Tariffs would 'decimate' northern Ontario softwood industry: NOMA president

Northern Ontario's softwood lumber industry would be decimated if United States President Donald Trump implements a tariff on Canadian goods, the president of the region's municipal association said.

The White House confirmed earlier Friday that Trump plans on implementing 25 per cent tariffs against Canada and Mexico, and a 10 per cent tariff against China, on Feb. 1.

"This is something that's going to be really serious for us in northwestern Ontario," said Wendy Landry, president of the Northern Ontario Municipal Association (NOMA) and mayor of Shuniah.

"We've been paying a 14 per cent tariff already on softwood lumber going to the United States," she said. "Adding a 25 per cent would put us over 30 per cent on tariffs on our softwood lumber."

"That will decimate our lumber industry here, especially for our small towns that depend on that industry that are left in northwestern Ontario."

Ian Dunn, president and CEO of the Ontario Forest Industries Association (OFIA) said softwood lumber duties are expected to double this year, as well, to about 30-35 per cent.

"In reality, Ontario lumber producers could face 60 per cent tariffs at the border, which would effectively wipe out all US shipments," Dunn said. "In terms of global exports, Ontario exports about $7.9 billion of forest products per year."

"Ninety-seven per cent of that ... goes to the United States," he said. "So if there's another 25 per cent tariff on the border, that's another $2 billion year impact, at least."

And, Dunn noted, the 25 per cent tariff would not just apply to softwood lumber.

"It is on all exports to the United States," he said. "I don't think there is one company in our membership that has 25 per cent margins. This is going to put everyone underwater."

There would be a cascading effect, as well, Dunn said.

"Sawmills, of course, produce lumber, but they also produce residuals," he said. "They produce wood chips, which typically are being consumed by the pulp and paper mills in the province."

"Currently, there are only three that are operating," Dunn said. "There used to be many more, but there are only three."

Meanwhile, Dunn said sawmills have already seen impacts from the high softwood lumber duties.

"If there's additional impacts, and there's less production at the sawmills, there is less raw material for the pulp and paper mills," he said.

However, the tariffs also provide an opportunity to make more use of Ontario forest products locally.

"Ontario imports about $1.7 billion of American natural gas every year, primarily in the GTA," Dunn said. "We have member companies that are looking very closely, or in the process of, making syngas (synthetic gas) made out of forest biomass."

"We can heat homes with forest biomass, we can create a transportation fuels using forest biomass," he said. "So absolutely it's an opportunity to really strengthen what we have."

"However, on the other hand, like I said, 97% of exports (or $7.7 billion a year CAD) goes to United States. It's gonna be impossible to replace that market."