Softwood lumber tariffs won’t hurt local mill too much

Joe McWilliams
Lakeside Leader

High prices and good times for the Canadian lumber industry was probably too good to last and last week it did end, or at least slowed down. Not because of a lack of demand or low prices, but by the U.S. government sharply raising the tariffs on softwood lumber going across the border.

But to the good news.

“Business as usual,” says the general manager of local lumber producer Vanderwell Contractors. “We continue to be able to sell all our lumber, and prices are actually still pretty good.”

Interestingly enough, the producer isn’t necessarily taking the brunt of the higher cost of shipping south. How it works, Vanderwell explains, is the mill sells to a broker. It’s up to him to decide whether he ships to the States, sells it here at home, or goes to overseas markets, where there aren’t tariffs. The broker who does ship over the border may try to renegotiate the price he pays to the mill, but the mill also has options when it comes to choosing brokers.

So the bottom line for now, Vanderwell says – minimal impact on the bottom line and continued production per recent output.

It was just a year ago that the U.S. dropped its earlier round of tariffs on softwood lumber. It’s kind of a game – one involving a lot of money and a lot of politics, that may (or may not) result in another agreement on softwood lumber. One of the clauses of that agreement will likely be (as it has been) what to do with the billions of dollars skimmed off in tariffs by the U.S. government and held. Vanderwell says the coalition of lumber producers in the U.S. is “quite giddy” with the prospect of getting its hands on some of it. Some may have to be returned to Canada, (as has happened before) but it won’t be coming back to the producers. That’s considered a subsidy, Vanderwell says.

The provincial government is none too happy with the tariff news.

“Plain and simple, higher tariffs for our forest companies is unacceptable,” said Minister of Agriculture, Forestry and Rural Economic Development Nate Horner in a Nov. 24 news release. He vowed Alberta’s support for the federal government’s efforts to promote free (or freer) trade between the two nations.

Canada has won these disputes in the past. But the U.S. Commerce Department, apparently responding to complaints from U.S. lumber producers, tends to go right back to what it was doing before – punishing Canadian exporters of softwood lumber.

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