Thank you.
Good afternoon, Madam Chair, members of the committee and fellow witnesses, as well as other staff. I'm here to provide a perspective on indigenous participation in the lumber sector in North America.
Briefly, the 2006 softwood lumber agreement provided stability and predictability until its expiry in 2015, which triggered the latest round in the softwood lumber dispute. There remains no successor to the 2006 softwood lumber agreement, and its provisions are no longer in force.
The U.S. was originally petitioned to impose countervailing and anti-dumping duties on Canadian softwood lumber suppliers by American lumber advocates alleging that Canadian lumber is unfairly subsidized and dumped onto the U.S. market. The U.S. Department of Commerce initiated an investigation into these imports and concluded that softwood lumber imports from Canada have materially injured the U.S. domestic lumber industry. This resulted in both CVD and AD orders being initiated in 2018, so we're well into year number five.
The Meadow Lake Tribal Council is an organization of nine first nations located in the province of Saskatchewan. MLTC is the owner of NorSask Forest Products, a softwood lumber producer operating on first nations lands. NorSask is the largest wholly owned indigenous sawmill in Canada, and it produces approximately 150 million board feet of lumber each year, with approximately 60% of this lumber headed to the U.S.
On the softwood lumber that it exports to the United States, NorSask is obligated to pay these duties. Since the initiation of these trade penalties, NorSask and, in turn, nine first nation communities, have an excess of $20 million held on deposit with the U.S. government.
As far as the Meadow Lake Tribal Council knows, NorSask is the only Canadian wholly indigenous-owned softwood lumber producer, with significant exports to the United States, but in no way is Canada's sole indigenous lumber producer a threat to softwood lumber producers in the United States.
Firstly, on July 1, 2020, the new Canada-United States-Mexico Agreement entered into force. CUSMA generally applies to the softwood lumber trade and, in general, allows for tariff-free exports of softwood lumber to the United States. For example, the preamble of CUSMA specifically mentions that one of the intentions of the agreement is to “Recognize the importance of increased engagement by indigenous peoples in trade and investment”. This inclusion indicates the parties' intention to advance reconciliation with indigenous peoples through economic sovereignty.
Secondly, CUSMA includes a specific protection for indigenous peoples. This exception states that legal obligations to indigenous peoples cannot be trumped or interfered with by commitments made under the trade rules. Article 32.5 states that “this Agreement does not preclude a Party from adopting or maintaining a measure it deems necessary to fulfill its legal obligations to indigenous peoples.”
Thirdly, chapter 25 of CUSMA is dedicated to small and medium-sized enterprises, with the parties to the agreement recognizing the important role these entities play in the economy. Each party has specifically agreed to “strengthen its collaboration with the other Parties on activities to promote SMEs owned by under-represented groups including women, indigenous peoples, youth and minorities, as well as start-ups....”
In summary, MLTC reminds the Government of Canada of its commitment and the opportunities under CUSMA to support and protect small and medium-sized businesses and indigenous peoples who are exporting products to the U.S., such as softwood lumber.
MLTC encourages the Government of Canada to provide two things. Number one is indigenous exemption from current punitive trade actions and any future softwood lumber agreement. Indigenous-owned forest product businesses make up an insignificant component of Canada's total softwood lumber exports, yet indigenous companies like NorSask continue to face unfair, punishing trade action despite the collective commitment by Canada, the U.S. and Mexico to a general exception and protection for indigenous peoples. Canada should take immediate action to protect indigenous-owned softwood lumber manufacturers and exporters from the current U.S. lumber countervailing and anti-dumping tariffs, and from any future softwood lumber agreement.
Number two is the return of all countervailing and anti-dumping duties to indigenous softwood lumber producers. The Canadian government is responsible for matters related to international trade and has a special duty of care with respect to the interaction of international trade disputes and their impact on indigenous communities. These self-generated funds that have been unfairly paid as duties to the U.S. represent forgone revenue to MLTC's first nation communities, which could be used for significant social benefit and promote economic sovereignty.
The Meadow Lake Tribal Council encourages the Government of Canada to support and assist all indigenous lumber producers and exporters for whom these deposits have been paid, so that these are returned to the indigenous communities from which they remain absent.
Thank you very much, Madam Chair. I look forward to questions.