The Honourable Jim Carr, Minister of Natural Resources Canada, Remarks on the U.S. Department of Commerce’s preliminary decision to impose countervailing duties on Canadian softwood lumber from certain products

April 25, 2017

Ottawa, Ontario

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Thank you, and good afternoon everyone. 

As you know, the U.S. Department of Commerce has released its preliminary decision on countervailing duties on Canadian softwood lumber.

Lumber disputes have been the most significant trade irritant between the U.S. and Canada since before Confederation. 

In fact, between 1839 and 1842, Maine and New Brunswick nearly came to blows in what has been called the “Aroostock Lumber War,” when militias were mobilized on both sides of the now Maine/New Brunswick border to contest and defend lumber trade.  Thankfully even this dispute was resolved peacefully through dialogue. 

A succession of tariffs were imposed by the U.S. over the intervening years until the establishment of the International Trade Administration of the U.S. Commerce Department in 1980. 

In the contemporary era of lumber disputes there have been four “rounds,” generally dated as follows:

• 1981 Lumber I

• 1986 Lumber II

• 1996 Lumber III

• 2001 Lumber IV 

This present round is the fifth time Canada has had to defend its softwood lumber industry against U.S. claims over the last 30 years. Independent trade panels have repeatedly found these claims to be baseless. 

We have prevailed in the past and we will do so again. 

This time, the Commerce Department is imposing countervailing duties of 19.88 percent for most mills. 

Our government disagrees strongly with this decision. It is unfounded and we will vigorously fight for the interests of the Canadian softwood lumber industry, its workers and their communities. 

These unfair and punitive duties will negatively affect people’s jobs on both sides of the border and will, ultimately, increase costs for American families who want to build or renovate homes. 

For example, the U.S. National Association of Home Builders has calculated that a $1,000 increase in the cost of a new house in the U.S. would put home ownership beyond the reach of more than 150,000 American families, and jeopardize thousands of jobs in the American home construction industry. The same organization estimates that the lumber price increase in the first quarter of this year has added almost $3,600 to the price of a new home. 

Our forest industry sustains hundreds of thousands of good, middle-class jobs in communities across Canada. Many regions depend on its continued success. 

Our government is taking immediate action to help affected companies, workers, and local communities.  Now that the U.S. decision to impose preliminary countervailing duties has been confirmed, I am re-convening the Federal-Provincial Task Force on Softwood Lumber this week to examine next steps. 

That task force was formed to address the needs of forest workers and communities. The upcoming meeting will build on the progress we have made through this federal-provincial collaboration. 

Immediate action includes: 

•       Ensuring companies are aware of and have access to existing financing initiatives under the Business Development Bank of Canada and Export Development Canada, which offer a range of financial services to Canadian businesses on commercial terms, including loan guarantees. These initiatives are available to businesses of all sizes and can assist companies looking to make capital investments, expand market opportunities, and diversify with confidence into new markets. 

•       Promoting the use of Canadian wood right here at home. Budget 2017 provided $40 million for increasing wood use in Canada, allowing Canada to continue its world leadership in tall wood building development, partnering with industry and the provinces to build on successes such as the 18-storey University of British Columbia’s Brock Commons residence building, the tallest wood building in the world. 

•       Actively working to help the forestry industry to access new markets. International Trade Minister Francois-Philippe Champagne is currently with a delegation of Canadian lumber representatives in China, promoting Canadian products. Minister Jean-Yves Duclos is currently in the United Kingdom and Europe promoting Canadian wood. And I will travel to China in June with forestry leaders to build on this momentum. 

•       Employment and Social Development Canada stands ready to provide essential services to support any workers who may be negatively affected. This support includes Employment Insurance and career counselling, as well as retraining and skills development programs that are delivered at the provincial level. Currently, ESDC transfers nearly $3 billion annually to the provinces through Labour Market Transfer Agreements. An additional $2.7 billion over six years was announced in Budget 2017. 

•       Indigenous workers will have access to services through the Aboriginal Skills Employment and Training Strategy program. 

At the same time, we will continue to press our American counterparts to rescind this unfair and unwarranted trade action.  We are committed to working with the U.S. Administration to achieve a durable solution. 

Canada has put forward a number of reasonable proposals to the U.S. administration that are responsive to views expressed by U.S. industry.  These proposals ensure security of supply at fair prices to U.S. consumers and U.S. companies that rely on Canadian imports. 

We remain confident that a negotiated settlement is not only possible but in the best interests of both countries. 

I would now like to invite Minister Lebouthillier to say a few words.