Gordon Hamilton
Sun
American homebuilders warned Tuesday that they will abandon Canadian lumber for European and Russian products if Canada “knuckles under” to the U.S. lumber lobby and signs a softwood agreement that includes taxes or quotas.
The head of the powerful National Association of Home Builders said Tuesday that Canadian officials have indicated in briefings that a tax or quota system is on the way.
NAHB president Jerry Howard described the homebuilders as a “staunch ally” of Canada in the softwood fight. But if Canada quits now, the alliance is over, he said.
A border tax or quota system would increase the cost of Canadian lumber and disrupt supply, forcing homebuilders to consider overseas imports to re-establish certainty.
The legal battle over softwood is essentially finished and Canada has won, he said. Howard said he is ashamed that his own government has not accepted rulings by North America Free Trade Agreement panels, but he is now concerned that Canada may be giving up.
“If you are going to knuckle under … if your government chooses to pursue another course, I have to ensure to the best of my ability that our members — the American homebuilding industry — do not run into a shortage of lumber or do not run into untenably high costs for their lumber,” Howard said in a telephone interview.
Howard said he is concerned, based on reports he has received from the Canadian embassy and trade officials in Ottawa, that a negotiated settlement to the lumber dispute is likely to include either a border tax or import quotas.
He said one official told him negotiations will begin soon. The outcome, the official told him, would be that “everybody always gets a little water with their wine.”
The trade dispute “doesn’t sound like it is moving in any direction that we are happy about,” he said. “We have been told by people up in Ottawa and by officials here in Washington that they are going to start negotiations.
“And we have all been told that those negotiations are going to lead to some sort of a quota or tax on Canadian lumber that we, as the ultimate consumers, would have to pay.”
He said he met recently with a delegation from Russia interested in introducing Siberian pine lumber into the U.S. market.
The NAHB has 235,000 member companies that consume 80 per cent of the homebuilding lumber sold in the U.S. Canada currently has a 34 per cent share of that market. Imports account for five per cent.
David Gray, co-chair of the Free Trade Lumber Council, which represents Canadian lumber companies, said European imports are a threat, but if a quota is imposed he understands Canada would be assured a fixed share of the U.S. market.
That means European inroads would be at the expense of the U.S. lumber industry.
“So far, their lobby hasn’t been sufficient to overcome the [U.S. lumber] coalition’s lobby, and in the meantime we have to get on with the future,” Gray said. “We take his comments and advice, but we have a lot more at stake. We have to make our future ourselves.”
European imports first began to make inroads into the U.S. market during the 1996-2001 softwood lumber agreement that imposed quotas on Canadian shipments. They have been growing at 30 to 50 per cent a year since.
© The Vancouver Sun 2006
