Last increase
in Canadian
creates chaos in
forestry sector and raises serious concerns about the future of its exports.
Chris Spencer, manager of the Southern New Brunswick Forest Products Marketing Council, which represents more than
— said that cumulative countervailing duties and tariffs, now reaching 45 percent, are putting significant pressure on
.
“Not many margins can withstand this type of tax or fee,” he said. “Personally, I believe this is enough to devastate an entire sector here in the Maritimes and potentially across Canada.”
Earlier this week, US President Donald Trump announced
on Canadian softwood lumber, but he used
causing widespread confusion among manufacturers and U.S. border officials, Spencer said.
He said some truckloads of hardwood crossed the border Wednesday believing their products were exempt. This assumption turned out to be incorrect.
“We've had cases where trucks have turned around at various border crossings because customs officers didn't know what products were in them,” Spencer said. “At some crossings we were told that only softwood roundwood was affected, while at others we were told that all forest products were affected.”
He said there were different interpretations at each of the four main international border crossings between New Brunswick and Maine, leading to supply delays and widespread uncertainty throughout the sector.
“Chaos is an understatement,” he said. “It's one thing to face a tough market. It's worse when you don't even know what rules you're playing by.”
David Campbell, a New Brunswick economist, said a 45 per cent tariff is unsustainable because New Brunswick's forestry sector is heavily dependent on U.S. markets.
“There will be more sawmill closures across the province, at least on a short-term basis, which will disrupt production,” he said, adding that this has a ripple effect downstream as there are not enough by-products to make paper products, for example.
The US is the largest market for
wood, lumber and paper products
The annual value of New Brunswick's output is estimated at $3.74 billion a year, according to Campbell's economic impact report for Forest New Brunswick, a non-profit industry association representing the province's forestry industry.
About 45 percent of the industry's export value goes to other Canadian provinces, and 80 to 90 percent of international exports go to the United States, the report said.
“We produce far more lumber and paper than the Canadian market can handle,” Campbell said. “Without access to the U.S., companies may be forced to reduce capacity.”
The SNB is the largest of the seven forest products marketing boards in the province and represents producers who operate exclusively on private lands, which account for about 30 per cent of New Brunswick's forest area. Many of these manufacturers export their products directly to Maine, supporting factories on both sides of the border.
Spencer said the uncertainty had already disrupted long-standing contracts with major buyers such as
(JDI), the province's largest logging company.
He said his members typically enter into four-month supply agreements with the company, but their latest contracts are for just 10 weeks, a direct reflection of the uncertainty.
“Even they don't know what's coming out of Washington,” he said.
U.S. factories may benefit in the short term from less competition in Canada, but Spencer said the long-term impact of higher tariffs will be felt by American consumers.
“This is pure protectionism,” he said. “And at the end of the day, it will be U.S. home buyers who will pay more for lumber.”
Spencer said some Canadian producers on both sides of the border may be able to mitigate their losses, but most cannot adjust quickly enough.
“We've learned a painful lesson: We can't find new clients fast enough and we can't make long-term investments if we don't know the rules,” he said.
Spencer said the escalating trade dispute underscores the urgent need to renew the Canada-United States-Mexico Agreement (CUSMA) to resolve the softwood lumber dispute.
“This cannot continue,” he said. “The forestry sector supports thousands of jobs and we need a long-term and respected agreement, not just a band-aid solution.”
Meanwhile, JDI continues to expand its presence in the United States, opening facilities in Georgia, New York and Maine. Its subsidiary, Irving Tissue Co. Ltd. announced last year it would invest $600 million to expand a tissue manufacturing plant in Georgia, creating 100 jobs there.
Campbell said he believes companies like Irving are lobbying U.S. legislators – especially in Republican states – to be recognized as integrated North American companies rather than foreign exporters.
“This is no longer just a Canadian operation,” he said. “These firms create jobs in the U.S. That's a strong argument for tax exemption.”
The new tariff hikes have also reignited a familiar U.S. rift between domestic timber producers, who support higher tariffs, and the U.S. homebuilding industry, which warns that such measures are driving up home costs.
“Homebuilders don’t want lumber prices to skyrocket; it reduces housing affordability,” Campbell said. “We've seen this tension before, and it could be the key to finding a solution.”
The National Association of Home Builders previously called on the US administration to avoid excessive tariffs on Canadian softwood to prevent rising construction and housing costs.
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