playing field for U.S. workers by enforcing our laws.”
   “The problem is simple, Canada’s provinces allow lumber companies to harvest trees from government timberlands at rock-bottom bargain rates,” Sen. Ron Wyden, D-Ore., told the ITC. “This incentivizes Canadian producers to cut more trees, to produce more lumber, and then to sell that lumber at cheap rates in the United States.”
   Wyden argued that “American lumber companies are some of the most efficient and competitive in the world. But over time these market-distorting Canadian practices have unfairly harmed U.S. producers and eroded their ability to compete. Subsidies artificially inflate Canadian company profits and insulate Canadian mills during market downturns.”
   Mark Feldinger, senior vice president of energy, environment, transportation and sourcing for Canfor Corp., said U.S. mills overstate the benefits of Canadian lumber mills being able to harvest timber from government lands. In fact, Canadian mills, particularly in British Columbia, have been forced to close in recent years due to lack of timber from the near 15-year-old outbreak of Mountain Pine Beetle which has destroyed millions of hectares of pine forest. 
   “Mill closures are a fact of life in BC and Alberta and a direct consequence of diminishing fiber supply,” he said. “I would add that during the Great Recession, the BC Interior curtailed more sawmill capacity and production than any other region in North America.”
   Feldinger noted that since 2006, Canfor has made significant investments in lumber mill operations in the U.S. Southeast where it now operates 11 sawmills which employ 1,345 U.S. workers, while Canadian mills faced closures. 
   “Frankly, I don’t know how my colleagues testifying earlier today who produce SYP (southern yellow pine) can possibly claim that they are injured at all given the current operating profits that we and they are making, or that they somehow lack the cash flow to make additional investments,” Feldinger said. “That certainly is not our experience. Our management is extremely pleased with the results from Canfor’s U.S. operations, which have far outperformed our Canadian operations over the past few years because of lower cost of timber in the South and because U.S. mills are closer to the U.S. market.”
   The United States and Canada are attempting to reach a new softwood lumber trade agreement that works for the industry on both sides of the border.
   “Any new agreement must offset the harmful effects of subsidized Canadian lumber being dumped in the U.S. market. A successful trade deal with a clean quota will give the U.S. industry the opportunity to invest and grow, allowing us to compete on a level playing field with the Canadian industry,” van Heyningen said.  
   In April, the Commerce Department ruled that Canada subsidizes softwood lumber production, resulting in harm to the U.S. lumber industry. The department followed in June with another ruling that Canadian exports of softwood lumber are sold in the United States at less than fair value. 
   The decades-old U.S.-Canada lumber trade spat has also been a point of tension during the current North American Free Trade Agreement renegotiation rounds.