Canadian lumber producers stuck with American duties

U.S. Commerce department maintains softwood lumber duties at lower rates

B.C. lumber headed to the U.S. will continue to be hit with duties of 8.6%. | Shutterstock

The U.S. Department of Commerce has issued a final determination on countervailing and anti-dumping duties for Canadian softwood lumber.

The Commerce department has lowered the duties, but is maintaining them – frustrating Canadians’ hopes that they would ultimately be dropped altogether.

The new combined rate for the duties is 8.6%, down from preliminary rates of 18%.

“While the reduction in duty rates from this third administrative review is welcome, the fact that we are required to continue to pay duties on our lumber products sold to the U.S. market remains frustrating and disappointing,” said Susan Yurkovich, president of the BC Lumber Trade Council.

“As we have long emphasized, these unfair duties hurt not only B.C. businesses and workers, but also U.S. consumers looking to repair, remodel and build new homes. As U.S. producers remain unable to meet domestic demand, these duties continue to hinder post-pandemic recovery and exacerbate inflationary pressures on both sides of the border.”

"We continue to be frustrated after today's announcement by the United States Department of Commerce that the U.S. will continue to apply unjustified duties on B.C. and Canadian softwood lumber exports to the U.S.,” said B.C. Forests Minister Katrine Conroy. "At a time when we need to work together in the face of rising costs related to global inflation, these tariffs are making housing and lumber more expensive on both sides of the border.”

According to second quarter financials, Canfor Corp. (TSX:CFP) paid $96 million in duties in the first half of 2022. In total, Canadian companies have paid about $9 billion in duties, which are held in trust until final determinations.

The final determination made by the U.S. Department of Commerce are still subject to challenge. The Canadian government plans to challenge duties through a dispute settlement process under the Canada-United States-Mexico Agreement (CUSMA) -- formerly known as the North American Free Trade Agreement.