A new softwood lumber deal is expected to be reached within the next couple of months.
The 2006 softwood lumber agreement between Canada and the U.S. expired on Oct. 12, 2015. Under the terms of the agreement, the U.S. is precluded from launching trade action against Canada for a period of one year after the agreement expires.
During prime minister Justin Trudeau鈥檚 official visit to the White House in early March, Trudeau and U.S. president Barack Obama announced that a new softwood lumber deal would be reached within the next 100 days.
鈥淚鈥檓 confident that we are on a track towards resolving this irritant in the coming weeks and months,鈥� said Trudeau in early March.
Trudeau and Obama have instructed trade ministers of U.S. and Canada to explore all options for solving the trade dispute and report back to them within the next couple of months.
According to CBC, Canada鈥檚 trade minister Chrystia Freeland said getting president Obama to view the softwood lumber dispute with some urgency was 鈥渢remendous,鈥� and that it helped secure a 鈥渞eal breakthrough鈥� in the contentious softwood lumber negotiations.
However, Freeland said the new timeline and commitment from president Obama would not mean the end of softwood disputes once and for all, according to CBC.
鈥淚 don鈥檛 want people to think this is going to be done and dusted, and we don鈥檛 have to worry about softwood negotiating for another 10 years,鈥� she told CBC. 鈥淏ut what we have committed to is to make significant, meaningful progress towards a deal.鈥�
Meanwhile others are not as optimistic about the possibility of a deal.
Provincial NDP forestry critic Bruce Ralston told The Globe and Mail that with the political uncertainty of the pending U.S. election, a deal within 100 days is far from certain.
In October 2015, B.C. premier Christy Clark said the U.S. had not been willing to discuss renewing or extending the agreement. In a statement in the legislature, Clark said the province had been working with the federal government seeking an extension or renewal of the agreement for the past two years.
The Canada-U.S. lumber dispute is a long standing issue.
Softwood lumber dispute first arose in 1982 with a complaint by the U.S. lumber industry that low Canadian stumpage rates constituted an unfair advantage.
The 2006 softwood lumber agreement required Canada to put an escalating tax on exports as softwood lumber prices drop below a predetermined threshold. The deal is a form of managed trade, designed to limit potential harm to American producers.
According to Steve Zika, Chief Executive Officer of Hampton Affiliates 鈥� company that owns Babine Forest Products -, if a deal is not reached before October, there is a risk that the U.S. will file for antidumping or other tariffs, similar to what was in place prior to the last softwood lumber agreement.
鈥淎ny additional taxes or tariffs will have a negative effect on individual operations in B.C.,鈥� explained Zika. 鈥淒epending on market or economic conditions at the time, these additional costs could result in less operation hours or closures of some facilities.鈥�
The province estimates that about 40 per cent of B.C.鈥檚 rural communities are dependent on forestry. In fact, B.C. is Canada鈥檚 largest producer of softwood lumber, accounting for 55 per cent of Canada鈥檚 lumber exports to the U.S. forestry.
