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.
2:55 p.m.
Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Certainly. Thank you, member.
As you said, the money belongs to the mills and the companies that paid the duties. The government is committed to helping the softwood lumber industry expand its range of products, especially the value-added products, and find new markets, so we would look at any opportunity to help our companies do so.
2:55 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
We will go on to Mr. Savard-Tremblay for two and a half minutes.
2:55 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
I want to follow up on a previous question to get a more fleshed-out answer.
I had asked the minister a question about new bills that were making their way through two state legislatures in the U.S. She said that she was keeping an eye on the situation and that, at first glance, we had no reason be worried.
Mr. Alexander, what are you seeing? What should we be watching for when it comes to these potential new laws, especially in terms of how they define boreal forest degradation?
2:55 p.m.
Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
The Government of Canada is watching the progress of these bills in California and New York very, very closely. We have consulates general in both California and New York. We're monitoring the situation very carefully. They're also engaged in advocacy to key decision-makers in those states to make them aware of Canada's good forestry practices and ensure they know that Canada has some of the most advanced forestry and environmental practices in the world and that there is no risk in Canada. We have very well-managed forests in Canada, and there is no risk that they will diminish.
2:55 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you.
I take it that you are keeping a close eye on the situation. I'm glad to hear it.
That said, have you reached out to your American counterparts regarding the issue? Do you plan to take any action? Do you have any more information on what constitutes forest degradation?
2:55 p.m.
Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
I understand that our consulates and our consulates general and our embassy in the United States are in contact with key decision-makers in both New York and California to ensure that any definition of “diminishing forest” takes into account Canada's responsible forest management practices and Canada's environmental stewardship of our forests.
2:55 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
The remaining two minutes will go to Mr. MacGregor, please.
2:55 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you, Chair.
I'm not a regular member of this committee, so I don't have as much expertise as regular members do, but I'm just wondering about.... The duties are applied to, say, raw logs or to dimensional lumber heading down to the United States. Duties are applied at the border, and the product enters the U.S. markets. I guess Canadian consumers could suffer if that product were then manufactured into something more valuable and then shipped back to Canada. Am I correct?
2:55 p.m.
Director General, North America Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Maybe I'll ask Colin Barker to respond.
2:55 p.m.
Director, Softwood Lumber Division, Department of Foreign Affairs, Trade and Development
Thank you for the question.
Duties only apply to lumber. Logs are not yet a lumber product, so there are no duties. However, Canada also has a log export process by which we monitor the export of logs. The B.C. government has a similar process for logs on provincial Crown lands. Requests for log export permits are usually approved. We have an over 99% approval rate, but they do go through a process to ensure a balance between domestic needs and export needs.
2:55 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
To that question, if the lumber is manufactured into a new product in the United States and then shipped back to Canada for sale, does that have a detrimental impact? Will Canadian consumers feel the impact of duties through that process?
2:55 p.m.
Director, Softwood Lumber Division, Department of Foreign Affairs, Trade and Development
I'm not aware of any significant reimportation of Canadian lumber back into Canada from Canadian logs that have been exported to the U.S. I assume transportation costs back and forth might make that prohibitive. That's my view.
To your question about litigation costs, I'll note briefly that the costs have been in line with those of previous years. Our counsel does a very good job of maintaining a cap on expenditures so that they are in line with those of previous years. Of course, any expenditures are, in our view at least, well worthwhile, given the high value of exports and the large amount of duties that are being held at the border. The return on investment is certainly good, in my personal view.
3 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much to all of our witnesses for the valuable information on something that, as you can see, is an important issue for all of us.
To all members, our next meeting will be on Monday. I hope you all have a wonderful, sunny, hot weekend in your area. Thank you all.
The meeting is adjourned.