Evidence of meeting #34 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tariffs.
A video is available from Parliament.
2 p.m.
Liberal
The Chair Liberal Judy Sgro
I'm sorry, Mr. Aboultaif. Your time is up.
The last questioner for the minister—we thank you for staying the full hour, Minister—will be Mr. Sarai for five minutes.
2:05 p.m.
Liberal
Randeep Sarai Liberal Surrey Centre, BC
Thank you, Madam Chair.
Thank you, Minister, for coming again.
As you have heard, for British Columbians, softwood is a huge deal. It's $12 billion in our economy and one in 16 jobs. My father worked in the sector. Every uncle in my family has worked in that sector, especially in the first generation that migrated to this area. I believe that my riding has the largest number of softwood lumber employees in the country, and along the entire Fraser River, we have tons of mills.
Canada has been struggling with this issue for decades. It's not a new problem. Softwood lumber agreements come. They have a short time of stability, and then they break apart and tariffs come up. This takes years, and then it's resolved again. This time we won, just recently, in August of last year. Why is the U.S., despite losing at the WTO, coming back again and raising tariffs from 10% to 19%, almost doubling them? What's their argument? I'm trying to think of what the rationale is for what they're trying to do.
2:05 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
Thank you so very much for that question.
In response to this latest review, we have certainly said to the United States that an increase would really be equivalent to a tax on the American consumer and the American home builder. We will continue to make this argument, while at the same time defending the industry through the appropriate channels.
It's also really important to highlight that while we are defending these actions, we are also working with the industry, and have been, starting from when we first got here as government. When the first U.S. duties were imposed in 2017, we invested $867 million on a softwood lumber action plan, and in budget 2019 we added another $250 million over three years. During COVID-19, 8,500 firms in the forest sector benefited from the Canada emergency wage subsidy so that they could keep workers on the payroll. That was about a $600-million support.
We're also helping accelerate the adoption of transformative technologies and products that the sector itself is working on. This is through an $82-million investment to help the sector accelerate and to transform through the forest industry transformation program. There's another $12 million specifically for economic opportunities for indigenous communities in the forest sector.
We're working whole of government, certainly with the sector—
2:05 p.m.
Liberal
Randeep Sarai Liberal Surrey Centre, BC
Minister, I'm trying to see whether it is the department that's doing it or whether the industry in the U.S. is really pushing them hard.
We've now had a regime change, a government change, and still this has happened again. Is it the industry that's pushing hard?
With that, I have a follow-up question.
Are we looking at retaliatory tariffs or measures if this continues? Is that an option that's on the table, or a tool in the tool chest?
2:05 p.m.
Liberal
Mary Ng Liberal Markham—Thornhill, ON
I want to thank you for that. The administrative review, of course, is done by the Department of Commerce, and they do this through a regular cycle.
It is encouraging to hear Secretary of Commerce Raimondo say that she understands how the review and its potential increase in tariffs will actually affect American consumers and home builders. She has publicly said that she would work with Canada, so that's encouraging.
Our job here is to make sure that we are defending the interests of our companies and the sector against this review and against the tariffs that have been applied.
2:05 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Minister. Thank you so much for giving us that extra 12 minutes after we started late.
Your officials will remain and we will continue our work as a committee.
Thank you again, Minister.
2:10 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Thank you.
To our officials, you likely heard the last hour and a bit of discussion. The one thing I don't think the minister really discussed at all was the difference in stumpage rates. I think that's the core of the issue.
Is the difference from province to province, and the difference in monthly, quarterly and annual rates, not the core of the issue we're talking about here today?
June 4th, 2021 / 2:10 p.m.
Arun Alexander Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Honourable member, thank you very much for that question.
Madam Chair, I think—
2:10 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
I have a point of order, Madam Chair.
There is a problem with the sound, so the interpretation has stopped.
2:10 p.m.
Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Should I continue?
2:10 p.m.
Liberal
The Chair Liberal Judy Sgro
No, Mr. Alexander. Hold on a minute until we make sure we have translation.
2:10 p.m.
The Clerk of the Committee Ms. Christine Lafrance
Madam Chair, I think we need to suspend for a couple of minutes.
2:10 p.m.
Liberal
2:15 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you, everyone, for your patience here.
Mr. Lobb, we're going to start over with you, so you have your five minutes.
2:15 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Thank you, Madam Chair.
Maybe I'm wrong here, but everything I read talks about stumpage rates. I think Alberta's rates are about five times what New Brunswick's rates are. Some are set yearly and some are set quarterly and some are set monthly.
I'm for Canada, obviously, but in the U.S., is this not really the heart of the issue?
2:15 p.m.
Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Madam Chair, as the minister noted, the softwood lumber dispute with the United States has been going on since probably the early 1980s, and I think the honourable member did hit at the crux of the dispute, which is a difference in forest management practices.
The majority of forest land in Canada is Crown-owned land, publicly owned land, while the majority of forest land in the United States is privately owned. The U.S. Lumber Coalition, which is the main driver in the United States industry for this dispute, contends that the difference in stumpage fees between what is charged in Canada for harvesting on public land and what is charged in the United States for harvesting on private land is a subsidy. We do not agree with this whatsoever, so I think that is the crux of the issue.
2:15 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Right, but when you see what the rate is in Alberta versus New Brunswick.... You've talked to some of your counterparts in both provinces. Have you ever had the discussion about why there's a difference of $130 per cubic metre?
2:15 p.m.
Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Madam Chair, I think the price for stumpage fees is dependent very much on the circumstances in each province. What the United States Department of Commerce has done—
2:15 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
I'm sorry to interrupt you, but this is a North American market, and the contention is not from each province. The contention is not on how each premier or minister views it. We are in a North American market here, so I can't imagine the trade commission in the United States has much sympathy for that argument, do they?
2:15 p.m.
Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
The argument is—and our contention is—that it should be based on the circumstances of each province, and that's what we argue to the Department of Commerce.
The United States is using a Nova Scotia benchmark for all provinces from Atlantic Canada to Alberta, and using a Washington state benchmark for lumber produced in British Columbia, so we totally disagree with the use of a Nova Scotia benchmark and argue vehemently with the Department of Commerce that the benchmark that should be used should be individual for each province. That would adjust for the circumstances in each province.
2:20 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
What's the price of a cubic metre of a comparable in Louisiana versus Saskatchewan or Alberta? I know there are a million different varieties, but what is it on average here?