When the U.S. Department of Commerce announced softwood lumber tariffs last week, it sent shockwaves through many B.C. forestry-based communities.
While U.S. machinations do impact our community, for the most part, Squamish has dodged the worst of it.
“Although the current dispute is an evolving picture, with more duties and further decisions on exclusions yet to come from U.S. authorities, the Squamish area industry is not seriously affected – by comparison with the past,” said Squamish’s Eric Andersen of the Squamish and District Forestry Association.
Our local logging industry, like the rest of the B.C. coast, is more dependent on East Asia – Japan, China, Korea – for its sales.
In B.C. there are effectively two forest industries: coastal and interior.
In interior communities, such as Williams Lake, the impact has been much greater. It’s more reliant on the U.S. market and is more the target of the U.S. protectionist lobby.
Lumber mills in Williams Lake now have to pay between 19.5 per cent and the maximum 24.12 per cent tax, according to an article in The Williams Lake Tribune.
The coastal industry works with a different species mix, wood product end uses and markets than the interior, Andersen said.
Sea to Sky Corridor sales to the U.S. are based on appearance grade lumber and cedar.
AJ Forest Products in the Squamish Valley has been manufacturing B.C.’s Western Red Cedar lumber since 1974 and currently has 30 employees.
Western Red Cedar is a specialized product that previously had a small tariff, Todd Kion, the company’s general manager, told The Chief.
“With the current announcement, all U.S. bound cedar is now subject to a substantial tax that will be harmful to AJ Forest Products and the community of Squamish,” Kion said. “Cedar has been caught in the overall legal action by the U.S. We hope this will change with the next set of negotiations.”
Kion added that consumers won’t want to absorb the 19.8 per cent tariff the U.S. will impose on AJ. Added to the possible 10 per cent anti dumping duty that may be announced in a U.S. ruling expected June 23, it is a big hit to the bottom line of any company, Kion said.
The softwood lumber trade dispute is one of the longest and testiest in the trade relationships between Canada and the U.S.
It began in the 1800s, and currently about 80 per cent of timber logged in Canada is slated for export, according to A&A, a broker of softwood lumber since 1996.
Softwood lumber disputes contributed to Squamish’s Interfor sawmill closing in 2004. It was a major local employer at the time.
“There are all kinds of spillover effects within the industry,” Andersen noted. “Huge legal costs to industry and government, and effects on investment in the industry generally.”
Mayor Patricia Heintzman concurred that the dispute is an issue of concern for this community and the province.
“It is hard when you have one partner in the United States coming out and indiscriminately, without really any preparation or consultation, make a pretty one-sided decision,” she said.
For its part, the U.S. has long argued that Canada’s lumber industry is unfairly subsidized because of its access to Crown – public – land. Prime Minister Justin Trudeau has said Canada may take trade action against the U.S. if that country continues to target the Canadian forestry.