Time will tell whether an $867 million support package for Canada’s forestry industry will help blunt the impact of American tariffs, according to Kootenay-Columbia MP Wayne Stetski.
The package, announced by Jim Carr, the federal Minster of Natural Resources, includes loans and guarantees to complement provincial efforts for Canadian companies who operate businesses pertaining to the softwood lumber industry.
“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 Carr, in a press release. “We are prepared to take further action, including additional loan guarantees, to address changing market conditions.”
The measures include expanding overseas markets and diversifying Canadian wood products and helping indigenous communities and organizations improve performance of their forest sector initiatives. Additional measures totalling $260 million include providing temporary extension of the maximum period for Work-Sharing agreements from 38 to 76 weeks to reduce layoffs and expanding supports to help workers upgrade their skills and transition to new opportunities.
Regionally, there are a number of businesses who are affected by the 20 per cent tariffs that the Americans slapped onto softwood lumber exports in April.
“I’m very pleased that the government has come out with this package,” said Stetski. “I do wish it had been earlier and that’s because every business needs to know the environment they’re working in and to plan ahead. “So it would have been nice to have this a while ago.
“What I’m going to do is wait a few weeks then start contacting mill owners and managers in the riding to see whether this package is actually accomplishing anything for them or not. I will then be letting government know both if it’s helping and also if it’s not helping.”
Breaking down the federal government’s support package — $500 million is going towards commercial financing and risk management solutions, while the Business Development Bank of Canada is providing $105 million in commercial financing in the short and medium term.
At the heart of the dispute is that the Americans allege that provincial stumpage fees constitute a subsidy and that certain funding programs provide subsidies for Canadian softwood lumber producers. The current softwood lumber agreement expired in 2015.
“In the interim, mill owners who are selling lumber across the border should be contacting the purchasers south of the border and getting them to put pressure on the Trump administration to come up with a fair deal,” Stetski said.
“Our understanding is that lumber mills in the United States cannot produce enough to keep up with the demand for construction,” said Stetski, “so both from a supply perspective, but also a price perspective — because every extra dollar in tariffs that goes on that lumber increases the cost of construction and housing in the USA — those who are currently benefitting from buying Canadian lumber on the American side should make sure their voices are heard loudly and strongly in Washington.”
Long term, Canada needs to negotiate a good and fair softwood lumber agreement that should be done separately from NAFTA renegotiations, because those talks could drag out over years, Stetski said.
“Canada also needs to be seeking out other markets around the world so that we aren’t as reliant as we are on getting this lumber into the United States, so long term thats the second thing that government needs to be doing,” he added.
BC Premier Christy Clark released a statement after the federal government announced the support package, noting that 60,00 people are employed in the industry in 140 communities across the province.
“While we continue to work with the federal government on pursuing a negotiated settlement with the U.S., we are still in the midst of litigation,” Clark said. “Every time these unfair allegations are tested in an impartial court, we have been successful, and we will be again.
“Unfortunately this process takes time and workers and communities may feel the impact. The $867 million will help strengthen the forest economy through expanded funding for marketing and innovation and provide support for workers, if needed.”