Softwood lumber strife between Canada and forestry titans to the south is certainly burning up headlines this year.
The buzz on Thursday was about Prime Minister Justin Trudeau’s telephone chat with U.S. President Donald Trump - Canadian Press reported that softwood lumber negotiations were a topic of discussion, as a follow-up to the leaders first White House meeting the week previous.
So timber news is certainly a hot topic these days. But in reality, the softwood lumber dispute is not a “new” news story. In fact, lumber conflicts between the two nations date back almost 40 years.
ATCO Wood Products, Fruitvale
With so many jobs in the West Kootenay tied to forestry, the Trail Times talked about the current industry climate with ATCO Wood Products owner Scott Weatherford. The family-owned Fruitvale company has been operating since the 1950s, now producing softwood veneers for plywood customers in Canada and the United States. The Weatherfords (Scott and wife Rebecca) took over the business 10 years ago, and in that time, ATCO has joined the U.S./Canadian Sustainable Forestry Initiative program and become well known for their long-term business model and community-minded vision.
Weatherford points out that although softwood lumber is hot on the radar, the industry has long been the centre of trade disputes between the neighbouring countries.
The current manifestation of conflict is the fifth time the matter has formally risen since the early 1980’s, he explained.
“Generally, the U.S. softwood lumber industry will file a complaint with the U.S. Department of Commerce alleging that the import of softwood lumber from Canada to the U.S. is unfair and harms the U.S. industry,” Weatherford began. “The U.S. Department of Commerce will investigate the complaint and if they agree, which usually happens, import duties on softwood lumber from Canada will be levied.”
Historically, trade representatives from Canada and the U.S. pursue negotiations alongside these more formal trade actions, and end up coming to agreement on some form of managed trade on softwood lumber for a period of time, he added.
“When that agreement expires, the cycle starts again.”
According to the Council of Forest Industries, B.C. is the largest producer of softwood lumber in Canada (52 per cent), contributes $12 billion annually to the provincial GDP, one in 16 B.C. jobs is tied to the forest industry, and 40 per cent of regional provincial economies are dependent on forestry.
Whittled down to basic economics, softwood lumber is critical to the economy of small town rural B.C. Terms that land in a new Softwood Lumber Agreement (SLA) will impact local forestry companies and thereby affect the local economy, in addition to economies in communities across the province.
“The imposition of trade restrictions on softwood lumber will affect the entire forest industry in B.C. and in the West Kootenay,” Weatherford said. “Trade restrictions on any item that is traded between two countries will affect markets on both sides of the border.”
Market changes in response to trade restrictions are difficult to predict, there are many factors to consider, he continued.
“In addition, we do not know yet what exact form or magnitude those trade restrictions will take.”
B.C. wood products are exported to numerous countries, but the United States is a natural destination for sales due to the close proximity of the American market.
“ATCO has customers in both Canada and the U.S., as do most forestry companies in B.C.,” Weatherford said. “ATCO belongs to an industry association called the ILMA (Interior Lumber Manufacturers Association). Our membership is comprised of independent, family-owned forest companies in the southern interior of B.C.”
Unique, long standing business models within the B.C. forestry sector have been carved out over time.
“All of our companies generally focus on producing specialty wood products and service niche markets,” Weatherford shared. “In addition, our companies are intricately tied to the communities where we operate and consequently have a very deep bond with those communities. Our work within the ILMA is to educate on the benefits of our business model, and work to ensure that our type of family-owned, forestry businesses remain viable in the ever changing forest industry landscape for decades to come.”
Wood products manufactured in British Columbia are often the result of complex supply chains such as forest<s