Early signs point to higher softwood lumber duty rates

The U.S. is Alberta’s largest customer for softwood lumber products. In 2019, the province’s forest industry exported $769 million of softwood lumber to the U.S., representing 86% of the province’s total softwood lumber exports.

In 2017, tariffs were imposed on softwood lumber products. Alberta companies currently pay estimated duties between 20.23% and 23.56% on their exports. Roughly C$5.4 billion of softwood lumber duties have been collected since 2017.

Every year, the Government of Canada can request an administrative review to make sure the rates take into account the most current information about our exports of softwood lumber to the U.S. The result of this administrative review can be higher tariffs, lower tariffs, or the removal of tariffs.

On May 21, 2021, the U.S. Department of Commerce issued a preliminary ruling on rates – and they signaled higher rates for Alberta forestry companies. Although these rates are not legally binding until the final determination rates are released this fall, they do provide a signal of what to expect for this second administrative review.

This is a disappointing preliminary ruling. Increased tariffs unfairly target Canadian softwood lumber exports. At a time when North American wood and wood products are seeing record demand, this direction is unjustified. We need to work together to support forestry on both sides of the border.

Our province is home to world-class forest companies and the U.S. is a critical customer for Canada. These increased costs for Alberta lumber in the U.S. market make us less competitive.

We will continue to defend our forest sector through legal action and appeals under the North American Free Trade Agreement/Canada-United States-Mexico Agreement and World Trade Organization appeal processes.

We cannot lose sight of our ultimate goal to ensure Canadian softwood lumber is treated fairly, and recognized for the benefits it creates in both Canada and the United States.

Alberta will continue to support Canada in its ongoing efforts to push for the free flow of trade to ensure prosperity for both nations, and for Alberta’s forest industry.