06/27/2017 15:04 EDT | Updated 06/27/2017 17:31 EDT

Canada Sticking To Its Guns In Softwood Dispute With U.S.: Trudeau

A union president described the U.S. tariffs as a "slap in the face" to fair trade.

Justin Tang/The Canadian Press
Prime Minister Justin Trudeau arrives for a media availability at the National Press Theatre in Ottawa on June 27, 2017.

OTTAWA — Prime Minister Justin Trudeau says Canada will persist with its efforts to negotiate a new softwood lumber deal with the United States despite a second round of import tariffs slapped on Canadian wood by the United States this week.

Late Monday, the U.S. Department of Commerce ruled Canadian softwood producers were dumping lumber into the United States at prices lower than market value in Canada and added another 6.87 per cent in import duties to most Canadian softwood.

The decision — which is a preliminary figure awaiting final determination later this year — brings the average import duty to 26.75 per cent, when added to the countervailing duties the United States imposed at the end of April, arguing Canadian wood is unfairly subsidized.

Canada intends to challenge the duties in court or through international trade tribunals but can't until the final determinations are made.

The current duties would cost Canadian producers an estimated $1.7 billion a year.

Trudeau says Canada has repeatedly emerged triumphant each time the U.S.-Canada softwood dispute lands in the courts, and expects the same outcome again.

He said the introduction of both countervailing and anti-dumping duties is similar to what has happened in past softwood disputes. This is the fifth time the United States has imposed duties on softwood since 1981, and each time the two countries have eventually come to a negotiated settlement.

"But this is still an issue that affects thousands of jobs across the country in small communities," the prime minister said. "It's something we take very, very seriously and will endeavour ... to continue to work very, very hard on with the American administration."

Chris Wattie / Reuters
Prime Minister Justin Trudeau says Canada has repeatedly emerged triumphant each time the U.S.-Canada softwood dispute lands in the courts, and expects the same outcome again.

Unifor president Jerry Dias calls the latest round of tariffs a "slap in the face" to fair trade that pushes the lumber industry closer to the edge of crisis.

The union, which represents some 24,000 workers in the sector, estimates that sustained combined duties of 25 per cent could eventually result in 25,000 lost jobs north of the border.

Conservative MP Randy Hoback, the official Opposition critic for Canada-U.S. relations, said Trudeau had a deal in hand with the former administration of president Barack Obama and he let it slip away.

Hoback is in Montana for a meeting with western governors, where he said opinions of softwood vary depending on the state. But he said the general consensus there is that a deal would have been possible had Canada more quickly embraced the Trans Pacific Partnership, a trade deal Obama wanted but which the U.S. has walked away from under President Donald Trump.

"They were looking for us to show leadership on TPP," Hoback said.

We're going to see small towns turn into ghost towns.

"If we would have done that instead of doing another year of consultations across Canada, it would have given Obama the cover to push it through, and then would have also given us the ability to negotiate a softwood lumber agreement."

Hoback said he thinks the ultimate result will be more consolidation of the industry in Canada, with the biggest companies snapping up small outfits to get access to their wood quotas without necessarily keeping their sawmills open.

"We're going to see small towns turn into ghost towns," said Hoback.

NDP MP Nathan Cullen says eliminating as many Canadian companies as possible is the main goal of the U.S. action, and says there are already mills in his northern B.C. riding that can't afford the duty bills handed them by the U.S.

But Susan Yurkovich, CEO of the B.C. Lumber Trade Council, said layoffs and job cuts will be avoided for the most part until the U.S. government sets final duty rates later this year — unless lumber prices suffer a precipitous decline.

With files from Ross Marowits in Montreal

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