By Canadian Press

Trade minister cites housing shortage as cause for ceasefire in U.S. softwood spat

Jan 17, 2024 | 4:07 PM

WASHINGTON — Canada’s international trade minister says the great North American softwood lumber standoff is putting a drag on the continent’s already tight housing supply. 

Mary Ng says Ottawa will contest the U.S. International Trade Commission’s latest decision to maintain “unjustified” duties on imports of Canadian softwood. 

The commission ruled late last month that lifting the duties would result in what it calls “material injury” to the U.S. forestry industry. 

Ng says maintaining the duties makes no sense at a time when both Canada and the U.S. are struggling with housing affordability and supply. 

She says the challenge will be filed under the dispute resolution procedures contained in the U.S.-Mexico-Canada Agreement, known north of the border as CUSMA. 

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Global Affairs Canada says the decision to challenge the finding was made in consultation with affected provinces, stakeholders and industry leaders. 

“Canada is disappointed that the United States continues to impose unwarranted and unjust duties on Canadian softwood lumber products,” Ng said in a statement. 

“These duties impact our innovative Canadian softwood industry. And with the significant current challenges in housing supply and affordability, these duties also harm U.S. consumers and businesses that need Canadian lumber.”

The commission’s decision, effective Dec. 28, said lifting the duties “would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.” 

It was part of a “sunset review,” a recurring five-year procedure to re-examine the justification for duty orders as required by federal law.  

In October, Canada cheered a decision by a NAFTA dispute panel that found aspects of how the U.S. calculates softwood lumber duties that are inconsistent with federal law. 

Under the U.S. Tariff Act, the Department of Commerce determines whether goods are being sold at less than fair value or if they’re benefiting from subsidies provided from foreign governments.

In Canada, lumber-producing provinces set so-called stumpage fees for timber harvested from Crown land, a system that U.S. producers — forced to pay market rates — consider an unfair subsidy.

“At every opportunity, we continue to raise the issue of unjustified U.S. duties on Canadian softwood lumber and underline the need to find an acceptable resolution of this dispute that works for our two countries and their businesses,” Ng said.

“Canada remains ready and willing to discuss a resolution that provides the stability and predictability the sector needs to ensure its continued growth and success.”

This report by The Canadian Press was first published Jan. 17, 2024.

James McCarten, The Canadian Press