Last week’s latest collapse in the softwood lumber negotiations between Canada and the U.S. is not good news for the Canadian lumber industry. But it’s still business as usual at local lumber producer Vanderwell Contractors.
“We’re sitting on a little more inventory than we’d like,” says Ken Vanderwell. “But we’re still selling. We’re not planning any shutdowns or layoffs.”
Vanderwell’s, along with their colleagues in the industry, were cheered by news last month of a possible agreement between the two nations on sales of Canadian lumber in the U.S. But the proposal fell through – apparently when Canada balked at new demands by the group representing the U.S. lumber industry.
According to Vanderwell, the proposed agreement was another temporary quota system that would allow Canadian producers “a percentage of the U.S. market – something like 34 per cent."
That would have been a lot better than the current tariff/penalty combination that runs in the 27 per cent range, but not the long-term solution both countries are hoping for. That will require a change in government policies that may take years to achieve. In the meantime, the quota system could at least get things back to near where they were before the current crisis, and remove the punishing countervail duties and anti-dumping penalties that companies must pay on wood they ship over the border.
But according to Alberta Softwood Lumber Trade Council Chair Trevor Wakelin, the Coalition for Fair Lumber Imports is asking too much.
“In spite of the fact they say they want to bring this to a conclusion, whenever anything comes on the table they don’t accept it,” he says. “Canada has compromised enough already.” Meanwhile, that 27 per cent charge takes quite a bite out of Vanderwell’s profits on any lumber shipped over the border. But Ken Vanderwell says the company is still able to avoid operating at a loss, and therefore keeps producing and keeping local people in work.
More than some other mills, “we can react quickly to market conditions to keep our costs down,” he says.
One of the positive factors in keeping receipts higher than costs is the supplementary income the mill earns on products such as wood chips, shavings and sawdust pellets.
In the past year Vanderwell’s sold 75 train carloads of pellets to a Danish company and is sending chips to a Thunder Bay, Ontario pulp mill that pays significantly more than Alberta mills offer for the product. The company is also manufacturing wood pellet-burning stoves at its new factory/warehouse west of Edmonton.
“We have orders for enough stoves and pellets for nine months production,” says Vanderwell.

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