The federal government’s latest assistance package for the forest industry is designed not to generate further complaints about subsidies after the U.S. imposed border duties averaging 20 per cent on Canadian lumber exports, federal officials say.
The $867 million package includes loans and loan guarantees as well as extensions of federal work sharing programs to preserve employment, Natural Resources Minister Jim Carr said.
Carr, Foreign Affairs Minister Chrystia Freeland and International Trade Minister Francois-Phillippe Champagne announced the assistance in Ottawa Thursday.
It includes federal loans and loan guarantees of up to $500 million to assist viable forest industry companies, with $105 million in commercial financing from the Business Development Bank of Canada.
Another $260 million is provided for temporary extension of work-sharing agreements from 38 to 76 weeks to reduce layoffs, expand support for skills upgrading for affected forest industry workers, and to help indigenous communities improve performance of their forest operations.
“This action plan delivers on our pledge to take swift and reasonable action to defend our softwood lumber industry and charts a stronger future for the workers, families and communities that depend on it,” Carr said. “We are prepared to take further action, including additional loan guarantees, to address changing market conditions.”
Susan Yurkovich, president of the B.C. Lumber Trade Council, praised the federal assistance package.
“This package is a prudent response that can provide both immediate support for workers and communities if required, along with enabling additional investments in longer-term opportunities for the sector,” Yurkovich said. “We particularly appreciate the investment in expanding markets for Canada’s high-quality forest products overseas, which will help to further diversify our markets.”
The U.S. Commerce Department is upholding a U.S. industry complaint, for the fifth time in the past 30 years, that Canadian lumber is subsidized by timber cutting rates charged by provinces on Crown land. The latest complaint also accuses Canadian producers of “dumping” lumber in the U.S. market at artificially low prices.
Carr and Champagne said the loans will be made at commercial rates and do not constitute a subsidy. They are designed to complement provincial programs in provinces such as B.C., the source of about half of all Canadian lumber exports to the U.S.
During the B.C. election campaign, Premier Christy Clark promised that the province would buy lumber from B.C. producers and stockpile it for building projects around the province, to help the industry through the latest dispute. That proposal is in limbo as the NDP and B.C. Green parties look to topple the B.C. Liberal government this month.
NDP leader John Horgan said as premier he would personally go to Washington D.C. to represent B.C.’s interest, but he has confidence in former federal minister and industry executive David Emerson, retained by the B.C. Liberal government to represent B.C. in lumber talks.
With the U.S. also preparing to open up the North American Free Trade Agreement, Freeland said softwood lumber has historically been dealt with outside NAFTA. The broader trade negotiations don’t begin until mid-August.
Discussions with U.S. trade officials on softwood lumber are ongoing and recent discussions between Prime Minister Justin Trudeau and U.S. President Donald Trump on trade in general have been positive, Freeland said.