Canadian lumber industry looks forward to federal aid

VANCOUVER (Scrap Monster): The Cabinet will consider the federal government’s aid package for softwood lumber industry, aimed at lending a helping hand to the struggling sector. The US had recently imposed countervailing duties on softwood lumber imports from Canada. The package is expected to provide big relief to workers impacted by job losses on account of actions taken by forestry companies in order to counter hefty tariffs. The final package will be made public only after inputs from Cabinet members.

According to sources, the proposed aid package is likely to be around 1 billion dollars. The money will be utilized to fund innovative steps taken by companies to rise above from just being exporters of raw lumber. It aims to encourage companies to transition into other value-added products. In addition, the package is also likely to earmark money for rehabilitation and transition of affected workers and towards payment of their employment insurance (EI) benefits. Sources indicate that package will contain multiple options to the rescue of softwood lumber workers impacted by the recently announced American tariffs.

The Cabinet will also decide on whether the federal government should offer loan guarantees to help companies pay duties. It must be noted that provincial governments in Ontario and Quebec had earlier demanded setting up of a program to help companies offset the tariffs. Also, Provincial Chambers of Commerce, on behalf of the forestry companies, had sent an open letter to Prime Minister Justin Trudeau requesting federal support in its fight against duties.

Fears of job losses have already turned into reality with Resolute Forest Products (RFP) announcing cut in shifts at three of its sawmills in Quebec. In addition, the activities at another Quebec sawmill will be halted for a period of two weeks. Along with that, the company has also decided to delay the start of forest operations. These adjustments are likely to affect nearly 1,300 employees, RFP press release noted.

The imposition of combined duty of 27.22% in early 2000s by the US had resulted in almost 15,000 job losses in the B.C alone. Unifor, the major labor union which represents forestry workers fear that the duties announced recently is likely to hurt at least 25,000 jobs.

Meantime, forestry companies and provincial governments are reportedly increasing their focus on diversifying into other key markets including Asia. The B.C forestry industry and government officials had already visited countries including China, Japan and India in an attempt to find new markets for their produce so as to reduce over-dependency on the US market. In line with the federal government agenda to expand export markets beyond the US, Natural Resources Minister Jim Carr is about to visit China early next month.

On April 24^th, the US Department of Commerce had announced its decision to impose tariffs of up to 24% on Canadian softwood lumber. A duty of 24.12% has been applied to West Fraser, followed by Canfor (20.26%), Tolko (19.50%) and Resolute (12.82%). All other Canadian exporters are subject to 18.88% duties with the exception of J.D Irving whose duty is fixed at 3.02%. In addition, the US DOC had also noted that smaller companies are subject to retroactive duties for all shipments made during the past three months.