B.C. Forests MInister Doug Donaldson (right side centre) meets with housing ministry officials in Jiangsu province, China, Nov. 15, 2017. The complexities of Asia trade and continued attacks from U.S. lumber producers have spurred B.C. to open a network of Asia trade offices. (B.C. government photo)

B.C. Forests MInister Doug Donaldson (right side centre) meets with housing ministry officials in Jiangsu province, China, Nov. 15, 2017. The complexities of Asia trade and continued attacks from U.S. lumber producers have spurred B.C. to open a network of Asia trade offices. (B.C. government photo)

Donald Trump’s trade wars hit B.C.’s struggling forest industry

World Trade Organization can’t rule on softwood lumber tariffs

The U.S. government and industry’s trade attack on B.C.’s lumber industry is now nearly four decades old, and prospects are dim that the current round of punitive duties may be overruled by the World Trade Organization.

Even as Canada, the U.S. and Mexico celebrate an updated North American free trade deal, it still doesn’t include softwood lumber. And one of U.S. President Donald Trump’s tactics has been to block the appointment of WTO appeal judges, leaving the appeal panel without a quorum to review the current heavy border tariffs on Canadian lumber as the current terms expired at the end of 2019.

Trump and U.S. Trade Representative Robert Lighthizer have rejected the WTO’s dispute settlement system as unfair to the U.S. Lighthizer told the U.S. Senate finance committee in March 2019 that blocking appointments is the only way he has to force reforms to the WTO, as the Trump administration works toward trade deals with China and its North American partners.

RELATED: Canada signs new NAFTA deal with U.S., Mexico

RELATED: Laid-off forest workers descend on B.C. legislature

RELATED: B.C. to ‘embed’ Asia trade offices in Canadian embassies

The duties continue to be applied as North American lumber prices have slumped over the past year, and market conditions and cutting restrictions have led to a wave of shutdowns across the B.C. forest industry.

B.C. Forests Minister Doug Donaldson recently returned from the latest industry trade mission to Asia, where Chinese demand is also in decline after a peak in 2013 that saw it briefly overtake the U.S. as the top customer for B.C. lumber in B.C.

B.C. continues its efforts to market timber and wood construction across Asia, where Japan is its longest-standing customer and some gains have been seen in Korea, India, Singapore and Malaysia. B.C.’s network of trade offices, which has focused heavily on forest products to reduce dependency on the U.S. market, have been ordered closed, with staff transferred to Canadian embassies and consulates in the region.

As 2020 dawns, the province has also drastically reduced its stumpage rate for Crown timber, after B.C. producers protested that the system wasn’t responding fast enough to the 2019 decline in prices. Provincial stumpage fees for cutting coastal Crown land timber ard reduced to $8.82 per cubic metre as of Jan. 1, in the latest quarterly adjustment. Stumpage reached a high of $18.73 in January 2019.

The WTO has ruled in Canada’s favour in previous rounds, on U.S. claims that buying Crown-owned timber represents an unfair subsidy to Canadian construction materials. The first round was in 1982, and the fifth remains in place at the start of 2020, with the U.S. Department of Commerce imposing countervailing and “anti-dumping” duties across Canada.

The heaviest import duties fall on B.C.-based companies, with West Fraser facing a total of more than 23 per cent. Tolko is penalized 22 per cent and Canfor duties total more than 20 per cent, combining countervailing and anti-dumping penalties.

Quebec-based Resolute is being assessed a roughly 18 per cent duty, and New Brunswick-based Irving is paying just under 10 per cent, based on the U.S. assessment of their log costs.

On the B.C. coast, Mosaic Forest Management laid off about 2,000 union and non-union employees as well as coastal logging contractors at the end of November, beginning its seasonal shutdown early due to what the company termed “very challenging pricing and market conditions.” Mosaic is a partnership of Island Timberlands and Timberwest, which along with Western Forest Products represents most of the lumber industry on Vancouver Island and the adjacent coast.

Western has been shut down for six months by striking United Steelworkers members, forcing logging contractors off the job. Premier John Horgan has promised aid for contractors, who are losing their homes and equipment.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Crews disassemble the iconic red and white KFC bucket from a sign on Goldstream Avenue. (Photo courtesy of Mark Schoor)
Iconic KFC bucket removed from Goldstream Avenue

Popular fast-food chain closes Langford location

One person is dead after a camper van caught fire Thursday morning in Victoria's Beacon Hill Park. (Nina Grossman/News Staff)
UPDATED: One person dead after vehicle fire in Beacon Hill Park

Investigation into Victoria death in early stages

Darcy Rhodes (left) says his grandfather’s bonsai trees are his ‘babies.’ (Courtesy of Tamara Bond)
A recently finished $4.3-million taxiway extension at the Victoria International Airport (not pictured) is unusable because of a blind spot. (Black Press Media file photo)
Blind spot leaves Victoria airport’s new $4.3-million taxiway extension unusable

Solution has been put on hold by COVID-19 pandemic, says airport authority

Victoria police are searching for a federal offender who is wanted Canada-wide after his statutory release was suspended. (Courtesy of Victoria Police Department)
Victoria police searching for federal offender wanted Canada-wide

Warrant issued after offender’s statutory release suspended

Health Minister Adrian Dix looks on as Dr. Bonnie Henry pauses for a moment as she gives her daily media briefing regarding COVID-19 for British Columbia in Victoria, B.C. THE CANADIAN PRESS/Jonathan Hayward
7 additional deaths and 542 new COVID-19 cases in B.C.

Provincial health officials reported 18 new COVID-19 cases linked to variants of concern

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of March 2

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

(Black Press Media file photo)
POLL: How’s your butter?

Recent reports have some Canadians giving a second look to one of… Continue reading

Grand Forks’ Gary Smith stands in front of his Church of the Flying Spaghetti Monster float. Photo: Submitted
Grand Forks’ Flying Spaghetti Monster leader still boiling over driver’s licence photo

Gary Smith, head of the Church of the Flying Spaghetti Monster of B.C., said he has since spoken to lawyers

A Cowichan Valley mom is wondering why masks haven’t been mandated for elementary schools. (Metro Creative photo)
B.C. mom frustrated by lack of mask mandate for elementary students

“Do we want to wait until we end up like Fraser Health?”

(Pxhere)
B.C. research reveals how pandemic has changed attitudes towards sex, health services

CDC survey shows that 35 per cent of people were worried about being judged

Some Canadians are finding butter harder than usual, resulting in an avalanche of social media controversy around #buttergate. (Brett Williams/The Observer)
#Buttergate: Concerns around hard butter hit small B.C. towns and beyond

Canadians find their butter was getting harder, blame palm oil in part one of this series

Construction takes place on Bamfield Main in early February 2021. (PHOTO COURTESY CTV NEWS)
Ongoing Bamfield roadwork unrelated to planned $30M fix

Construction by Mosaic unrelated to $30M upgrade ordered in wake of fatal bus crash

The Regional District of Nanaimo’s board is forwarding a motion on illegal dumping to the Association of Vancouver Island and Coastal Communities’ upcoming annual general meeting. (Kane Blake photo)
Island communities asked to join forces in seeking help fighting illegal dumping

RDN resolution to be forwarded to Association of Vancouver Island and Coastal Communities

Most Read