The B.C. Liberals are increasingly concerned that the rising threat of lumber tariffs in the United States could generate a punishing fallout for the dozens of B.C. communities and thousands of workers dependent on the forest industry.
“I’m worried,” Finance Minister Mike de Jong conceded during a media scrum this week, reacting to news that the Americans had issued a preliminary finding of unfair trade against softwood lumber imports from Canada.
“I hope it doesn’t happen,” de Jong added, referring to the prospect of tariffs or other restrictions on access to the U.S. market. “Forestry remains a cornerstone of our B.C. economy. Employment-wise, countless communities rely upon our forest sector.”
Though forestry is not the mainstay of the provincial economy it was a generation ago, the government estimates the industry continues to support some 65,000 direct jobs spread over 140 dependent communities.
“Those communities and the forestry sector have done a great job improving productivity (and) diversifying their markets,” said the finance minister. “So we’re not as vulnerable as we might have been 15 years ago.”
Still, any new restrictions on access to the U.S. market could have a disproportionate effect on forest-dependent communities in the north and Interior — the very parts of the province lagging behind the nation-leading rates of job creation and growth of the overall B.C. economy.
De Jong was reluctant to speculate about specific actions that might be taken against Canadian softwood by incoming president Donald Trump.
“The rhetoric has certainly been protectionist,” he agreed, “and, we know this for a fact: there are protectionists in the U.S. who have repeatedly sought to deny American consumers access to the best forest products in the world that we produce more efficiently than anyone else. They don’t like the competition and we’re seeing that again.”
For the past 18 months, B.C. has worked with the new national government of Prime Minister Justin Trudeau to keep the softwood lumber file at the top of the nation’s priorities in dealings with the U.S.
“As a trade issue it should be number 1, and it should be at the top of the list when Prime Minister Trudeau and soon-to-be-president Trump sit down for their inevitable first discussion,” de Jong added.
The B.C. government was encouraged this week when the prime minister elevated Chrystia Freeland to the highest rank of the cabinet, with dual responsibility for foreign affairs and the North American Free Trade Agreement.
In her previous portfolio as minister of international trade, Freeland earned high praise from the B.C. Liberals for dogged pursuit of the country’s effort to renew the recently-expired 10-year agreement to manage the softwood lumber trade.
Though the drive was not successful, the Liberals credit the failure to election-year politics in the U.S., not any lack of commitment on the part of the federal government or Freeland.
Softwood was excluded from NAFTA at U.S. insistence. But at this point the Liberals have no immediate reason to suspect the softwood file will be back-burnered under Freeland or her replacement as minister of international trade, Francois-Philippe Champagne.
For all the need to continue to work through trade and diplomatic channels on the softwood file, the B.C. Liberals are leaning toward communicating directly with the American public as well.
“We tend to talk about the advantages of free trade exclusively from the perspective of Canada — in our case B.C.,” said de Jong. “But there are upwards of 20 million or 25 million Americans who rely upon trade with Canada for their jobs.
“It’s probably time somebody started talking on their behalf and someone started pointing out the price that they will pay — that small-town America will pay — if barriers are erected at our borders.
More to the point would be the impact on a consumer-led U.S. recovery of trade action to drive up the price of lumber, the prime building material in home construction.
Echoing de Jong’s theme later in the week was Premier Christy Clark, when she was asked about the pending inauguration of president-elect Trump.
Riffing on Trump’s many boasts about his job-creating prowess, a reporter asked Clark if she were a greater job-producing politician than he is?
“Well so far,” the premier quipped, before turning serious about her concerns on the softwood file.
“If President Trump wants to improve the American economy, one of the most important things he can do is make sure that Canadian softwood lumber finds its way across the border,” the premier continued.
“And here’s the reason: the American economy is kick-started in almost every instance by residential construction. The only way that he can really kickstart residential construction in the United States is to keep costs low and to get Canadian softwood at the lowest possible cost to builders in America. I think President Trump will understand that intuitively, being a builder himself.”
She hopes. Moreover I gather her government is preparing to help the process along by some sort of advertising outreach to American consumers, perhaps in concert with other Canadian jurisdictions. Worth a try, I guess.
Still, history suggests that at the end of the day, the U.S. government response will be determined, not by American consumers, but by the protectionist interests of the country’s lumber industry. But that is a topic for another day.