As everyone in the world knows, Canada has a new government. Justin Trudeau's Liberal Party trounced Stephen Harper's Conservatives in Canada's national parliamentary elections in September, putting Trudeau, the son of 1970s Premier Pierre Trudeau, in charge of the nation's administration. The New York Times reported the election results here (see: "Justin Trudeau and Liberal Party Prevail With Stunning Rout in Canada," by Ian Austen).
The young and charismatic Trudeau may or may not represent Canada's future. But he will definitely be wrestling with a legacy issue from Canada's past: the long-standing lumber trade dispute with the United States. For a little history on that controversy, see "Do We Have a Deal?" (BuilderOnline, November 11, 2005) and "Untangoing the Trade Mess," (BuilderOnline, February 14, 2006), by Ted Cushman. For a lot more history, there's a lengthy Wikipedia entry on the decades-old dispute (see: "Canada–United States softwood lumber dispute," by various authors).
The Globe and Mail reported on lumber trade's resurgence as an international issue here (see: "Canada’s softwood lumber rematch with U.S. awaits Trudeau," by Barrie McKenna). Wrote the Globe: "Under the terms of the expired deal, the U.S. can’t launch another trade case for at least a year. That means trade is free, for now. But that’s just temporary. As soon as the U.S. lumber industry files a trade challenge, which now seems likely, the U.S. government can slap duties retroactive to Oct. 12, the day the softwood lumber agreement expired. So every shipment of lumber rumbling across the border today does so under a cloud of uncertainty. Producers could later be forced to pay steep duties on those sales, rendering them uneconomic."
It's a wedge issue for American industry. U.S. timber companies and lumber producers don't want to face Canadian competition, which they claim is supported by unfairly low stumpage fees charged when lumberjacks cut down government-owned Canadian trees. U.S. builders, on the other hand, would prefer free trade — because Canadian wood, not to put too fine a point on it, is cheap.
The National Association of Homebuilders (NAHB) is viewing the situation with concern. In a letter to Ambassador Michael Froman, in the Office of the United States Trade Representative, NAHB president Jerry Howard advocated free trade in lumber: "NAHB supports free trade and policies that promote opportunities to obtain access to high quality, stable and affordable supplies of lumber and other key building materials," Howard said, noting that NAHB "did not support the Softwood Lumber Agreement or its extension."
But if the U.S. won't come down on the side of free trade, Howard said, NAHB wants the government to re-negotiate a fair trade treaty in good faith and with input from consumers — especially if the alternative is a side bargain worked out by U.S. and Canadian timber companies on their own that would keep prices high for the benefit of producers on both sides of the border, but cut homebuilders out of the deal.
"Of particular concern," Howard wrote to Froman, "NAHB has learned that producers in the U.S. and Canada are in discussions with each other to address supply, price and other aspects of the Softwood Lumber Agreement in order to make recommendations to the U.S. and Canadian governments on moving forward on a new agreement. However, NAHB has concerns that those discussions may not support the free trade principals that comport with each country’s World Trade Organization and North American Free Trade Agreement obligations. Accordingly, NAHB does not believe that private parties are in the best position to achieve an open and competitive resolution to the softwood lumber dispute."