The Canadian lumber industry is reeling following the US Commerce Department‘s decision to impose permanent duties averaging 29% on its softwood exports to the US.
Canada’s international trade minister Pierre Pettigrew called the duties ‘obscene’, while the British Columbia Lumber Trade Council predicted the loss of up to 30,000 forestry jobs. Doman Industries has already announced the closure of three mills, laying off 400 workers.
After a long investigation, the US Commerce Department decided that Canada subsidises its lumber industry by charging low rates for logging of public lands and allows producers to sell lumber in the US at below market prices, a practice known as ‘dumping’.
A 19.3% duty was set for the subsidies while an additional tax averaging 9.7%, but as high as 15.8% for Weyerhaeuser, was levied for dumping.
Thousands of Canadian jobs have already been lost since preliminary duties were introduced last year.
However, the duties cannot come into effect until the US International Trade Commission (ITC) makes its ruling on May 6.
