Severe impacts of canadian lumber subsidies and dumping

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March 26, 2002 202.862.4505

Deborah Regan




ITC Hears of Job Losses and Mill Failures from Canada’s Unfair Trade Practices

WASHINGTON, DC – Canada’s timber subsidies, production quotas and lumber dumping show how unfair trade practices are wreaking havoc on U.S. lumber companies, their employees and on forestland owners, said a host of witnesses at a hearing today before the International Trade Commission investigating Canada’s lumber policies.

Lumberman Rusty Wood, President of Tolleson Lumber Company of Perry, GA, told the Commissioners that in the midst of a low interest rates, a housing boom and record home builder profits, U.S. lumber mills are closing, cutting production and laying off employees – while Canada is increasing market share. “My mills are efficient and modern, so on a level playing field we can compete,” said Wood. “But we can’t compete with the Canadian Treasury that gives timber away and mandates lumber production to maintain full employment.”
Bob Mai, National Sales Manager for Potlatch Corp. of Lewiston, ID, said his company recently closed part of its mill because of depressed lumber prices driven down by imports from Canada. “The Canadian cost structure allows them to accelerate production and grow market share in the U.S. while we are shutting down mills on this side of the border,” said Mai.
A. A. “Red” Emmerson, Chairman of Sierra Pacific Industries, said he was forced to shut down his sawmill in Loyalton, CA last year, a state-of-the-art mill that was unable to turn a profit in a year of booming home building. “The reason was the large volume of Canadian lumber in the market, which competes directly with U.S. lumber,” said Emmerson. By pulling down the market price, Canadian producers forced builders to switch to their product.

Canada’s timber subsidies and mandated production requirements give Canadian mills a decisive advantage, said Brenda Elliot, vice president of sales for Temple-Inland Building Products of Diboll, TX. “Timber comprises about two-thirds of production in a U.S. sawmill, so with (Canada’s) low-priced timber and its requirements to harvest and produce regardless of the market, our prices are always depressed by Canadian imports.” Against the subsidized cost of timber, even the most modern U.S. mills struggle to compete. “The reason Canadian producers can ship lumber all the way South to Texas and force our prices down is the subsidized price they pay for government timber and the government production mandates,” said Elliot.

A Maine mill worker testified that subsidized Canadian production is costing U.S. sawmill workers their jobs. William Cody was one of among 70 men and women who lost their jobs when Georgia Pacific Corp. was forced to close its stud mill in Bailyville because of the flood of Canadian lumber dumped on the U.S. market. “My hometown and the surrounding areas are reliant on the wood products industry for jobs, income and tax revenue,” he said. The impacts of mill closures on rural towns are devastating. “When a mill closes,” said Cody, “those workers are generally not able to find another mill job because U.S. lumber mills are not opening these days, they’re closing.” Cody said he didn’t fault mill workers in Canada. “However, the jobs of Canadian mill workers can not come at the expense of ours.”

U.S. forestland owners own the great majority of timberland in the U.S., said Chuck Leavell, a Georgia landowner and the nation’s Outstanding Tree Farmer of the Year. U.S. forestland owners respond to market forces, not government dictates, he said. That means when prices are down, they simply hold timber off the market. Not so in Canada. said Leavell, who has witnessed “an incredible amount of Canadian lumber sold in our own back yard.”

Leavell also debunked claims by some homebuilders that southern yellow pine does not compete with Canadian lumber. “All of the older houses on our land, and most of the newer ones, are built almost completely with Southern Yellow Pine lumber, all of which is in excellent shape today,” he said.
Longer-term, forest landowners can always sell to developers if they lose the lumber market for the trees they grow. “I don’t think any of us want to see America losing our valuable forest lands,” he said. But if U.S. lumber mills keep going out of business because of the flood of Canadian imports, said Leavell, landowners will have few alternatives but to sell – and the result will be more urban sprawl.
On March 22, the U.S. Commerce Department announced combined subsidy and dumping duties against Canadian lumber averaging about 29 percent. The ITC will make its injury determination in early May.
For more information on the U.S. Coalition for Fair Lumber Imports, visit our web site at:

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