Good news for Canadian softwood lumber exporters arrived last week. According to a news release from the Government of Alberta, “The U.S. Department of Commerce has signalled a significant reduction to tariff rates for forestry companies that were included in the first administrative review.”
What’s proposed in that review by the U.S. Department of Commerce is a more than 50 per cent reduction in the roughly 20 per cent tariff companies such as Vanderwell Contractors of Slave Lake have to pay on lumber they ship into the States. The proposed new set of rates are not legally binding, though, as they amount to a “preliminary ruling.”
From what we’ve heard, it should go into effect in June, but could be delayed by a couple of months. It would be good for a year, when another review of the situation would be carried out.
Here’s what Alberta’s Minister of Agriculture and Forestry Devin Dreeshen had to say about it: “This is good news for Alberta. I’m pleased that preliminary indications show the U.S. lowering tariffs for Alberta and Canadian producers. Alberta’s government will continue to defend its forestry sector in litigation and appeals under the North American Free Trade Agreement and World Trade Organization appeal processes. Reducing tariffs will increase the efficiency and economic output of our mills.”
Minister of Economic Development, Trade and Tourism, (the aptly named) Tanya Fir, says, “We are encouraged by this week’s preliminary determination, but recognize there are still several steps ahead. That’s why we cannot lose sight of our ultimate goal to ensure Canadian softwood lumber is treated fairly and shown to create benefits on both sides of the border. Alberta will continue to support Canada in its ongoing efforts to push for the free flow of trade to ensure prosperity for both nations, and for Alberta’s forest industry.”
The proposed tariff reductions differ by large producer. The ones named in the release are as follows, and the numbers are for only for the years 2017 and 2018. What that means for last year or the current year is not explained: Canfor: 4.95 per cent (2017), 4.63 per cent (2018), West Fraser: 8.64 per cent (2017), 9.08 per cent (2018), Resolute: 16.3 4 per cent (2017), 15.84 per cent (2018), JD Irving: 5.13 per cent (2017), 4.32 per cent (2018) and all others: 8.37 per cent (2017), 8.21 (2018).
Resolute Forest Products operates largely in Quebec and Ontario. Irving is big in New Brunswick. West Fraser has mills in Alberta and B.C., as does Canfor. The ones not named likely fall into the ‘all others’ category, at about a 12 per cent reduction in tariffs.