Forestry companies in Williams Lake are being hit with some of the highest softwood lumber tariffs announced by the U.S. Department of Commerce this week.
Under preliminary countervailing duty rates beginning May 1, West Fraser Mills will have to pay the most at 24.12 per cent and Tolko Industries Ltd. will pay the third highest at 19.5 per cent.
At the end of August the duties, which are in the form of cash payments, will stop until the final orders are published in January 2018.
A U.S. ruling due June 23 will also determine if Canadian companies may be required to pay additional anti-dumping duties as well.
Paul French, president of United Steelworkers Local 1-425 that represents roughly 900 forestry workers in 100 Mile House and Williams Lake, said he was not surprised and actually thought the rates may have been even higher.
“I won’t say I am relieved because we still have the anti-dumping tariffs further on,” French told the Tribune Tuesday. “We have some certainty with the numbers but where we are going to wind up is still out there.”
A backgrounder released by the Ministry of Forests Tuesday noted the U.S. Department of Commerce argues the countervailing duty is required to offset what in its view is unfair subsidies that Canadian and provincial governments allegedly provide to lumber companies.
While Tolko, Canfor and West Fraser are all based in B.C., they all have operations in other parts of Canada, which has affected the preliminary duty that was assessed for each company, the ministry said.
On Monday BC Lumber Trade Council president Susan Yurkovich said the duties were “unwarranted” and “determined without merit.”
The allegations made by the U.S. lumber lobby are the same arguments they made in prior rounds of litigation, all of which were rejected and overturned by independent NAFTA panels, Yurkovich added.
“This new trade action is driven by the same protectionist lumber lobby in the U.S. whose sole purpose is to create artificial supply constraints on lumber and drive prices up for their benefit, at the expense of American consumers.”
When contacted by the Tribune both Tolko and West Fraser declined comment saying the BC Lumber Trade Council who represents them is handling all media statements.
Honourable Jim Carr, Minister of Natural Resources and the Honourable Chrystia Freeland, Minister of Foreign Affairs confirmed the Government of Canada will vigorously defend the interests of the Canadian softwood lumber industry, including through litigation.
“In ruling after ruling since 1983, international tribunals have disproved the unfounded subsidy and injury allegations from the U.S. industry,” Carr and Freeland said in a joint statement. “We have prevailed in the past and we will do so again.”
Cariboo Prince George MP Todd Doherty, said with litigation there are losses and collateral damage.
“The last time we went through this more than 15,000 jobs were lost in the province of B.C. alone,” Doherty said. “The government has said they expected this, well if they did they should have had a plan. Clearly today you are seeing a government that didn’t take this seriously and was caught off guard.”
Doherty praised the provinces for leading the charge against the trade action.
“With all due respect, our provinces have been showing the leadership while our federal government has taken a back seat which is unacceptable,” Doherty said. “It is maddening.”