International Trade Committee on June 4th, 2021

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call the meeting to order.

To everyone, welcome to meeting number 34 of the House of Commons Standing Committee on International Trade. Today's meeting is televised and is taking place in a hybrid format, pursuant to the House order of January 25, 2021.

The committee is meeting today pursuant to Standing Order 108 and the motion adopted by the committee on Friday, May 28, 2021, to discuss the countervailing and anti-dumping duties on the imports of Canadian softwood lumber by the United States.

With us today we have the Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade, and her officials. They are Arun Alexander, director general, North America trade policy bureau; Rosaline Kwan, director general, trade sectors; Colin Barker, director, softwood lumber division; and Michael Owen, acting general counsel and executive director, softwood lumber litigation division.

Minister, we're thrilled that you came back and responded so quickly to the committee. I turn the floor over to you, please.

[Mary Ng, Liberal, Minister of Small Business]

Thank you very much, Madam Chair, for inviting me here. I'm always pleased to speak to the committee. I'm very happy to provide you with an update on Canadian softwood lumber.

Canada’s forestry sector supports over 200,000 jobs in communities across the country, and in 2019 contributed $23.7 billion to our economy, or 1% of Canada’s total GDP.

Let me begin today by stating unequivocally that the duties imposed by the United States on Canadian softwood lumber are unwarranted and unfair, and they hurt workers and industry on both sides of the border.

The duties imposed by the United States on Canadian softwood lumber are unjustified.

The United States has always relied on Canadian lumber products to meet its domestic needs for high-quality building materials, and with this year’s overwhelming demand, this has never been more true.

Last month, the U.S. Department of Commerce signalled, in its second administrative review, the intention to significantly increase duties on Canadian softwood lumber later this year. While the final report and resulting tariff rates will not be in place until November, we are disappointed by this unjustified development.

U.S. duties on Canadian softwood lumber products are a tax on the American people. They make housing less affordable for Americans and hinder economic recovery. An increase would exacerbate the harm being caused to Canadian communities as well as to U.S. home builders and consumers who are dealing with soaring lumber prices.

We are not sitting idly by. I have raised these unfair duties directly at every opportunity possible with President Biden, with U.S. trade representative Tai and with commerce secretary Raimondo.

As we have always done, we will continue to vigorously defend Canada’s forestry sector and the hundreds of thousands of jobs that it supports. We're taking a team Canada approach, working hand in hand with the softwood lumber industry, labour unions and provincial and territorial partners on all fronts. We have launched a series of challenges against the initial U.S. duties on softwood lumber through both the World Trade Organization and through the new NAFTA.

Our consistent and numerous legal victories clearly demonstrate that our softwood industry is in full compliance with international trade rules and that Canada is a trading partner in good standing in the multilateral rules-based system.

This year, while coping with challenges and restrictions, the forestry sector has stepped up to help keep Canadians safe. The industry has been vital to our supply chains, producing components for essential pandemic goods like PPE that Canadians have relied on. Other nations, including the United States, have also relied on Canadian exports of these components.

I would like to thank our softwood lumber industry and, as we emerge from this pandemic, we will continue to be there for them.

We have made sure to support our industry and workers since 2017 through the softwood lumber action plan.

Through the pandemic, we have supported our industry of around 8,500 forestry firms with a total of nearly $600 million through our government’s emergency wage subsidy program.

Our forestry sector is also playing a leadership role as we work towards an inclusive and sustainable long-term recovery. Canada's softwood lumber industry is a global leader in its commitment to sustainable development and environmental standards, helping to secure a more sustainable future for all Canadians. It is a perfect example of how the economy and the environment go hand in hand. Working together, we will be able to reach our target of net-zero emissions by 2050.

It is clear that we have so much to be proud of with our forestry sector and with softwood lumber. Our industry shows leadership on so many fronts, from environmental stewardship to innovation and global trade, while supporting hard-working Canadians and economic growth.

Allow me to reiterate here my personal commitment to use every opportunity to raise softwood lumber with my U.S. interlocutors and to defend the interests of the Canadian forestry sector and forestry workers across the country.

Our government will always stand up for Canada’s forestry sector.

Thank you.

I look forward to answering your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister. I appreciate that.

We will go on to Ms. Gray for six minutes, please.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair, and thank you to the minister for being so accommodating in being with us here today. We appreciate it.

Minister, you met with U.S. trade representative Tai on May 17 and 18, and your readout says you discussed softwood lumber. These new tariffs were announced on May 21.

Did Ambassador Tai inform you of these tariffs, and whether they were increasing and if they were coming?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I want to thank the honourable member for that question.

No, she did not. I did raise it. As I said, I always raise softwood lumber at every opportunity with U.S. interlocutors.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Is it a concern for you that Ambassador Tai didn't give you the courtesy of letting you know that this was coming, especially since it was so soon after your meeting?

[Mary Ng, Liberal, Markham—Thornhill, ON]

To the honourable member, the process for the administrative review, I understand, takes place through the Department of Commerce. We were notified of the administrative review number two.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Minister, have you met with or spoken with Ambassador Tai since the U.S. announced its intention to double the softwood lumber tariffs on May 21?

[Mary Ng, Liberal, Markham—Thornhill, ON]

The last meeting I had with Ambassador Tai was also with Mexico. It was at the USMCA Free Trade Commission. The three of us are committed to the successful implementation of the new NAFTA and ensuring that our efforts on global recovery, including for the environment, for labour, and for inclusive growth, are things we are all working on towards North American competitiveness.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Minister, you're saying that this announcement came just a few days after you met with the ambassador, and you didn't call her up to say, "What is this? What's going on?" You didn't pick up the phone to call and ask what was going on.

[Mary Ng, Liberal, Markham—Thornhill, ON]

I stand up for the Canadian softwood forestry sector, and softwood lumber workers and businesses, as a top priority. This is a very important sector that employs many, many Canadians, and it is my commitment to always defend their interests.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Minister, did you meet or speak with Ambassador Hillman since May 21, since this announcement?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I'm in regular contact with Ambassador Hillman on a range of issues with respect to my file. I always speak to the ambassador.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Since May 21, have you spoken on this matter?

[Mary Ng, Liberal, Markham—Thornhill, ON]

Well, I would have to look specifically at my schedule. I'm in regular contact with the ambassador on matters of Canada-U.S. relations, in particular as they relate to my file.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Would you be able to table information as to when you were speaking with Ambassador Hillman on this matter since May 21?

[Mary Ng, Liberal, Markham—Thornhill, ON]

What I would say to the honourable member and to the forestry sector—and I appreciate all of the work that you do as a sector—is that I will always defend your interests.

We have been doing that. We will continue to do that, and to raise how unjustified these tariffs are. Indeed—

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Minister, did you meet with or speak with U.S. Secretary of Commerce Gina Raimondo since May 21?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I have had the opportunity to raise the issue of softwood lumber with the commerce secretary.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Was that since May 21?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I have had the opportunity to speak to the commerce secretary about softwood lumber.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

What is the number of U.S. legislators at the federal or state level you've met with since May 21?

[Mary Ng, Liberal, Markham—Thornhill, ON]

I have had the opportunity to meet with labour representatives as well as legislators to advocate for Canada and for the softwood lumber industry. It is a top priority for me to stand up for Canadian businesses, particularly here in the forestry sector.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Minister, May 21 wasn't that long ago. How many U.S. legislators would you have met with—it wasn't really that long ago—in your best estimation?

[Mary Ng, Liberal, Markham—Thornhill, ON]

To the honourable member, what is really important here is that Canada continues to defend our softwood lumber and forestry sector. We are very clear about the tariffs being unjustified.

We also know that these tariffs are a tax on the American people, because they make it more difficult to do the work that needs to be done around home building and affordable housing. We also know that Canadian softwood lumber has terrific products that are environmentally sound. I think there are wonderful opportunities for us to be working together, especially in the area of the environment.