Thank you, Madam Chair.
Committee members, my name is Jean‑François Samray. I'm the president and CEO of the Québec Forest Industry Council, or QFIC. I'm joined today by Michel Vincent, our chief economist.
As the main advocate for Quebec's forest industry, the QFIC represents the interests of softwood and hardwood sawmilling, peeling, pulp, paper, cardboard and panel companies and Quebec engineered wood manufacturers.
While working with governments, other stakeholders in the forest sector and the general public, the QFIC highlights the contribution of its members to socio‑economic development, the responsible use of natural resources, sustainable forest management and the ecological quality of products.
With respect to the topic under consideration today, the QFIC represents and supports its members in various ongoing litigation and gives the government approaches to ensure fair trade in softwood lumber with the United States.
Wood makes a tremendous contribution to the Canadian and Quebec economy. It's important to remind committee members that forests and the Canadian industry play an important role in the economy. The forest sector provides direct employment to over 230,000 Canadians from 600 communities. Over 12,000 industry workers are first nations members. The forest sector generates revenues of nearly $80 billion a year. In Quebec, the forest industry supports over 140,000 jobs and generates more than $20 billion in sales.
As a world leader in the production of many forest products, Canada exported $33 billion worth of forest products in 2019, of which about $10 billion came from Quebec. This figure has risen sharply since then, given the strong demand for wood in the construction and renovation sector.
On top of the economic aspect, the forest is also a powerful tool in the fight against climate change. Acting as a gigantic reservoir to capture and sequester CO2, it helps us fight global warming. The Government of Canada, through its purchasing policies, must play a key role in accelerating the use of wood as a material.
With regard to today's topic, softwood lumber exports to the United States are extremely important to Canada and are a strategic part of our industry's operations. Trade disputes date back to 1981, well before the 1994 free trade agreement.
Yielding to protectionist demands from private forest owners and American sawmills, the United States Department of Commerce methodically filed complaints against Canada as lumber trade agreements made over decades expired. To date, international tribunals have never found that Canada subsidized its industry or harmed the American market. The recent and lengthy unanimous decision of the World Trade Organization in August 2020 is on this list.
However, clearly these unilateral American trade measures are currently hurting American citizens by increasing the price of the products that they buy. The measures are also hurting Canadian consumers who must live with price increases, which are set on a continental basis. These taxes are rampant in a market where demand for housing and lumber is overheating and where American producers are struggling to meet 70% of the domestic demand.
Why do these measures exist? According to the response provided by the American coalition in legal documents, these measures give American producers an economic environment conducive to investment. However, the same coalition says publicly that its members don't intend to produce an additional foot of board to meet local demand. In this type of situation, how can a tax provide any hope to American or Canadian consumers? The question comes up. The reality is that these tariffs imposed on Canadian softwood lumber serve only to increase the profits made by American lumber producers, period. The National Association of Home Builders keeps reminding elected officials in Congress of this.
Unjustified trade measures on softwood lumber artificially inflate its price, fuelling inflation for many products. By imposing tariffs on Canadian exports, the United States Department of Commerce is increasing the price of a two‑by‑four by $1.20 U.S. right now. The American producers, who aren't paying the fees, are content to pocket this increased price.
The American administration may be talking about its made in America policy or build back better program. However, without Canadian wood, the American construction sector won't succeed. Without the presence of Canadian wood completely free of compensatory measures, President Biden can't make progress in the fight against inflation.
The retaliatory measures against the Russian economy applied by western countries add to this and will reduce the volumes of European timber in North America. A reduction in supply combined with strong demand will push the price of this strategic building material higher. By giving in to domestic producers in the United States, the Biden administration is making homes less affordable for Americans, fuelling rising inflation, and quietly killing the American dream. This isn't what we want for our American neighbours.
The QFIC and the other Canadian associations, as Ms. Yurkovich said, believe that a Team Canada approach is the best way to resolve this dispute with the United States. The forest industry, as well as the provinces and relevant stakeholders, must be consulted on the best course of action to end the dispute with our largest trading partner, the United States.
Together, we must tell our American friends that there's a better approach to the softwood lumber trade. We need to help the American administration fend off, little by little, the softwood lumber lobby, which is found in a few states—