Thank you, Madam Chair and committee members.
We are in Meadow Lake, Saskatchewan, this morning. We are going to be representing the softwood lumber lack-of-agreement, as well as indigenous producers of forest products.
We represent the Meadow Lake Tribal Council, located in northwest Saskatchewan. We're the only major 100% indigenous-owned softwood lumber producer in Canada—that is NorSask Forest Products—and we have significant exports to the United States.
We recognize the current agreement. Of course, softwood lumber is not part of that agreement, but today we are making a representation that we cannot be forgotten in this process. We are uniquely important. MLTC's ownership and successful operation of a 150-million board foot sawmill, which is about a medium-sized sawmill in a Canadian context, with annual revenues of approximately $60 million, for over 22 years has been a wildly heralded benchmark of successful indigenous forestry and forest product manufacturing in Canada and internationally.
NorSask is a survivor. We weathered the multi-year U.S. housing market collapse in the mid-2000s. It is the only sawmill in Saskatchewan and through much of Canada that did not shut down during the period of 2007 to 2012.
We are continuing to be impacted by punitive U.S. tariffs. This successful forestry icon of stable indigenous economic development continues to be threatened by the effects of ongoing trade tariffs imposed by the U.S. on Canadian softwood lumber, which commenced in December 2017 at a rate of 20.23%. We encourage the federal government to continue support of the indigenous forest product manufacturing industry in Canada, and we recognize that the federal government does have a constitutional mandate to protect and enhance the economic well-being of indigenous peoples.
Prime Minister Trudeau has indicated that no relationship is more important to him and to Canada than the one with indigenous peoples, and that it is time for a renewed, nation-to-nation relationship based on a recognition of rights, respect, co-operation, and partnership. Of course, this should include support of aboriginal or indigenous ownership of businesses such as NorSask.
The federal government is uniquely responsible. It is the agent responsible for resolving lumber wars and negotiating the deals of managed softwood lumber agreement outcomes on behalf of Canada. The Canada-U.S. lumber trade arena is dominated and influenced by the interests of the largest lumber producers in Canada. Of course, in the last few years, most of these large lumber producers have strategically expanded operations into the U.S. south. Independent indigenous lumber producers wholly based in Canada, such as ourselves, end up as collateral damage and are significantly disadvantaged in these trade wars.
On November 25, 2016, the U.S. Lumber Coalition filed a petition asking the U.S. Department of Commerce to investigate Canadian softwood lumber shipments with the intent of levying punitive duties and taxes, and in December 2017, this was implemented.
The parliamentary Standing Committee on International Trade in 2016 recognized in its consultations regarding negotiations around softwood lumber with the United States that they should include stakeholders that may have been overlooked in the past, especially aboriginal stakeholders and small producers.
It is our view that indigenous-owned lumber producers and exporters are disproportionately impacted by any trade action related to softwood lumber. Small indigenous lumber producers require special consideration and protection from this trade action.
Briefly, I will provide a few statistics on NorSask. We're 100% indigenous-owned. We're located in Meadow Lake, Saskatchewan. The shareholder is the Meadow Lake Tribal Council, representing nine first nations with a population of about 13,000 members. It's been 30 years of progressive ownership and economic growth in the forestry sector. We produce 150 million board feet of premium softwood lumber each year. Seventy per cent of this is exported to well-established customers in the midwestern United States. Our fibre source is fully certified to the highest standards in Canada and internationally, including those of the Forest Stewardship Council. We are a globally recognized model of a sustainable, indigenous-owned forestry enterprise.
I would like to say a few words on employment. Indigenous employment in Saskatchewan in the forestry sector is the highest in Canada at 30%, and in northwest Saskatchewan the percentage is 65%. This is a tremendous contribution to the local economy. We may be small in a Canadian context, but we are very significant regionally. In terms of a model of good outcomes, in terms of indigenous forestry, we're the high point in the Canadian landscape.
Here is a quote from Shane Vermette, our executive director of the Ministry of Energy and Resources in Saskatchewan. He said, “Saskatchewan leads Canada, and MLTC leads Saskatchewan, by far when it comes to indigenous forestry business development, indigenous employment in the forestry sector, and percent of annual allowable cut allocated to indigenous businesses.”
Our markets are into the U.S. We are landlocked. We have very limited opportunity to get offshore, so the U.S. market is critical for us. We reiterate the need for a managed outcome to the current trade dispute.
Some of the issues I'd like to highlight are that the current U.S. trade action has been miserable for indigenous lumber producers. Despite weathering prior softwood lumber wars, and in particular the housing crash, the current softwood lumber trade action by the U.S. and imposed tariff regime has produced significant hardship for NorSask Forest Products. NorSask has made deposits related to these countervail and anti-dumping duties of approximately $11 million in the last three years. It is our desire that these funds be returned in their entirety to the Meadow Lake Tribal Council as soon as possible.
Our mid-continent location limits access to offshore markets. Saskatchewan is far from the Asian markets and we cannot compete with the Alberta and B.C. lumber producers with respect to these markets. NorSask needs ongoing unfettered access to its U.S. lumber customer base to maintain operations.
The other issue is the small volume of lumber exported to the U.S. from indigenous-owned lumber manufacturing facilities in Canada is clearly not a threat to the U.S. lumber producers and is not the cause of the current softwood lumber dispute. Indigenous lumber producers cannot be collateral damage in a dispute aimed at the larger producers in Canada, who incidentally have also managed to mitigate their situation by purchasing sawmills in the U.S. south.
Indigenous lumber producers generally are standalone enterprises that lack geographic diversity, business diversification into pulp, paper and other products, and market options enjoyed by our larger competitors and peers. NorSask, as an example of the sustained successful outcome of indigenous business development in the forestry sector, has required decades of thoughtful nurture and incubation, and this successful investment in economic development cannot be lost due to these trade actions.
For example, NorSask represents one half of 1% of Canada's lumber exports to the U.S. We're clearly no harm or threat, yet we're included in the same bucket that holds the rest of the producers. A solution to this would be that, in future arrangements with the U.S., indigenous lumber producers are exempt from tariffs, duties and quota limitations.
The special measures that we ask for are, first, that the federal government ensure that wholly indigenous lumber producers receive 100% of their tariff deposits back as soon as possible, which in our case is $11 million. Any profits generated from operations go directly back to the nine first nations and are used for housing and other underfunded aspects of their programs.
Second, we ask that the federal government provide accommodation to wholly indigenous-owned lumber manufacturing facilities in Canada that export to the U.S., such that they be excluded or not subject to duties, tariffs or quotas under any trade action for future softwood lumber agreements.
Last, we ask that the federal government continue to provide mechanisms for financial support to assist indigenous softwood lumber producers, so that they survive these lost revenues caused by these unfair trade actions.
Thank you, Madam Chair.