FLETCHER: High-sticking by U.S. on trade is nothing new for us

Tom Fletcher grew up in the Peace River region and has covered B.C. politics and business as a journalist since 1984B.C.’s rookie forests minister had a strong case to make as he travelled to Sacramento last week to meet with California business and government representatives. The state lost more than 16,000 structures in the recent wildfires that raced through the Los Angeles area. B.C. Wildfire Service rapid attack and incident management teams were on the ground quickly to help as Pacific Palisades and other world-famous locations battled intense wind-driven flames. And California’s construction industry knows it will need B.C. and Alberta lumber for a rebuild that will take years. Alberta runs third among provinces supplying lumber to the U.S., behind Quebec and ahead of Ontario. B.C. is number one, with four billion board feet exported to the U.S. last year, despite border duties currently running at about 14%. Over decades of “anti-dumping” and countervailing duty attacks from the south, Ottawa has delegated much of the hard work to B.C. The U.S. lumber industry shakedown of Canada “has been going on longer than I’ve been alive,” Forests Minister Ravi Parmar told reporters in a Zoom call from outside the California legislature. It started in 1982, and it’s about to get a lot worse with Donald Trump’s threatened tariffs lumbered on top of it. The regular review by the U.S. Commerce Department is coming up in a couple of weeks, and the 14% rate is likely to go up, with any broader trade action on top of that. “We are predicting with a Trump tariff and increased duties, we could be dealing with 50-55% tariff and duty on softwood lumber leaving Canada and coming down here,” said Parmar, who was a school trustee up until last fall’s B.C. election. Hundreds of millions in border duties go into an account to pay off the U.S. industry for its claims of below-market timber sales from Crown land. B.C. set up a timber auction system to prove it’s not “dumping” wood on the U.S., international tribunals have rejected the U.S. industry claims, but not much has changed since a one-sided softwood lumber agreement expired in 2015. Trump’s tariffs would siphon off more hundreds of millions to the U.S. treasury, driving up housing costs that are already out of reach for many. Sales will continue, because Canada is the biggest source of U.S. lumber imports, providing 44% in 2023, and there is no alternative source with that kind of volume and proximity. Dan Dunmoyer, CEO of the California Building Industry Association, issued a joint statement with Parmar to emphasize that point. Parmar says U.S. insurance companies also confirmed to him that high-sticking Canada with more border fees for lumber will drive up costs for California fire claims and other new construction. A classic case for this dysfunctional relationship is Interfor Corp., which started with a single B.C. sawmill in the 1930s. It is now one of the biggest lumber producers in the world, with a strategy to respond to trade attacks by expanding U.S. production. It now operates sawmills in Washington, Oregon, Georgia, South Carolina, Arkansas, Alabama, Mississippi and Louisiana as well as in B.C. Interfor just announced its fourth quarter results for the end of 2024, a net loss of nearly $50 million, which is better than the third quarter when the loss was more than twice as much. Canadian forest companies shifting their investment to the U.S. involves other factors, such as pine beetle damage and governments restricting timber supply to satisfy often overblown environmental protests. But the effect is what Trump is after, moving jobs from Canada to the U.S. Parmar invited Trump to consider 2028, when Los Angeles is scheduled to host the Summer Olympics. It has a homeless crisis now that is similar to what Canadian cities are facing, and driving up the cost of housing even more can only make things worse. Will Trump listen? Will his advisors ever get through to him that this whole 40-year campaign against Canadian lumber is hurting people on both sides of the border? Don’t bet on it.Tom Fletcher grew up in the Peace River region and has covered B.C. politics and business as a journalist since 1984. tomfletcherbc@gmail.com X: @tomfletcherbc

FLETCHER: High-sticking by U.S. on trade is nothing new for us

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