With the election in the United States now over and the incoming administration of Donald Trump beginning to take shape, industries across Canada are trying to figure out what the president-elect’s promise to overhaul the United States’ trade deals and relationships for his country’s benefit will mean for them.
This is true for the lumber industry in Northern Ontario, which sells a great deal of its product to the United States to fuel the housing industry there.
Industry groups are treading carefully, with the Ontario Forest Industry Association flatly refusing to discuss Trump or his trade policies when contacted Monday by The Daily Press.
EACOM, which employs hundreds of forestry workers across the North, including more than 130 sawmill workers in Timmins, is watching the changes south of the border closely.
“Certainly, it’s not good to have any amount of uncertainty, and now we have a lot of uncertainty. We have a lot of uncertainty around what Trump is actually going to do, what could happen with an agreement and how the markets might react,” said Christine Leduc, director of public affairs for EACOM.
During the election campaign, Trump focused most of his ire on the North American Free Trade Agreement, which he repeatedly declared to be “the worst trade deal ever.”
The president-elect has vowed to renegotiate or rip up the agreement which created a free trade zone between Canada, the US, and Mexico.
Prime Minister Justin Trudeau has already signalled his willingness to reopen the trade agreement with Trump.
Reopening negotiations on NAFTA won’t necessarily affect the forest industry in the Timmins region, which is much more concerned with the softwood lumber deal between the Canada and the U.S. — a completely separate matter from the free trade agreement.
Canada and the U.S. have been trying to negotiate a new deal on softwood lumber after the last one expired in October of last year, but with no success.
“There was this period of free trade for a year (after the deal expired), which was supposed to give both countries time to renegotiate a new agreement. We did have quite a bit of negotiation with Canada putting its best foot forward,” explained Leduc. “Unfortunately, an agreement was not reached. And now we are beyond the deadline of the standstill, which would have been in October of 2016.”
Companies still have free trade of softwood lumber with the U.S. only because the Americans have not taken any action to stop it, yet.
Both countries are still negotiating a deal despite going over every single deadline for making progress on it.
Leduc said EACOM is hopeful that deal could still be reached during what is known as the “lame duck” session of the United States Congress, which is the period between their election in November and when the new president and next Congress take over in January.
“Certainly we would be hopeful that a deal could be reached. But if one can’t be reached, we would like to see how softwood lumber would be treated in any NAFTA negotiations,” she said.
MP Charlie Angus (NDP — Timmins-James Bay) believes the Liberal federal government has badly mismanaged the softwood lumber issue, and has put the entire industry in peril by failing to get a new deal with the U.S. when they had the much more globalist Barack Obama in office.
“This government has dropped the ball. They had an opportunity with Obama. The Prime Minister had good relations with the Obama administration, but they just didn’t seem to be making softwood lumber a priority. Instead, we’ve seen the government focusing all of its energy on the Trans-Pacific Partnership and the Canada-European Union Comprehensive Economic and Trade Agreement, which could have both positive and negative consequences,” said Angus. “We need to get softwood lumber done, and if we don’t get it done with Trump, we may be in for a real rough ride.”
Angus worries that without a deal in place, the softwood lumber industry will find itself one of the targets of Trump’s protectionist trade policies, which will hurt mills in the North.
Leduc said no matter what happens, the one reason for optimism is the fact that the U.S. needs Canadian softwood lumber because it isn’t capable of producing enough to meet its own demand.
“The U.S. housing market is really what drives North American lumber production, and Canada has long been the largest source of imports to the U.S.
“So if they’re not going to get it from us, what would that do to the housing economy?” asked Leduc. “So we’re hopeful there will be a recognition of the consumption in the U.S. and the fact that they need Canadian softwood lumber.”