Potential cross-border lumber dispute worries some Nova Scotia firms

A Nova Scotia company that manages 220 private woodlots in the province is worried about an announcement that the U.S. Lumber Coalition is considering levying new duties on Canadian softwood lumber shipments.

On Friday, the coalition filed a petition asking the U.S. Department of Commerce to investigate Canadian softwood lumber shipments.

The news kicks off a fresh round of litigation between two countries with a long history of trade disputes over wood.

"It costs a lot of money to fight these battles and if there was, say, a 15- or 20-per cent tariff put on our lumber, it would be very hard for us to compete and continue," said Ed MacDonell, the manager of Conform Limited, based in Middle Musquodoboit, N.S.

"Margins are so small now that it would take any profit out of it."

He said the company produces 20,000 tonnes of raw material for the forest industry each year, a "significant" amount of which is exported to the U.S.

'Never been found in the wrong'

With thousands of direct and indirect jobs at play in Nova Scotia, MacDonell worries about the economic impact any new tariffs would have on the Nova Scotia economy.

In a Friday news release, the U.S. lobby group alleged that Canadian provinces provide trees to lumber producers for a fee that is below the market value for timber. Canada has denied the allegation.

Canada is warning softwood lumber producers about the proposed penalties for what the U.S. calls unfair subsidies.

"Canada is prepared for any situation, and our government will vigorously defend the interests of Canadian workers and producers," said a statement issued Thursday by the office of International Trade Minister Chrystia Freeland.

"‎‎Our softwood lumber producers and workers have never been found in the wrong; international bodies have always sided with our industry in the past."

'It's going to be quite costly'

Canada's previous agreement with the Americans expired in 2015. A one-year, no-litigation period, during which no new trade actions could commence, expired Oct. 12 and this petition has been expected ever since.

The Canadian government has been trying unsuccessfully over the last year to negotiate a new deal.

MacDonell hopes a deal can be reached soon.

"I really hope our governments step up and bring an end to this because it's going to be quite costly," he said.

Talks between Canadian and American officials to reach a deal are expected to continue despite the petition.