Woodlot owners worry softwood duties will push them out of business

Sawmill owners and wood producers are worried their companies won't survive if the U.S. imposes duties on softwood lumber imports, says Rick Doucett, president of the New Brunswick Federation of Woodlot Owners.

The U.S. Department of Commerce is expected to announce a decision Tuesday on levying duties against Canadian softwood lumber imports, which could end a 10-year Canada-U.S. softwood lumber agreement.

Twenty-five New Brunswick sawmills owned by 14 companies will be affected if the United States imposes a duty on Canadian softwood lumber, according to the provincial government.

"Our biggest concern is if [the duties] are too big, the companies can't absorb those and some will go out of business," said Doucett. "Then we lose further competition and further markets."

He said estimates of the new duties range between 20 and 40 per cent, which could lead to closures, the worst-case scenario in New Brunswick.

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The issue of duties isn't new, since the U.S. has maintained for years that the Canadian lumber industry is unfairly subsidized.

Doucett said the biggest difference now is that New Brunswick has consolidated its marketplaces and a lot of sawmills have already disappeared since 2006, when the two countries agreed on a solution to their longstanding dispute.

Crown vs. private

Doucett said private sources of wood would be key to exemptions from new U.S. duties, yet New Brunswick policies have allowed J.D. Irving and other big forestry companies to harvest even more wood from Crown lands in recent years rather than buying from private woodlot owners.

In 2006, Doucett said, the private wood sector was running around 25 to 27 per cent of the total market share, but by 2008 it was down eight per cent.

"The issue is if we're not managing the private market that well in the province, we start to lose ability to make that argument that these companies having access to public land are not at an unfair advantage — that's where we dropped the ball a little bit over the last decade."

He said his group has pleaded its case to successive governments for making sure private woodlot owners play a greater role in the New Brunswick market.

"We've ... said, 'Look guys, we need to get this marketing situation sorted out here in the province because it could turn around and bite us and this is one of the ways it could.'" 

We shouldn't have a crisis like this to reflect on how the public forest is managed in the province.-Rick Doucett

Last week the province announced that it intends to fight for exclusion from border duties on softwood lumber and said a task force was looking at what can be done to mitigate the effects of any duty.

"As the forestry sector we are feeling a bit maligned and somewhat dismissed as far as an important part of the sector," Doucett said. 

New Brunswick mills account for about two-thirds of the lumber production in Atlantic Canada, and receiving favourable treatment from the United States is viewed as critical to sustaining the industry and jobs that depend on it.

Nearly $470 million of New Brunswick softwood was exported last year — more than 90 per cent of it destined for the U.S.