International Trade Committee on Nov. 27th, 2024

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Chabot, the floor is yours.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you, Madam Chair.

My sincere thanks to all the witnesses.

As we see, the lumber issue is unfortunately not getting solved, even after many years. At least it is the committee's goal to find solutions.

Mr. Bromley, during the pandemic, under the leadership of the Wood Council, the leaders and members of local unions of the United Steelworkers had put pressure on federal politicians to have five major changes made to the Softwood Lumber Action Plan. One of the things you were asking for was that loan guarantees be offered to companies that had paid the duties on lumber shipped to the United States.

Is that still one of your requests?

[Jeff Bromley]

Yes, I wouldn't waiver from that request. I mean, it's to the point now where the Americans continually believe that our industry is subsidized. If that's the case, if they're going to try to cripple our industry, we might as well have our government support those companies in terms of the ability to at least achieve or recapture some of those duties, so that they can reinvest and make our industry more vibrant, and so that they can, in some cases, survive.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

We can see that the situation has not improved since then, given the August increase in the duties and the recent threat by Donald Trump to impose tariffs on all imports.

Given these circumstances, do you have any additional requests to make today?

[Jeff Bromley]

In terms of the tariffs that Trump announced yesterday, the day before or whatever it was, I'm not entirely sure how that 25% will impact the softwood lumber duties and tariffs: whether or not it's going to be 25% on top of what's already announced or what's already in place. If that's the case, again, I'd be surprised to see any operation continually running anywhere across the country.

I need to understand the question. If it's about whether there are any other avenues that we could go down in light of those duties, again, it's support from the federal government. First and foremost is to make this its number one priority in terms of the trade file with the United States. To be honest with you, I'm not feeling that the softwood lumber dispute over the last eight years has been the number one priority. Second, we need stopgap measures, such as loan guarantees and initiatives like that, so that the companies can survive this situation, and so that the workers continue to work.

I was up in Chibougamau with the Chantiers group last week. All small communities like those are going to be really devastated if this continues.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Obviously those industries are essential, particularly since their operations are consistent with Quebec's natural resources.

Would you say that the 2020 Canada—United States—Mexico agreement was a missed opportunity for the government?

We know that the agreement is to be reviewed in 2026, but the work has to start before then. You believe that the government has not stood firm enough to protect this sector. Do you have measures to suggest in connection with the review of the agreement that is scheduled for 2026?

I admit that this is a long question, which may call for a long answer.

[Jeff Bromley]

First and foremost, I think there has been a missed opportunity. We've had free trade between the two countries, and now the three countries—Canada, U.S.A. and Mexico. It was 1987 for the original free trade agreement, and now, most recently, the review with the CUSMA. I think it was a missed opportunity. Softwood lumber has always been excluded unfairly in terms of the trade agreements, and I think it has to be a priority for it to be included, because for it to be excluded and outside of that process, it excludes us—at least on paper—from trying to dispute these tariffs. It excludes us from a number of processes that other industries within Canada are part of, because they are part of that agreement.

Yes, I very much support that and think it was a missed opportunity, to answer your question.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Desjarlais, go ahead, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Madam Chair, and thank you to the witnesses for being present with us today.

Of course, the news coming from our American counterparts in the United States is deeply troubling. It's an attack on our industries. It's an attack on our workers. It's an attack on the ability to have a strong North America. It's deeply concerning to New Democrats and to unions right across this country, and it's something that I think we as Canadians have to take seriously.

As we heard already, the witnesses have provided their dismay in relation to the fact that a trade dispute that originated before I was even born, in 1982, is now persisting. It's a kind of conflict that continues to persist since 1982. For example, in the period between 2004 and 2009, we had already, at that point, lost almost 10,000 direct and indirect jobs within our forestry sector.

I can only imagine the dismay workers feel right across this country, knowing that we have decades of inaction now related to the very extraordinary exception related to free trade in lumber to the United States.

Mr. Bromley, I take your statements quite seriously in relation to the fact that this has been an ongoing issue. It was an issue in the last free trade agreement we signed. It was an issue before the last free trade agreement. It's an issue again today. The hyper-exceptionality based on this one fact, this Crown lands issue with the United States, calling it a great big subsidy for all of our industries here, is their problem. Since 1982, this has been something they've said was unfair. It's something that I think we as Canadians take great pride in, in terms of how we organize our land and natural resources towards public good, towards ensuring that our public coffers actually benefit from the sale of our great natural resources here in North America, here in Canada. I think that's something the Americans just simply don't understand.

I think we need to have a very strong approach, a united approach, that addresses some of the very original issues related to this very large trade dispute, and we should continue now to build on some of the arguments that are already present to Canadians. We know, for example, what Mr. Donald Trump wants. It's like a scary movie, this guy. We've watched this scary movie before. He was the president once already. The great advantage we as Canadians have today is the fact that in this scary movie we know when the jumps are. We know when the scary parts of this film are going to take place. We knew these tariffs were going to come. We knew that southern conservatives would try to do this. We should have had the ability to organize our labour, organize our management, and organize our industries towards a better outcome.

Some of the recommendations made by United Steelworkers, for example, on a liquidity fund to shore up some of the very serious issues of being unable to access capital could be met. That's something we could do today. We could do that right now to shore up some of our industries and prevent any job losses.

Mr. Bromley, with the recent news of Trump's plan to impose a 25% tariff on all Canadian exports.... I take your point, which is that we aren't even certain whether or not it's 25% plus the existing 14%, which would bring us above that. That's something the Prime Minister should have asked in his phone call and something he should ask today.

What does this actually mean for the union members of United Steelworkers? I'm sure they're very worried right now. What are their fears? What are you hearing from the shop floor, from our brothers and sisters who are working so diligently while under a very serious threat?

[Jeff Bromley]

The first question is, where are their paycheques? Are they going to be able to continue? Are there going to be layoffs, or will they even suffer from a permanent closure? Not far from you, up in your neck of the woods in northeastern B.C., across the border, the Fort St. John mill I referenced is going to close almost completely due to the current and pending softwood lumber duties. It's not about fibre supply. There's a good fibre basket out there. It's not about a lack of workforce. There's a good workforce in Fort St. John. Canfor came out and said that mill closure is almost completely due to the softwood lumber tariffs increasing this year and doubling next year.

To your question, they're wondering how they're going to pay their mortgages. They're wondering how they're going to pay their bills. I hearken back to the point I'm making about our folks, our membership, living in largely rural communities. It's not as easy these days, in a housing market where you can't just sell your house and move to Vancouver or even move to Edmonton or Calgary. You can't just pick up and move your house. It's not that easy anymore. These folks, if they lose their jobs, they'll have to find work. Maybe they'll be working in northern Alberta, I don't know, but maybe they'll have to then do remote work.

It's creating a tremendous amount of stress to my membership, for sure.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

This is one of the most important industries in Canada. We're a country that exports raw material. We're a country that prides itself on being able to supply not just America but the world with good materials. We are literally building the planet with good Canadian products here.

It's a deep shame to see our partners in the United States do something so callous—and, I would agree, illegal—to what is supposed to be one of our greatest relationships in the world.

Mr. Bromley, what would you suggest in terms of some of the items related to how we deal with Mr. Donald Trump in terms of the now overdue and done softwood lumber action plan? You submitted at that time, I'm certain, many recommendations. What recommendations do you think still stand and are present today for that important agreement? Are there lessons learned from that process? Would you recommend any of those processes to deal with this crisis today?

[The Chair, Liberal, Judy Sgro]

Mr. Bromley, could you just make it a brief answer? It's simply because the member is out of time.

Give us a brief answer, please, so we can move on to the next member.

[Jeff Bromley]

I will be brief. Thank you, Madam Chair.

We talk about a housing crisis across Canada. Well, there's a housing crisis across the U.S. The simple fact of the matter is that the U.S. cannot supply 100% of their demand. There's a 30% market share that Canada usually has. They need our resource, and it is incumbent upon them to make sure that lumber gets into that market so that they can build the houses and increase the housing supply in the U.S.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Next is Mr. Baldinelli for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to the witnesses.

You can really hear the frustration in the comments of our industry stakeholders.

Mr. Bromley, in your comments, you said, “It is time that our government stands up for...our Canadian industry”. I agree. It's time to put Canada first. It's time to stand up for Canada and stand up for our workers and those businesses in the forestry sector.

My God, it's been nine years and three U.S. presidents, and we're still negotiating. Our previous prime minister, a Conservative prime minister, was able to get a deal done in 79 days. This inaction has cost the sector about $9 billion. We're going from a 14% tariff currently.... There are discussions on that doubling next year, and just recently we've had the U.S. president-elect talking about a 25% tariff.

Our Prime Minister recently, in the United States, told a U.S. audience that it's a “small” issue. However, Mr. Bromley, you tell that to the workers in Vanderhoof and Fort St. John; that's 500 workers there. These duties and tariffs have a devastating impact on those communities and companies, including all of those small businesses.

When that announcement was made by Canfor in early September, Brian O'Rourke, president of United Steelworkers Local 1-2017, stated, “In a lot of the smaller rural communities, it's devastating because there are not really transferable jobs within the area”.

Mr. Bromley, how would you assess the Canadian federal government's handling of the softwood lumber negotiations? Do you believe that it has adequately protected the interests of B.C. forestry workers and communities?

[Jeff Bromley]

I'm going to be blunt and say “no”. As I mentioned, I've been yelling from the rooftops about this issue since I assumed this position six years ago, not long after this round of the fight started.

In my opinion, the attention paid by the federal government during that time has not been sufficient. It needs to be front of mind, with the amount of jobs that have been lost. The amount of devastation to the communities is growing and continues to grow, and there's been no.... It seems like the effort to try to change that narrative has been an abysmal failure, to be quite honest.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

You also raised the point about the CUSMA and not being negotiated into that agreement. I'm just wondering if you could say anything more about that.

[Jeff Bromley]

As I mentioned, in 1987, when the first free trade agreement was negotiated with the United States, and continually through the variations that now include Mexico, the softwood lumber product going into the U.S. market has never been a part of that free trade agreement. Ultimately, it's not a free trade agreement, because there are exclusions.

It's an abundant shame because, within that agreement, whatever its flaws, there are processes to be able to dispute that. We can use processes at the U.S. Department of Commerce to appeal these duties, and we can use the World Trade Organization. However, when the U.S. deliberately doesn't fill positions so that we can argue in those, we don't have the ability, outside of these trade agreements. Not including softwood lumber agreements—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Mr. Bromley.

I want to go to Mr. Dunn.

As president and CEO of the Ontario Forest Industries Association, you mentioned that you represent 50 companies with about 137,000 direct and indirect jobs.

What is the impact of the government's inaction and the lack of leadership on this file? How does that impact those 137,000 jobs in those small communities those people live in?

[Ian Dunn]

The answer is that it already has. Like I said, there is a mill in the northwest that's taking operational downtime with a reduction of shifts and with layoffs. There are two smaller family-run businesses in the eastern and central area of the province that will likely be shutting down.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

You mentioned one that's been in business for 110 years with a licence. It's a family-run business that's had a licence for 110 years.

[Ian Dunn]

Yes. The business may not have been around for 110 years, but the family has held a licence to cut timber in Ontario for 110 years, and this person will likely be the last person to hold that licence.

[The Chair, Liberal, Judy Sgro]

Thank you very much, sir.

Ms. Fortier, go ahead, please, for five minutes.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you, Madam Chair.

I thank the witnesses for being here today. This is obviously an important study, because it gives us an opportunity to shine a spotlight on the challenge we currently face and to gather recommendations from the witnesses that we will be able to submit to the government, or even to various partners, regarding the approach to be adopted, or measures to be taken, to solve this problem.

My first question is for all the witnesses.

The trade dispute between Canada and the United States over lumber has become one of the longest lasting between the two countries. We know that over the past 25 years, the American lumber industry has often tried to get the American government to put restrictions on Canadian lumber by applying American laws on countervailing duties and anti-dumping duties.

What do you think could be most useful to the Canadian representatives in any future negotiations?

I am going to start with Mr. Lebel. I would point out that I have no more than five minutes, so I would ask the witnesses to give succinct answers.