Nova Scotia forestry sector anxious about possible U.S. tariffs

Greg Watson watches as spruce logs destined for export to the U.S. are hauled from the forest floor in Nova Scotia's Cobequid hills.

The manager of the operation, Watson has worked in the industry for nearly 30 years. But it's an uncertain time with trade tariffs a growing concern.

U.S. President Donald Trump did not announce any tariffs against Canada during his inauguration on Monday but mused late in the day about introducing them on Feb. 1.

"We're already looking at other things we can do to generate revenue," Watson says.

He has been with North Nova Forest Owners Co-op for the past 17 years.

The co-op is made up of more than 430 members that own land. Almost half of the wood that is harvested from their woodlots in northern Nova Scotia ends up being exported to the U.S.

Watson, who spoke prior to Trump's inauguration, says it's imperative to explore other markets and efforts to diversify.

"Any more downward pressure, I don't know how much more we could take before it makes sense just not to cut wood and we have to look at alternative activities or other options for our wood for export," Watson said.

The logs that are cut end up at sawmills. They, too, are bracing for what could happen next.

"For us, it's the cost of production," says Robin Wilber, the president of Elmsdale Lumber Company.

The plant north of Halifax makes about 20,000 pieces of wood for construction every day. The company relies on heavy machinery to do it.

Constant maintenance that includes the replacement of key components is required.

"Most of that equipment, wherever it's manufactured, parts come from all over the world," Wilber said. "The parts, the cost will probably skyrocket both in the States and here."

An unintended consequence, he says, is how widespread the impact of tariffs could be. 

"It's just going to raise the cost of housing in both Canada and the United States," Wilber said.

In addition to lumber, a number of other Nova Scotia products are also exported to the U.S., such as mouldings for windows, pellets and paper.

Port Hawkesbury Paper produces supercalendered paper, a high-quality grade used in catalogues, coupons and publishing. 

The company said 93 per cent of it is sent south of the border.

"We continue to prepare to deal with this potential challenge," the company said in an email. "Port Hawkesbury Paper has been actively working on both sides of the border with customers, industry associations, as well as the Federal and Provincial governments."

Industry group fears job losses

Forest Nova Scotia estimates the industry exports about $600 million in forest products to the U.S. every year. It estimates the implementation of tariffs could carry a severe impact.

"You would see businesses go out of business," said Todd Burgess, the organization's executive director. "You would see contractors go out of business. You would see job losses. You would see mills curtail their production."

Watson is pleased to hear possible subsidies are being considered in the event tariffs are imposed. However, he doesn't see that as a long-term solution.

He said his hope is that Trump is just negotiating with Canada and things will not be as bad as many are predicting.