Feds drop legal fight over U.S. lumber duties; B.C. industry braces for impact

The long-running softwood lumber dispute between Canada and the U.S. has taken a turn, with Ottawa backing away from two legal battles over duties dating back to 2017 and 2019.

The federal government says it’s a strategic move to help negotiate a broader trade deal, but some producers in B.C. — Canada’s largest softwood-producing province — say they’re the ones left paying the price.

While many in the lumber industry are happy to see the federal government get involved, they hope to see more action with current U.S. duties as a review into the Canada-United States-Mexico Agreement (CUSMA) looms.

But in the present, local lumber distributors are facing many unknowns, as U.S. duties have risen by 20 percentage points in the last six weeks.

“We are not fighting over the terms of the last trade agreement; we are dealing with a new agreement, and those terms are quite different than the past,” said Brian Menzies, executive director of the Independent Wood Processors Association of B.C.

“So now we have to compete in a marketplace with a tariff on top of it, and it’s grown to 35 per cent.”

At Kermode Forest Products in New Westminster, 25 per cent of their lumber supply goes to the U.S. But with the price of lumber rising and their American customers backing off, they are experiencing more financial pressure and uncertainty.

“It has had a major impact on our industry, because that’s a huge escalation to the price of our U.S. consumer,” said Kermode director Ed Arnold.

“We are just nervous, apprehensive, and hoping that some kind of positive conclusion can come sooner rather than later.”

In the meantime, the province says it will launch two new initiatives in partnership with the federal government to support workers and communities affected by U.S. tariffs, specifically in the forestry industry.