Canada’s lumber producers should be a happy lot. The U.S. housing market is coming back, exports are rising and the Canadian dollar is cheap. But the industry has a wary eye on its own version of the doomsday clock – the countdown to the Oct. 12 expiry of a long truce in the Canada-U.S. lumber wars. A date that seemed far off when the deal was struck in 2006 is now just a couple of seasons away.
Under the deal, Canada is required to put an escalating tax on exports as softwood lumber prices drop below a predetermined threshold. It’s a form of managed trade, designed to control access to the U.S. market and limit potential harm to producers there.
You might expect that Canadian lumber producers would be anxious to escape those shackles. They’re not. Citing the will of the industry, Ottawa is already pushing hard to renew the agreement. It is a powerful reminder that true free trade between the two countries does not exist, and may never.
“There is general agreement in Canada in the value of maintaining this predictability and stability which has resulted from the softwood lumber agreement,” explained Rudy Husny, a spokesman for Trade Minister Ed Fast. “We have shared with the U.S. government our preference for a renewal of the agreement.”
So far, there has been no official U.S. response. But the U.S. lumber lobby has made noises in recent months that it wants changes, rather than a straight renewal. U.S. producers have long argued that Canadian provinces heavily subsidize producers with cut-rate timber and other benefits – claims vehemently disputed in Canada.