44th Parl. 1st Sess.
April 8, 2024 11:00AM
- Apr/8/24 6:32:29 p.m.
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Madam Chair, I think this is such an important issue, especially where I live in Port Alberni and the Alberni Valley, and on Vancouver Island. It is an issue where we actually need all sides to work together. This should not be a partisan issue. This should be all of us hammering Washington.
Over the last four decades plus, we have seen both Liberal and Conservative approaches in terms of their failed resolution to the softwood lumber dispute. The Liberal approach can be described as winning in court, but still losing as the U.S. has continued to levy tariffs against Canadian softwood lumber. The Conservative approach can be best described and characterized as appeasement through agreements, where Canada would not only impose an export tax on softwood lumber, but in return, the U.S. would remove its duties.
What new approach is the government going to bring? The sense of urgency is real. We have the first new mill in 15 years on Vancouver Island in my community, and it is struggling right now. The tariffs are crippling, and the sense of urgency is real.
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- Apr/8/24 6:38:57 p.m.
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Madam Chair, my colleague talked about a team Canada approach. The problem with that is that the federal government does not listen to the province that is paying the most in terms of U.S. softwood lumber tariffs.
Quebec accounts for 20% of Canada's softwood lumber exports to the United States, but it pays 48% of the tariffs. The federal government never wanted to lead the softwood lumber fight. Its main strategy in the dispute with the Americans was to protect the automotive industry to ensure that Canada can sell electric vehicles to the United States and benefit from the same tax credits. The federal government has never wanted to lead the fight. That is symptomatic of the problem that we have. We do not have enough leverage. Not one Liberal member is capable of defending Quebec's forestry industry.
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- Apr/8/24 6:51:03 p.m.
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Madam Chair, I rise today to speak to the softwood lumber dispute between the United States and Canada, and the over $8 billion in tariffs that the Americans have collected from Canadian businesses.
As adviser to the leader of the official opposition on Canada-U.S. relations, I wish to give my unique perspective on what I have learned in Washington and on the challenges that the Liberal government has created in reaching a negotiated deal.
This situation is one of the Prime Minister's own doing, and it is reflective of his lack of care for the forestry sector as a whole and for the thousands of Canadians who are impacted.
There has been $8 billion in tariffs collected as a direct result of the Liberal government's failure to prioritize Canadian workers, indigenous communities and our natural resource sector. It did not need to be like that. There is a desire on both sides of the border to resolve this matter, as Americans and Canadians recognize the importance of the industry. There is no excuse for not reaching a negotiated deal.
Over the last 42 years, Canada and the United States have reached agreements on softwood lumber. The most recent agreement, softwood lumber agreement five, was in place from 2006 to 2016.
SLA 5 was in place because the former Conservative government understood the importance of the forestry sector to Canada. We understood that the forestry sector was mutually beneficial to both Canada and the United States. When we went to Washington, we made sure that we worked collaboratively with our American partners to reach an agreement.
The Liberal government has done the exact opposite. It has completely ignored the situation and has refused to address the dispute at the highest levels of government. When the agreement expired in 2016, the Liberal government should have made it a priority to negotiate a resolution with the Americans, but instead, it delayed and looked the other way.
As the years passed, the hon. ministers of international trade blamed the American government, claiming there was no desire to resolve the dispute in Washington. I wish to contest that point. Over the years, American legislators, associations and companies have publicly made it quite clear that they want the softwood lumber dispute resolved, and for good reasons.
The United States does not produce enough lumber for its own needs. In a letter dated May 17, 2021, addressed to the United States Trade Representative, Katherine Tai, over 90 members of both parties in the House of Representatives urged the U.S. federal government to resolve the matter with the Government of Canada, saying, “We now call upon you to represent American interests on this critical issue by pursuing a balanced agreement with Canada. We, as Members of Congress, stand ready to discuss this issue and potential solutions with you.”
Additionally, on May 12, 2021, members of the United States Senate Committee on Appropriations wrote to the Secretary of Commerce and USTR Tai, saying, “We write to urge you to take action to resolve the longstanding trade dispute between the U.S. and Canada on softwood lumber” and also saying, “These imports are vital to support the ongoing housing boom”.
It has not been American denial. It has been the Liberal government's refusal to acknowledge the issue at the highest levels of government and to advocate effectively for a solution to the softwood dispute.
Most interestingly is that the Standing Committee on International Trade published a report in November 2023 analyzing the problem and the possible remedies. During those hearings, Government of Canada officials noted that the Minister of International Trade raised the issue of the current dispute directly with President Biden. She raised the issue.
According to officials at Global Affairs Canada, the Prime Minister also emphasized the harm of American tariffs on Canadian softwood lumber producers and employees, yet in the report, recommendation 4 states, “achieving an agreement with the United States regarding trade in softwood lumber products ultimately will occur only through direct head-of-government negotiation”, and it also says, “the...softwood lumber dispute should be made a high-level priority in dealings with the U.S.”
They had the President of the United States in Ottawa last March, yet again, the Liberal government failed to advocate for Canadian jobs and Canadian interests adequately.
This report, the timeline and the situation we currently find ourselves in demonstrate that the Prime Minister has routinely failed to resolve the dispute and has failed to make the interests of Canadian workers a priority when dealing with the United States.
The previous Conservative government successfully negotiated a deal, yet the Prime Minister has failed to provide the attention this dispute so desperately requires over the last five years.
Why has he continued to fail to negotiate a deal if these Canadian jobs are so important to the Prime Minister? Why does the Liberal Government not give the issue the attention it desperately needs?
The softwood lumber dispute will not resolve itself overnight. It requires actual leadership to get it done. We, as Conservatives, know that we can get it done. We also know that the Prime Minister is just not worth the cost.
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- Apr/8/24 7:10:46 p.m.
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Madam Chair, I remember when this first came up. Quebec had done the right thing. It changed its process. It changed the process it used to collect fees from logging within the province to comply with U.S. requirements. It relied on the federal government to negotiate on its behalf, whereas the Irvings, out of New Brunswick, said they were not going to trust the government and would do their own negotiation. The result was that the people who had relied on the federal government paid a tariff of around 21% or 23%, or somewhere within that range, and for the Irvings it was around 3% to 5%.
Would the member like to explain how he feels and how Quebec forestry producers must feel knowing the government let them down so badly? The proof is in the difference in the tariffs between what the Irvings paid and what other producers had to pay.
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- Apr/8/24 7:11:31 p.m.
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Madam Chair, Quebec is obviously tired of these punitive tariffs, these countervailing duties that keep coming back. As my colleague knows, when we talk to American elected officials, they too would like this to end, but often these decisions are made by the administrations. Many will say that they look forward to the court's decision and that will be good, except for some states where this topic is more political.
I remember one meeting with the U.S. trade representative, they assumed and admitted that this was a political issue. People from his office said that a number of forestry producers are fiercely in favour of countervailing duties, but the opponents of these countervailing duties are home builders. This raises a major electoral issue.
Nevertheless, we have the burden of proof: We need to show the Americans that this penalizes them as well. This certainly penalizes Quebeckers and Canadians, but it also penalizes Americans. It is up to us to do the work now.
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- Apr/8/24 7:47:00 p.m.
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Mr. Chair, there is a fairly simple solution to support forestry companies. It was actually people in the forestry sector who came up with this solution. They have to be given access to liquidity. To get through the current crisis, with its tariffs that are totally unfair, what people in the forestry sector are telling us is that they need access to liquidity so they can invest in their infrastructure.
Would my colleague agree that a federal program is needed to give forestry companies access to liquidity?
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- Apr/8/24 8:12:20 p.m.
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Mr. Chair, I will be sharing my time with the member for Abitibi—Baie-James—Nunavik—Eeyou.
Usually, the best thing a person can do is to tell the truth. Let us tell the truth this evening. The government has never been willing to provide real support for the forestry industry. That is rather easy to prove. My colleague from Saint-Hyacinthe—Bagot did so earlier when he said that the words “softwood lumber” do not appear anywhere in the Minister of International Trade's mandate letter. That shows how much this government cares about the forestry industry.
Meanwhile, the forestry industry is currently facing a perfect storm. If we look at everything the forestry industry is dealing with, we see that this economic sector that supports our regions is in jeopardy. This evening we are talking about punitive tariffs. If nothing is done and if the minister does not grow a backbone by then, these tariffs may increase from 8% to almost 14% in August. The federal government's financial support for the forestry industry is pathetic. I will come back to that later. It is absolutely nothing. It is peanuts compared to the support being given to another natural resources industry, the oil industry. It is downright appalling.
Our forestry sector has been going through major transformations over the past 15 years because the pulp and paper industry is gradually disappearing. We need to replace it with something else, but, unfortunately, we never get the financial support we need to make that happen. We also have a crisis caused by the woodland caribou, especially in Quebec, with the Minister of Environment threatening to enforce an order under the Species at Risk Act that would scuttle the efforts of many communities in Quebec that depend on the forestry sector. Then there was last summer's forest fire crisis.
All these factors add up to a perfect storm for the forestry sector. I think the only person who does not see that is the Prime Minister. Quebec MPs do not see it either. I rarely hear Conservative Quebec MPs talk about forestry. It is not just rare, it is practically unheard of. I have never seen them show any interest in the forestry sector, even when we studied it at the Standing Committee on Natural Resources. I am sure that Quebec is, by far, the biggest player in Canada's forestry sector. In 2000, the sector accounted for 95,000 jobs in Quebec. By 2010, that number had fallen to 64,000. The latest figures show 59,000 jobs in 2020. Why the decline? It is because the federal government refuses to support the forestry industry.
I would like to give members a very simple example. In the forest sector, no support is ever provided by Canada Economic Development for Quebec Regions or any federal government program for primary processing. Why is that? Whenever primary processing is involved, people are automatically told to go through Global Affairs Canada to request federal government support and, de facto, the request will be refused. Let us try to name another sector of economic activity unable to obtain any federal government support. They are few and far between. However, this is what happens. The federal government does not want to address this issue.
For small and medium-sized lumber mills that produce roughly 300,000 cubic metres a year, the main customers are local, in other words, in Quebec or Canada. Even if they do not do business with the United States, they are paying a heavy price for the trade dispute we are in, because they cannot get federal government support. The government bragged about planting two billion trees. Does anyone know why the government is having trouble sending those trees to the forestry people who could plant them? It is because there is a fear that they will be harvested. If those trees are harvested, the federal government says that would violate its trade agreements with the United States. That is fear for fear's sake. They are essentially saying that since those trees might be harvested in 70 years, we might as well not plant them. That shows how much courage the federal government has.
In closing, I would say that this is a sad spectacle, one that has been going on for more than 20 years. There has never been any real willingness on the part of the Liberals or the Conservatives to support the forestry sector.
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- Apr/8/24 8:23:14 p.m.
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Mr. Chair, I am pleased to have the chance to rise in the House tonight, because I feel it is important to take part in this debate, which is more important than the solar eclipse. I say that because the forestry industry, sawmills and softwood lumber are important to the economy of Abitibi—Baie-James—Nunavik—Eeyou.
On February 1, the U.S. Department of Commerce announced plans to substantially increase the countervailing and anti-dumping duties it levies on Canadian softwood lumber. These duties could nearly double starting in August, with major negative consequences for us and elsewhere in Quebec and Canada.
As we know, the forestry industry has already been impacted by the forest fires that raged last summer. Some 4.5 million hectares of forest burned. As a result, local sawmills have had to slow down production or simply stop altogether. For example, at the end of March, Resolute Forest Products announced that it was suspending operations indefinitely at its sawmill in Comtois, near Lebel‑sur‑Quévillon. Members will recall that this town was hit hard by the forest fires, and all residents had to be evacuated because the town was in danger.
The company blamed the weak lumber market and the rising cost of raw materials in the wake of last summer's wildfires. About 50 workers at the Comtois sawmill alone have been affected. Imagine how many more workers could be affected if the U.S. raises its countervailing and anti-dumping duties on softwood lumber. These are difficult times all round, and the government has an obligation to take action and find a solution to prevent these increases. All these good jobs have to be saved. As everyone knows, the cost of food and housing has gone up and is still going up. Now more than ever, families need to hold on to their sources of income.
The traditional approach, where the government issues a press release expressing its disappointment or challenges U.S. decisions in court, is not working. The government must do more and support our forestry sector more than ever. The Bloc Québécois urges Ottawa to staunchly defend Quebec's forestry industry in the face of increased U.S. tariffs on softwood lumber. It demands that the government step up and immediately implement concrete measures to protect the forestry industry from U.S. trade tactics.
Time is running out, and it is appalling that the federal government has still done nothing to support Quebec forestry companies facing a sharp increase in tariffs on Canadian softwood lumber imposed by the United States. As a key trading partner of the U.S., the federal government has a responsibility to secure acceptable trade terms for the representatives of the Canadian forestry industry, a sector that is strongly represented in Quebec.
Forestry is the economic backbone of many regions in Quebec, including my own. It accounts for thousands of jobs and a large portion of our exports. As I mentioned earlier, the forestry industry was hit hard by last summer's wildfires, and the same thing could happen again this year. Our forestry industries are facing a number of financial challenges, including trouble getting access to liquidity. The situation is fragile and could easily fall apart if our industry does not receive the necessary support. The federal government must act responsibly and intervene quickly on softwood lumber.
The Bloc Québécois is proposing meaningful steps that this government must take. First, the federal government must truly help the forestry industry get through the crisis with a loan and loan guarantee program, to match the amounts being withheld by the United States in taxes. Second, it must work to amend CUSMA, the Canada-United States-Mexico Agreement, to better frame the litigation process and to no longer allow for unfair delay tactics. Third, it must call for a tax exemption for wood from private forests since the American lobbying allegations have to do only with the public forest. Fourth, it must recognize Quebec's forestry system, which operates via auction and is consistent with the requirements of free trade.
The conditions are right for the government to make the case to the U.S. government that it needs to end its unwarranted tariffs, which are harmful for both our economy and its own. Also, it is important for the government to make the U.S. understand that in trying to protect their forestry sector, the Americans might end up hurting their own economy by causing the price of building materials to increase in the U.S., preventing thousands of American families from becoming homeowners.
Let us protect our regions, our economy and our forests for a better future.
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- Apr/8/24 8:45:31 p.m.
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Mr. Chair, since my riding bears the name of our national emblem, which is a tree, I am especially interested in the softwood lumber debate, even though maple is not a softwood. Softwood lumber plays an important role in all the regions of Quebec.
It was high time that we had a debate like this one in the House of Commons to talk about the importance of softwood lumber and the Liberals' incompetence and lack of ability and will when it comes to finding a solution to the dispute we are in with the U.S. over countervailing tariffs on softwood lumber.
This is nothing new. Since the early 1980s, the United States has been desperately trying to keep Canadian lumber out and to enable Americans to benefit from top-quality wood at very good prices by imposing unfair and unwarranted countervailing duties.
Since the 1980s, there was a time when we had an agreement with the U.S. and things were going well. That was under the Harper government, from 2006 to around 2016. However, unfortunately, right after the current Prime Minister got elected, we saw the government's will to find a solution for this industry, which is important to all regions, especially in Quebec, wither away to nothing.
The forestry industry is important to Quebec's regions. In the Lower St. Lawrence, there are 33 municipalities where the forestry sector accounts for 10% or more of local jobs. In Chaudière-Appalaches, there are 28 municipalities like that. In Abitibi-Témiscamingue, there are about 20 municipalities where more than 10% of workers are directly employed in the forestry sector. In the Eastern Townships, there are 17. In Saguenay—Lac‑Saint‑Jean, there are 15. That is the reality. These are people who have to live with the daily reality of U.S. countervailing duties. Every day, they wonder if these duties will end up killing their industry, their future and, by the same token, their community.
If we look at the share of employment in Quebec's administrative regions and look at the number of jobs in these regions compared to all Quebec regions, some regions clearly stand out. In the Lower St. Lawrence, it accounts for 6% of jobs. In Saguenay—Lac‑Saint‑Jean, the number is 8%. In Quebec's capital region, it is 6%. Yes, even the Quebec City area is impacted. People think that lumber is only produced and processed in remote regions of Quebec, but that is not true. In the Eastern Townships, it accounts for 8.4% of jobs. In my region, Chaudière-Appalaches, it accounts for 12.3% of jobs. It is unfortunate that the Prime Minister has not had the will to find a solution since being elected in 2015. It is sad because these are jobs in the regions. Is it because the Prime Minister prefers to represent people in big cities, where there are more elected officials from his political party? It would be a shame to think so. Unfortunately, the facts bear this out.
I may be about to tell my colleague from Châteauguay—Lacolle, the only one speaking for the Liberals this evening, something she never knew. We have not heard from any ministers or parliamentary secretaries about this situation, about the problems facing the softwood lumber industry in Canada and Quebec. Let me give a few figures. Since 2016, there have been 183 bankruptcies in the softwood lumber industry. In 2020, there were 14 bankruptcies, including 12 in Quebec. In 2021, there were 12 bankruptcies in Canada, including seven in Quebec. In 2022, there were 29 bankruptcies in forestry and logging. Of the 29, 18 were in Quebec. The numbers speak for themselves and demonstrate the urgent need for action.
We cannot allow the situation to run its course just because the market price makes it cost-effective enough for us to still get by. That is not how it works. Someday, the price will drop. Someday, all of these companies being kept alive on life support because of artificially high prices caused by inflation will shut down too.
I implore the Prime Minister to take action, find a solution and reach an agreement. Lastly, I implore him to step outside his office for a bit and go see his U.S. counterpart to come up with a solution for the sake of all regions of Quebec.
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- Apr/8/24 8:52:46 p.m.
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Mr. Chair, I agree with my colleague from Mégantic—L'Érable. The current government is not doing much to support the forestry sector. Even worse is that no government has ever done much to help the forestry sector. Under the last agreement that was negotiated by the federal government, $1 billion was left on the table.
To me, the future does not look bright, because if there were to be a Conservative government, I am not sure anyone in it would be interested in the forestry industry. Never in my life have I seen a single member of the Quebec caucus of the Conservative Party show up at the Standing Committee on Natural Resources and try to advance the issue of wood. I have never seen them there. I have never heard them there. I live in a forestry region. I have never seen them take part in any activity about caribou, tariffs or the forestry sector's urgent request for support. If the past is any indication, I fear that the same thing will happen under a Conservative government. I hope that my colleague can reassure me on this.
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- Apr/8/24 9:16:42 p.m.
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Mr. Chair, I will be splitting my time.
There is a critical issue that has been plaguing Canada's economic landscape for decades: The softwood lumber dispute with the United States. This long-standing conflict has added strain on the livelihoods of countless Canadians who depend on the forestry industry. Softwood lumber, a vital component of Canada's forest sector, especially in Kootenay—Columbia, has been subjected to punitive tariffs by the United States under the pretext of unfair subsidies provided by Canadian governments to their lumber producers. The lasting resolution remains elusive due to the inability of the Liberals to close, leaving Canadian lumber producers, both large and small, in a constant state of uncertainty and vulnerability. These duties have devastating impacts on the small lumber producers, and the effects are felt right down to the employee loading wood on a belt, and if one has ever worked in a sawmill, it would be known as the “green chain”.
The forestry sector is 10% of the workforce in Kootenay—Columbia. The only industry larger is steel coal. Despite promising to prioritize the softwood lumber dispute and to work toward a fair and equitable solution, the government's actions have fallen short of expectations. Time and time again we have witnessed a lack of strategic foresight and proactive engagement from the current government, leading to prolonged periods of uncertainty and frustration.
Softwood lumber was not mentioned in the 2019 budget and, in 2021, I specifically asked the minister to take a stance to protect Canadian workers and the forestry industry. Here we are three years later with no action. The lack of action directly relates to the capital investments in mills when no agreements are in place. Just the other day, I was in Salmo, talking with the owner of a cedar mill. He is ready to invest $10 million into modernization, but with no solid agreement in place and access to fibre, it is difficult. It is not only Porcupine, but also ATCO, Huscroft, Kalesnikoff, McDonalds and Galloway. Those are generational mills that contribute significantly to our communities and that know how to sustain the environment for future generations.
Instead of leveraging diplomatic channels and trade negotiations to secure a favourable outcome for Canadian lumber producers, the Liberal government is stuck in a cycle of inaction. Its failure to effectively address the underlying grievances of the United States, coupled with a lack of decisive action on the home front, has only made the situation worse, leaving our forestry industry at the mercy of arbitrary tariffs and of protectionist measures. The absence of any sort of plan to the softwood lumber issue has undermined Canada's credibility on the international stage and has shaken the confidence in our ability to safeguard the interests of our citizens. In the face of mounting economic pressures and global uncertainties, there is a need right now for strong and principled leadership, and that has never been more apparent.
Canadian manufacturers are currently facing the longest period without a negotiated settlement in the U.S. softwood lumber dispute, resulting in the accumulation of nearly $10 billion in countervailing duties and duty fees. This ongoing issue has significantly impacted the industry, creating challenges and skepticism in the process. After speaking with the Interior Lumber Manufacturers' Association, we found that value-added producers are facing another unique challenge when it comes to the softwood lumber dispute. They pay duties based on a higher sale price. As a result, it costs them more money to manufacture. When a raw material leaves Canada and goes to the U.S., we lose that. We used to have, in 2006, under a Conservative government, a $500 per thousand board feet maximum duty. That was it. Now, we do not have that, so these high-end products are more expensive.
What is the Liberal plan moving forward? It is imperative that the government takes immediate action to resolve the softwood lumber dispute by engaging with our American counterparts. The softwood lumber issue represents a glaring failure of leadership on the part of the Liberal government. It is time for the government to step up to the plate, to demonstrate true commitment to the interests of the hard-working folks in the forest industry and to finally put an end to this dispute.
How long will Canadians have to wait for the government to deliver on its promises?
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