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American sawmill owners ask for quicker enforcement of U.S.-Canada lumber agreement

By Diana Bowley, BDN Staff
Posted July 13, 2011, at 6:32 p.m.
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DOVER-FOXCROFT, Maine — It’s tough enough for American sawmills to compete when the lumber industry is depressed by the economy; it’s still tougher when foreign competition has the competitive edge because of government subsidies.

The United States and Canada signed a Softwood Lumber Agreement in 2006 that would level the playing field for sawmills in both countries, but that playing field is hardly level because the Canadian government continues to subsidize its forest industry.

“Since we implemented this agreement in 2006, the Canadian government has continued to heavily subsidize its forestry industry, undercutting U.S. softwood lumber products and slowing production at mills around the nation,” Sen. Olympia Snowe said this week in a prepared press release.

In 2009, Snowe urged President Obama to address the agreement during his meetings with Canadian Prime Minister Stephen Harper in Ottawa. In January of this year, the U.S. Trade Department formally requested arbitration proceedings with Canada to stop British Columbia’s violations. This dispute is currently under review by the London Court of International Arbitration.

Luke Brochu, president of Pleasant River Lumber Co. in Dover-Foxcroft, was among sawmill owners who met recently with Snowe and U.S. Trade Representative Ron Kirk in Washington, D.C., to push for swifter enforcement action when violations occur.

“Our friends to the north have a way of procrastinating and making things stretch out and during that time we’re suffering,” Brochu said Wednesday, of the violations. Brochu’s family-owned and operated sawmill employs 90 people and produces 90 million board feet of lumber each year. That lumber is sold mostly on the East Coast, the megalopolis from Portland to Richmond, Va., he said.

The lumber industry is “terribly depressed” because of the lack of construction going on, Brochu said. And with what little demand for lumber exists, the Canadians have the competitive edge because they get subsidized, he said. In British Columbia, for example, wood is being purchased for 25 cents a cubic meter while some of the operations in the Northeastern states are paying more than $20 a cubic meter, he said. “It makes our life very difficult,” he said.

To survive the disparity and the poor market, Brochu said his company has been operating as lean as possible and hasn’t had to lay anyone off, but it has experienced periods of financial loss.

Brochu doesn’t see a turn-around in the market soon. “We’re not seeing any improvement in the housing sector,” he said. ”Indications are that it’s going to drag on until 2013 is what we’re starting to hear from our economists.”

What would help American sawmills like his, Brochu said, is quicker enforcement action when violations have been identified by the U.S. Trade Department. If a violation occurs, then the United States should immediately place duties on the lumber.

“In essence, we’re competing against the governments of Canada; we’re private business competing against governments of Canada,” Brochu said. “They shouldn’t be getting government subsidies and we say they are.” His business does not have the luxury of subsidies so his company pays the price for the wood and then competes on the marketplace with a foreign business that basically has received their logs free, he said.

Brochu is optimistic, however, that the government will react quicker on the violations in the future. “I’m just very thankful that our delegation, Sens. Olympia Snowe and Susan Collins and Congressman Mike Michaud, have been very supportive. We very much appreciate it,” he said.

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  • Anonymous

    Are you sure about the information submitted here as facts?

    In the last 150+ years, of all the small number of irritants between Canada and the United States, softwood lumber disputes have easily been the worst enemy of smooth and friendly relations beween our two truly really great countries.

    The long and rotten history of friction between Canada and the US over softwood lumber began with the Reciprocity Treaty of 1854 between Canada and The US. This very good treaty that benefited both sides  was abrograted in 1866 by the United States because powerful US SPECIAL INTERESTS, as usual, got their way. In 1866 the deadly and toxic and counterproducuctive special interst lobby couldn’t use arguments that Canada dumped or subsidizes it’s industry because no such arguments could be made then. Instead they accused Canada of all sorts of dastardly behavior including supporting the South during the Civil War! A charge belayed by the more than 50,000 Canadians who fought on the Union side in that war.

    Ahh how history would have been different between our countries but for the powerful US softwood lumber special interest lobby of the the 1860′s, 70′s 80′s and 90′s.

    Anyway,the 1854 treat was abrogated  by the USA, and Canada went immediatly into Confederation and became a country and then began a long protrated period of protectionism between our two countries with an occassional deal here and a thaw thewr. But Free Trade really wouldn’t be again considered for another century until a prsident with the courage of Ronald Reagan came along.  

     Still the US SPECIAL INTEREST SOFTWOOD LUMBER LOBBY GROUP almost derailed the entire Canada US relationship as the Free Trade Agreement progressd. The worst crisis occured when the United States lost both at GATT and in the binding dispute settlemet mechanism of the FTA (Free Trade agreement). The United States not abiding that ruling had to be the single most largest cause of friction for 15 years between the US and Canada as almost a generation of Canadians were brought up being told by Canadian left-wing that the the US doesn’t honour their  signatures on agreements. For us pro-Americian Canadians it was the  worst way it could all have been handled.

    Beware, don’t let SPECIAL INTERESTS derail the most important relationship in the world!

     

  • Anonymous

    The Goverment isn’t going to help the businesses in the State of Maine. Our politicians have already cost every town in Maine their  industries in the name of fair trade and know they won’t except the fact that they have put so many people out of work their is no longer enough money going into the federal treasury to support the goverment.

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