Ottawa is providing some relief to companies being hit by softwood lumber tariffs.
The federal government is providing $867 million in measures to support forest industry workers and communities affected by U.S. measures targeting softwood lumber.
This includes federal loans and loan guarantees to complement provincial efforts for viable Canadian companies. Export Development Canada (EDC) will make commercial financing and risk management solutions — including loans and loan guarantees — valued at up to $500 million available to assist viable forestry companies. The Business Development Bank of Canada (BDC) will make $105 million in commercial financing available to help eligible forestry companies in the short and medium term. Funding for further loan guarantees may be considered by the Government in the future to address changing market conditions.
“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,” said Natural Resources Minister Jim Carr, in a press release. “We are prepared to take further action, including additional loan guarantees, to address changing market conditions.”
The government’s support also includes investments to diversify forest products and markets, to increase the industry’s resilience to these unfair trade actions and promote its long-term health.
Additional measures announced today include more than $260 million in new funding to:
- support efforts to expand overseas markets and promote the diversification of Canadian wood products beyond those targeted by U.S. duties on softwood lumber;
- help Indigenous communities and organizations improve the performance of their forest sector initiatives;
- provide a temporary extension of the maximum period for Work-Sharing agreements from 38 to 76 weeks in order to reduce layoffs; and
- expand supports to help affected workers upgrade their skills and transition to new opportunities.
Federal cabinet ministers have recently travelled to the U.K., continental Europe and Asia, including China, to promote these measures and Carr will travel to China with a delegation of Canadian forest industry representatives in early June.
These actions defend the interests of Canadians against the U.S. Department of Commerce’s imposition of countervailing duties on Canadian softwood lumber and build upon recent efforts made to ensure the continued growth and vibrancy of this sector, said Carr.
He said Ottawa is confident that a negotiated settlement is not only possible, but in the best interests of both countries.
The BC Lumber Trade Council (BCLTC) welcomes the federal assistance.
“B.C. lumber producers welcome the announcement today of measures to support forestry workers and communities during this trade dispute, as well as promoting forest sector diversification, overseas marketing and innovation,” said Susan Yurkovich, President of the BC Lumber Trade Council. “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. 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 BC Lumber Trade Council continues to believe that reaching a new agreement is in the best interests of producers and consumers on both sides of the border, she said.
“However, in the absence of an agreement, we will continue to work alongside the provincial and federal governments to vigorously defend our industry,” she said. “With government and industry standing together, we know we will be successful as we have in the past.”
B.C. is the largest producer of softwood lumber and represents about 50 per cent of Canadian exports to the U.S. The B.C. forest industry is the cornerstone of the provincial economy, and supports approximately 145,000 direct and indirect jobs in the province. The BC Lumber Trade Council is the voice on trade matters for companies in British Columbia representing the majority of B.C. lumber production.
The package is also being welcomed by forest unions.
The Chair of the United Steelworkers Wood Council, representing thousands of workers in the forest sector, said the help is the right thing to do, but not the only thing.
“These measures must be made effective immediately and must not be seen as subsidies to industry,” said USW Wood Council Chair Bob Matters. “This must be about protecting the viability of communities and the workers who depend on forestry, a cornerstone of the Canadian economy in a globalized world. Long-term stability is key.”
Matters said loans and loan guarantees are for forestry companies to allow them to pay tariffs without having to use their operating funds.
“It means employers can operate normally until a resolution is found between our governments on a truly fair softwood lumber agreement,” he said. “We hope that this will help to stop the current layoffs and prevent further layoffs over the next few months.”
USW Canadian National Director Ken Neumann said market transition funds of $160 million are essential to help workers during uncertain times, as communities wait for further announcements and changes to tariffs.
“Workers should not be made the victims of the failure of governments to reach a deal that is fair and just,” Neumann said. “Our members have been the first to pay the price for an unnecessary trade battle.”
He said the announcement of $9.5 million in Employment Insurance support will be used to help workers who are struggling now.
However, Matters and Neumann said the provisions announced today will support forest-dependent communities in the short term.
“We need long-term commitments to workers and families, alongside a sustainable industry,” Neumann said.
“Today the federal government has shown real leadership in protecting good resource jobs,” said Jerry Dias, Unifor National President. “This is welcome news for dozens of communities that are already feeling the pain of unfair trade sanctions.”
The U.S. government’s re-introduction of duties on Canadian softwood exports threatens tens of thousands of Canadian jobs and could cost the industry billions, he said. Unifor has been lobbying the federal government to take action to support forestry communities in hopes of mitigating the effect of anticipated job losses as duties are imposed and until a new agreement is negotiated.
U.S. industry claims that Canadian lumber is unfairly subsidized have proven to be unfounded in past, including by international trade tribunals.
The union welcomes today’s federal assistance measures, but cautions that the softwood lumber trade dispute is far from over.
“We continue to press the federal governments of both Canada and the U.S. to negotiate a fair deal,” said Scott Doherty, Executive Assistant to the Unifor National President. “Today’s announcement is good progress and we’re optimistic that the federal government can add to this relief program as time goes on.”
The U.S. has already signalled that anti-dumping duties on Canadian softwood exports could be added in June 2017 to compound the countervailing duties.