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Current State Of The Softwood Lumber Dispute: All Bark And No Bite?

Posted by on January 9, 2018

As the softwood lumber dispute between Canada and the U.S. continues despite the angry rhetoric from both sides, it appears that the duties the U.S. Trade Commission applied to Canadian softwood lumber haven’t had a large effect. According to an article by CTV, softwood lumber remains at very high prices. In fact, even though exports from Canada to the U.S. have gone down by ~8%, the value of those shipments actually resulted in a 0.15% rise overall. The increase is even more pronounced in the Canadian provinces of Quebec (exports up 3%) and Ontario (exports up a whopping 11%).

Why? The reason seems to be “insatiable” demand from the U.S. housing sector which is building at a torrid pace. To the point that increases in lumber costs are passed on to the purchaser of the home but also American home-buyers are currently willing to absorb the increase…So far.

The worst hit; however, is the province of British Columbia who has seen exports drop by 33%. This is in addition to a terrible 2017 fire season which affected the total of harvestable timber. However, the news isn’t all bad, as exports from British Columbia to the rest of the world are up 67%. For the central Canadian provinces of Quebec and Ontario, lumber sales to the U.S. make up almost the entire timber production of those provinces (98 and 99 percent respectively). The core issue here has to do with dumping: American producers say Canadians are charged too small of a stumpage fee by the government to log Canadian land and in addition, Canadians sell lumber into the U.S. at artificially low prices.  Canadians have appealed these duties to both the NAFTA dispute panel and World Trade Organization. A verdict from the former is expected in the fall of 2018; however, a ruling by the WTO could take years.




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