Ontario’s federal and provincial members of parliament have expressed their disappointment after the United States increased the tariffs on Canadian softwood lumber.
Last week, US President Joe Biden announced they will be hiking the duty to 17.9 per cent, from companies that are subject to a second administrative review. The current “all others” rate for most companies is 8.99 per cent.
The increase was the result of the U.S. Department of Commerce second administrative review of its anti-dumping and countervailing duty orders regarding certain Canadian softwood lumber products.
Kenora MP, Eric Melillo was fighting for the Northwestern Ontario forestry sector on Friday at Question Period at the House of Commons in Ottawa.
“It’s either the Prime Minister doesn’t care to stand up for Canadian workers or he’s incapable of delivering results. The government has said that they have raised this issue with the US administration so why isn’t the president taking them seriously,” said Melillo.
In Ontario 66 per cent of the province is forest (71.1 million hectares), and represents 20 per cent of Canada’s forests.
According to 2020 statistics provided by statista.com of employees in the forestry and logging industry, Ontario ranks third with roughly around 8,500 employees behind Quebec and British Columbia.
Greg Rickford, Kenora-Rainy River MPP shared his disbelief on the tariff hike by the U.S. President.
“This guy, he is proving to be a wolf in sheep's clothing, there’s nothing he won’t do to protect the United States. He wants to shut down pipelines, he wants to throw tariffs on lumber outside of the agreement that we have. He’s now trying to box us out on critical minerals as they relate to electric vehicles. This is the type of stuff we're up against,” explained Rickford.
The Canada-U.S. softwood lumber dispute has been ongoing since 1982 and is one of the most enduring trade disputes between the two nations.
The reasoning behind the dispute is the U.S. believes it’s unfair that the Canadian lumber industry is subsidized by both federal and provincial governments.
In 2006 though, the Softwood Lumber Agreement came into effect to end the dispute. The agreement would last anywhere between seven and nine years. In 2012, both countries approved a two-year extension, where the United States would lift countervailing and ant-dumping duties provided lumber prices stay above a certain range.
Mary Ng, Minister of International Trade, Export Promotion, Small Business, and Economic Development released a statement with her disappointment from the tariff increase.
“Canada’s softwood lumber industry is an economic anchor for communities across the country and a key component of Canada’s forestry sector, which contributed more than $25 billion to the country’s GDP in 2020 and employed nearly 185,000 workers. The United States has long relied on Canadian lumber products to meet its domestic needs for high-quality building materials,” she said.
“These unjustified duties harm Canadian communities, businesses, and workers. They are also a tax on U.S. consumers, raising the costs of housing, renovations, and rentals at a time when housing affordability is already a significant concern for many,” she added.
In 2019, Canada exported $8.0 billion worth of softwood lumber and is one the largest forest product exporters to countries around the world. The U.S. is the largest single buyer of it.