A B.C. pulp mill’s ability to provide critical material for COVID-19 personal protective equipment was a big step toward resolving forestry trade issues with the U.S., and the current lumber shortage pushing up house prices is the next step, Canada’s ambassador to the U.S. says.
Ambassador Kirsten Hillman spoke to the B.C. Council of Forest Industries convention Thursday, offering cautious optimism that the election of President Joe Biden on a promise of pandemic recovery and jobs represents a turning point in Canada’s 30-year dispute over softwood lumber. It hasn’t changed the insistence of the U.S. lumber industry that B.C. lumber is unfairly subsidized, but the pressure is on Biden to deliver on affordable housing and union jobs, she said.
Even before Biden replaced former president Donald Trump and his aggressive trade policies, the ability of Harmac Pacific’s Nanaimo pulp mill to provide key material to the U.S. in the early days of the pandemic got the attention of American leaders.
“The story of Harmac and the specific pulp product that it was providing to the United States was critical to certain masks and gowns and medical supplies,” Hillman said by video link from Washington D.C. April 8. “And we were able to talk to the Americans about how restricting trade and cutting supply chains between our two countries was going to in fact hurt them and hurt us both.”
Now a pressing issue for Biden is soaring lumber prices that are holding back his post-pandemic recovery plans. Supply shortages have pushed the average price of a new U.S. home by $24,000, and that has priced three million Americans out of the market, Hillman said. And there are “anecdotal reports” that U.S. builders are delaying projects from three to six months due to uncertain lumber supply as well as high prices.
COFI president Susan Yurkovich and other B.C. industry players have been involved for many years in trade disputes, with appeals currently in progress under NAFTA and new U.S.-Canada-Mexico trade agreements. Trump’s administration neutralized the NAFTA appeal process by refusing to appoint new members, and agreeing on impartial arbitrators will take time, Hillman cautioned.
Meanwhile, a World Trade Organization panel ruled in Canada’s favour in the long-running dispute, and the U.S. Commerce Department has reduced duties on Canadian lumber to about nine per cent on average, less than half of what was imposed on behalf American producers in the most recent trade action against Canada.
B.C. Forests Minister Katrine Conroy told the convention the high price of lumber has helped B.C. mills restart and recover from a slump in prices and log shortages, and B.C.’s efforts to promote mass timber technology are helping producers “get more from less” after a loss of allowable cut in the wake of widespread beetle epidemics.