Trump tariffs could lead to Quebec sawmills closing, forestry industry fears

Quebec forestry companies say they're worried former U.S. president Donald Trump's re-election will lead to more plants in the province closing.

Throughout Trump's campaign, the president-elect promised a 10 per cent tariff on all imports entering the U.S., including Canadian softwood lumber. The threat has made many Canadian forestry companies, which are already struggling, fear the worst.

Forestry companies are already critical of paying a 14.54 per cent tax on lumber at the American border.

Étienne Vézina, Domtar senior director of forestry, said the current tariffs are already leading to some sawmills and plants in Quebec closing.

"Tariffs are definitely a problem for us," said Vézina. "If we see a U.S. tax rise to 30 per cent, there will be difficult decisions to make."

Domtar, which has between 4,000 to 5,000 workers across 24 plants in Quebec, is already feeling the impact.

Two of the company's plants will have to close indefinitely. The sawmills in Rivière-aux-Rats in Mauricie and those in Maniwaki in Outaouais will cease operations just before Christmas. More than 500 workers in the industry will be affected.

"It's always a difficult decision," Vézina said. "But at some point, when a plant isn't profitable, we can't keep it running in the long term. It takes better foresight and favourable market conditions."

Quebec government has fingers crossed

The day after Trump was re-elected, Premier François Legault announced he would put in place a "Quebec-United States working group" to defend the province's interests. Many ministers have joined it to come up with a strategy to protect Quebec industries.

Maïté Blanchette Vézina, Quebec's natural resources minister, has tried to reassure the local industry, even if negotiations with the U.S. are expected to be difficult. She said she was in Washington a few months ago to discuss the softwood lumber dispute.

"We are in regular discussions with members of the forestry sector to find solutions," she said. "We managed to work with Trump's team in 2016, and I am convinced that we will continue to find ways for Quebec to come out on top."

Forest industry asks for help

The Quebec Forestry Industry Council (QFIC) is asking the government for financial assistance.

Foresters estimate that $2 billion belonging to companies is stuck at customs because of U.S. tariffs. They want to recover the money, but in the meantime, they say they want loans from Quebec.

"The most important thing for the industry is predictability. Knowing where we are going. These are big investments" said Jean-François Samray, president of the QFIC.

He also noted that taxing wood products, including pulp and paper exported to the United States, could significantly reduce the purchasing power of American households.

"[Cardboard boxes] are everywhere in the United States on store shelves, be it at Walmart or in grocery stores. They are everywhere." Samray said.

Members of the Quebec forestry industry noted that the U.S. is also experiencing a housing shortage, which they see as an opportunity to mitigate tariff threats.

An increase in tariffs on Canadian lumber would inevitably affect inflation and Americans' purchasing power.

"We really hope that our governments, both Quebec and federal, will be proactive, take forestry to heart and defend our interests with the new [American] government that is being put in place," said Vézina, the senior director of Domtar.