A local forestry company is cutting production as the United States prepares to charge additional duties on softwood lumber exports.
“Half of our operation is shut down right now and we’ve got about eight guys laid off,” said Jay Nelson, who is in charge of purchasing and personnel at Galloway Lumber Company. “It’s an incredible hit to a company our size.”
Galloway, which has less than 50 employees, has shut down its planing mill that takes cut boards and turns them into finished dimensional lumber. Their sawmill is working at well below capacity.
“Our guys are frustrated,” said Jay. “It puts an incredible pressure on the company when our ability to make a product is restricted. This is an unnecessary burden put on the company and on the working people.”
Galloway has turned to producing rig matting, which is used by the domestic oil and gas industry to support construction equipment. It can also be used as a structural roadway to provide passage over unstable ground.
“That’s something we’re able to tap in the Canadian market, which is keeping us going,” he said.
On April 24, the U.S. Department of Commerce imposed duties on Canadian lumber imports in efforts to protect American producers from what it views as unfair subsidies.
Smaller companies like Galloway are being billed on about 20 per cent of all products exported to the U.S. since Feb. 1.
In addition to that, a second set of U.S. duties was imposed on Monday. The BC Lumber Trade Council announced that the preliminary anti-dumping duties imposed by the U.S. are 7.72 per cent for Canfor, 4.59 per cent for Resolute, 7.53 per cent for Tolko, 6.76 per cent for West Fraser and 6.87 per cent for all other companies, including Galloway.
These anti-dumping duties are in addition to the preliminary countervailing duties imposed in April which ranged from 26.75 per cent to 30.88 per cent for B.C. producers.
Charles (Bud) Nelson, president of Galloway Lumber, said this is damaging to his company as over 90 per cent of their product was being exported to the U.S. before the duties were imposed.
“We’re sending a lot less now,” he said.
United Steelworkers Local 1-405 representative Don Wheaton said the employees at Galloway Lumber are worried about their jobs.
“We’ve got to hope for a fair and equal settlement to the whole process and get this thing put to rest so we can have some stability,” he said.
On a recent visit to the Galloway mill, BC NDP leader John Horgan said the issue is critical to the region.
“I’m excited about the fact that this mill is still going,” he said. “Even though we’ve got a massive softwood lumber fight ahead of us what we need in my view is political leadership. We’ve known for two years that the deal was going to expire.”
Horgan said the consequences for small players like Galloway would be significant and that he wanted to hear directly from small operators about their challenges.
Horgan could become B.C.’s next premier if the New Democrats and the Greens manage to oust the Liberal minority government.
“We have this debate every 20 years with the Americans and we go to a court and we win and we’ll win again,” he said. “But the challenge for small operators like Galloway and others across B.C. is that they don’t have the cashflow or the secure markets to sustain a long drawn out debate.”
“We want to get a deal as quickly as possible to protect workers and ensure companies like this can keep going,” he added.
The small community of Galloway is located between Elko and Jaffray, and has been a mill town since the 1920s.
Since 1982, there have been five softwood lumber disputes, which have resulted in three trade agreements. The last agreement came into effect in 2006 and expired in 2015. Under the terms of the agreement, the U.S. was barred from launching trade action against Canada for a period of one year after expiry.
According to the BC Lumber Trade Council, the province is the largest Canadian exporter of softwood lumber to the U.S. and the forest industry supports approximately 145,000 direct and indirect jobs in the province.