Thank you, Madam Chair.
I'd like to thank the members of the committee for the opportunity to speak to them this afternoon.
The United States is Canada's largest trading partner, and for the majority of the U.S. states, Canada is also their largest trade partner.
With somewhere around 18% of the U.S. GDP associated with the housing sector, it is fair to say softwood lumber trade is an important component of North American economic prosperity. The first trade action goes back to 1982. In the 40 years since, Resolute and our peers across Canada have been through many iterations of the softwood lumber dispute. These issues have been the subject of debate for decades, and now into our seventh presidential administration.
Five years into the current iteration of the dispute, which started in 2017, Canadian producers have deposited over $6.5 billion Canadian, and growing, of duty deposits at the border, pending a resolution.
We know trade barriers inflate prices and slow economic recovery. Often it is low- and middle-income families who suffer the heaviest burden.
I would like to recognize the continuing efforts of Minister Ng, the legal team and others in government, for their tenacity and steadfast support.
We remain confident that with these efforts, Canadian exporters will ultimately prevail before international dispute resolution panels, as they have consistently done in the past. While some in the U.S. continue to recycle the same arguments, decades of litigation have rejected the notion that Canada competes unfairly just because it's different.
To that point, Canada secured a major victory before the World Trade Organization in August 2020, in a decision that undercut almost all of the U.S. Department of Commerce’s arguments. Unfortunately, the U.S. has delayed the implementation of that ruling, opting to appeal the decision with an appellate body to which it refuses to appoint members.
Canada should continue to emphasize to the Biden administration that this is not how friends should behave toward one another, and that our relationship ought to be based on good faith and respect for the rule of law and treaty frameworks for dispute resolution.
We recognize that the path to a durable solution to this long-standing problem will more likely come through a consensus-based agreement based on fair and equitable negotiations.
To that end, Resolute joins others in the forest products industry in offering support for good faith engagement between our two governments. To be sure, an agreement must be in Canada’s best interests, and it should not come at any cost. Resolute is committed to being a practical and pragmatic player.
Today we’re fortunate, I believe, to have significant alignment among Canadian producers, which is a valuable opportunity and basis upon which to make progress.
Over the past months, the Biden administration and European Union have amicably resolved issues, even dropping cases before the WTO in favour of bilateral talks.
The U.S. is working to strengthen and to improve their trans‑Atlantic relationship, as demonstrated in an Airbus/Boeing dispute, as well as a case involving Spanish olives. And just last week, the U.S. and U.K. reached a settlement on steel and aluminum.
Canada should receive no less treatment than the U.K., Spain or the broader European Union. Together, we must restore the special relationship between Canada and the U.S.
Canadian softwood lumber producers have important allies in the U.S. Recently, about 100 bipartisan members of Congress from all over the U.S. sent a letter to the Biden administration, calling for a resolution of the softwood lumber dispute. Just last week, the influential U.S. National Association of Home Builders [Technical difficulty—Editor] yet another call for swift action toward an agreement with Canada to eliminate softwood lumber tariffs.
The vast majority of Resolute’s manufacturing assets operate in Canada. Most of our production is export-focused. Today, we pay a combined anti-dumping and countervailing duty rate of around 30% on the value of softwood lumber shipments exported to the U.S. We currently have about $430 million U.S. in duty deposits trapped at the border.
For a company of our size, this is a lot of money. And it's money that we cannot invest to grow our business, support our transformation and drive economic activity in the communities of our 4,700 employees in Quebec and Ontario.
Members of the committee, I thank you for your attention.