Prime Minister Mark Carney greets employees after touring the Gorman Brothers Lumber sawmill and making an announcement, in West Kelowna, B.C., on Tuesday.DARRYL DYCK/The Canadian Press
Prime Minister Mark Carney said on Tuesday his government will provide $1.2-billion in financial supports for Canada’s softwood lumber producers to deal with increased U.S. trade duties.
Mr. Carney said the package includes $700-million in loan guarantees, aimed at helping forestry companies get financing necessary to support and restructure their operations to reduce their reliance on exports to the United States.
The Prime Minister said the supports also include $500-million in grants and contributions companies can use to bolster product development and market diversification efforts.
Such products could include reinforced timber and low-carbon, wood fibre-based insulation used in prefabricated housing.
As part of the program, the government will prioritize Canadian lumber in its plans to increase housing construction across the country, Mr. Carney said in a speech at a lumber mill in West Kelowna, B.C.
It will be integrated with the government’s strategy, called Build Canada Homes, to double the rate of new home construction to 500,000 units a year through 2025. That will double the use of Canadian softwood lumber in new home construction to nearly two billion board feet per year while also doubling demand for structural panels, he said.
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As it stands, almost 90 per cent of Canadian lumber exports go to the United States, where President Donald Trump has raised duties on those shipments, Mr. Carney said.
“This dependence creates costly uncertainty. It weakens our industry’s ability to weather downturns. It makes lumber more expensive for builders at home, and it forgoes enormous opportunities in fast-growing markets around the world,” he said.
The funding will include programs to support Indigenous-led business development.
The U.S. has long targeted Canadian softwood exports as unfair because it says the fees that producers in Canada pay to chop down trees on Crown land, known as stumpage, are too low. It has also repeatedly alleged that Canadian producers are dumping timber in the U.S. market at below fair value.
Last month, B.C.’s lumber industry said it was notified that the U.S. Commerce Department is increasing anti-dumping duties on Canadian softwood producers to 20.56 per cent.
The move increases duties against most Canadian producers to 27.3 per cent. Meanwhile, if countervailing duties are raised further to levels that were announced on a preliminary basis in April, the total would be roughly 35 per cent. The BC Lumber Trade Council called the duties unjustified and harmful. Canadian lumber makes up about a quarter of U.S. demand.
Mr. Trump has raised the tariff on some Canadian goods to 35 per cent, though that represents a fraction of exports as most are exempt under the rules of origin outlined in the United States-Mexico-Canada Agreement.
The Forest Products Association of Canada, which represents wood, pulp and paper producers, said it welcomed Ottawa’s support for the industry as the government also tries to hammer out a trade deal with the United States.
“As those deliberations continue, today’s measures announced by the Prime Minister are helpful as we try to stabilize the industry for the months ahead and at the same time achieve our shared goals of building more homes, improving competitiveness, increasing production and investment in Canadian operations, and growing new markets for the long-term,” Derek Nighbor, the association’s chief executive officer, said in a statement.
Mr. Carney said his government plans to launch new programs to diversify markets for Canadian lumber, emphasizing to trade partners that green building offers environmental and economic opportunities in hopes that the Canadian industry can share in global opportunity of $150-billion to $240-billion.
Meanwhile, Ottawa will make $50-million available to retrain workers whose jobs will change or are in jeopardy as a result of the transformation in the industry, he said.