International Trade Committee on June 4th, 2021

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

If I can just clarify through you, Madam Chair, are you saying that you've asked for those meetings and those meetings have been denied? It's one thing to say that you want to have a discussion and you're open for conversation. It's another to say, “Look, we need to sit down this week, this month, on these dates and really get serious about this.” Are you saying that you've requested that kind of meeting and that the U.S. has denied it, or are you saying that you haven't requested in that way?

[Arun Alexander]

Thank you for the question, honourable member.

Madam Chair, Canada has made it very clear to the United States and to the most senior levels of the United States that we are open to having a discussion with the United States about reaching a fair and equitable agreement. That's been at every opportunity that we have, from the Prime Minister to the minister to senior officials.

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

Thank you.

Through you, Madam Chair, as of right now, looking forward, has the government directed you or any member of your department to schedule meetings to negotiate a softwood lumber agreement? Have you made that specific request to schedule meetings on this matter?

[Arun Alexander]

Thank you for the question, honourable member.

Madam Chair, we are open and we have indicated to the United States at every level possible—including senior officials—that we are open to a discussion to settle this matter through an equitable agreement that would be of benefit to both the United States and to Canada.

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

It sounds like there's nothing planned. We haven't had anything planned in the past and we don't have anything specifically planned in the future, so I'm sure that's going to be very concerning to Canadians and to the industry.

On a different topic, can you table with the committee the analysis your department has conducted on the U.S. commerce department's softwood announcement from May 21?

[Arun Alexander]

Maybe I will turn to Mike Owen, who's our legal counsel, to respond to that question.

[Michael Owen]

Of course, we've reviewed the U.S. Department of Commerce's determination thoroughly, and we've been consulting with my team, which is responsible for analyzing it under international law and also with our U.S. counsel, so we have conducted that review. Of course, that review would be privileged.

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

Then there's no information from—

[The Chair, Liberal, Judy Sgro]

Thank you very much—

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

Madam Chair, I still have a little bit of time, if that's okay.

[The Chair, Liberal, Judy Sgro]

Be quick.

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

Can you table for this committee the number of times and dates since November 2015 that the Prime Minister and cabinet ministers have brought up softwood lumber with the U.S., and who brought it up to whom, and the response that they received? Are you able to table that information with this committee?

[Arun Alexander]

What I can tell you, honourable member, is that my understanding is that at every opportunity the Prime Minister, the Deputy Prime Minister, the minister and senior officials have raised the issue of softwood lumber with U.S. counterparts—

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

What is “every opportunity”? Is that like once a year, or—

[The Chair, Liberal, Judy Sgro]

I'm sorry; your time is up, Ms. Gray.

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

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

We move on to Mr. Sarai, please.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you, Madam Chair.

I would like to know if exports of our softwood lumber to the U.S. have increased in the last five years.

[Arun Alexander]

Honourable member, I am not certain. I don't have the statistics in front of me, but I might ask Mr. Barker if he knows the answer to that question.

[Colin Barker]

I don't have the exact numbers in front of me either, but in general, in terms of our exports, I think they've held reasonably steady. Of course, the value of those exports has shot up quite a bit, given the price of lumber. In the past six months we've had the highest-ever recorded value of Canadian exports of softwood lumber products to the United States. As was mentioned before, mills are working flat out to make as much lumber as possible and ship it to customers both here in Canada and in the U.S.

That's why I would say that certainly the value of those exports is quite high, and I think the overall amount is also consistent.

A question previously had asked about production in Canada and production in the U.S. Of course, production also depends on availability of the raw material, the trees themselves. As the honourable members who are from B.C. might know, with the pine beetle epidemic and forest fires, the availability of trees in British Columbia has declined over the past few years—at least, the harvestable trees.

While B.C.'s production is impacted by that fundamental reason, we've seen production in the U.S. south increase simply because they have many more trees available for harvesting. That's why you're also seeing some Canadian investment in that region as companies seek to ensure that they can keep their production numbers up by investing where the resource is available at the current time.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Has there been any reduction in the exports to other markets, such as Southeast Asia, China, Japan, Korea and India? Due to the prices, have we seen any decrease there, or have the exports been steady?

[Arun Alexander]

I don't have the exact statistics in front of me, so I can't provide you with a statistical answer, but I imagine that the pent-up demand in other countries may be similar to what's happening in the United States and Canada, so demand for Canadian softwood lumber in foreign markets probably is still holding steady, if not increasing.

[Randeep Sarai, Liberal, Surrey Centre, BC]

I think a colleague of mine asked the minister about this. The goal of the diversification, in my understanding, is that we never get locked down to just one market. That's so that we're not susceptible to just American tariffs or Asian tariffs or any one country's tariffs. If we ever get hit with economic issues or trade issues or slowdowns in different economies, the sector is diversified so that we can sell to other sectors. Is that the goal of diversifying the forestry sector in Canada?

[Arun Alexander]

I think that's one of the objectives. It's to ensure that Canadian suppliers always have markets for their products, whether that's in Asia and Europe or in the United States. Finding new markets and selling new products like cross-laminated timber and lumber for high-rise buildings increases the number of value-added products that Canadians produce and creates good-paying jobs in Canada. I think that finding more markets is good for the Canadian lumber and softwood lumber industries.

[Randeep Sarai, Liberal, Surrey Centre, BC]

When we get the tariffs refunded, has the department looked at ways to leverage them? I'm pretty confident that we'll win at the tribunal or any appellate bodies on this matter. Those tariffs don't belong to us, but to the sawmills that paid them. Could they leverage the money to invest more in the industry for more value-added goods, by multiplying every dollar of theirs by three from the government? Has there been any thought given to things like that, or to incentives? Could we leverage the more than $5 billion in tariffs that is sitting there and growing?