Kootenay-Columbia MP Wayne Stetski is calling on the Liberal government to subsidize local mills in the event of an unfavourable softwood lumber agreement with the United States.
On Nov. 25 2016, the U.S. Lumber Coalition filed a petition with the U.S. Department of Commerce alleging Canadian lumber is being sold at below market prices in the United States.
In the latest round of the long-running softwood lumber dispute, it asked the government to protect American mills by imposing additional duties on Canadian lumber.
Stetski and the 13 other New Democrat MPs from British Columbia are concerned that the Liberal government does not have a Plan B in place in case the United States brings duties against Canadian products, they are calling for federal loan guarantees for softwood lumber producers.
“Will the federal government subsidize these mills in the form of low cost loans or no cost loans so they can keep operating until they find new markets if they’re no longer competitive going into the states?” he asked.
Stetski said he is mainly concerned for family owned mills in his riding, many of which sell most of their lumber to the United States. The larger lumber companies often have mills on both sides of the border, which makes them less susceptible to tariffs, he said.
“They’ll just increase what they’re producing from south of the border but that doesn’t help us,” he said.
“During the last softwood dispute we saw a lot of damage done by American duties all across our region,” he said. “We don’t want to see this repeated.”
Canada and the United States signed the Softwood Lumber Agreement (SLA) on September 12, 2006. It came into force in October of that year for an initial seven-year term.
The agreement saw the return of more than $5 billion in duty deposits by U.S. authorities to Canadian companies and maintained a stable trade environment for the softwood lumber industry. The SLA expired in October 2015.
“The federal government needs to get this agreement nailed down. The sooner the better,” said Stetski. “It’s uncertainty that kills you in the end. Once a decision is made, whether it’s a good one or a bad one, some of the tension goes away but right now some of the mills are sitting there uncertain of what they should do moving ahead so some of them are already starting to cut back on shifts and production.”
Last month the provinces of Ontario and Quebec both called on the federal government for loan guarantees to protect softwood lumber producers and jobs in forestry communities if the U.S. imposes new duties.
According to the B.C. Lumber Trade Council, the province is the largest Canadian exporter of softwood lumber to the U.S. and a major employer that provides about 145,000 direct and indirect jobs.