Thank you, Madam Chair.
My name is Jerome Pelletier. I'm the vice-president of the Sawmills Division at J.D. Irving, Limited, and also chairperson of the New Brunswick Lumber Producers, the NBLP.
I'm pleased to appear before the committee today to speak about the softwood lumber agreement and its importance to the lumber producers in the province of New Brunswick.
The New Brunswick Lumber Producers are made up of nine lumber producers in the province. We represent 95% of the softwood lumber production here in New Brunswick.
The NBLP is a key part of the New Brunswick forestry products value chain. We're the largest wood buyers for the local private woodlot owners, supporting thousands of mill employees, professional loggers, truckers and silviculture workers in all regions of the province.
We, the NBLP, are the largest supplier of wood chips, biomass and sawdust, which are all key ingredients in the manufacturing of New Brunswick's pulp, paper and wood pellets products. We also supply products to wood fencing manufacturing facilities, as well as pellet manufacturing operations all located here in New Brunswick.
There are currently 40,000 registered private and industrial woodlot owners in New Brunswick. Historically, the Government of New Brunswick's timber utilization survey reports that approximately 50% of the wood supply comes from private land. This makes New Brunswick the only Canadian province other than Nova Scotia in which such a large volume of logs come from private sources.
The New Brunswick forests are sustainability managed. In fact, New Brunswick Crown forests have a growing inventory of timber and among the lowest losses to pests and fire in Canada. The majority of the finished products produced with logs originating from the New Brunswick forests are third party certified through chain-of-custody standards like those of the Sustainable Forestry Initiative, or SFI.
New Brunswick forests fall mainly into the Acadian forest type, a natural diverse forest not only from a species perspective but also in terms of age diversity.
I think it is important for committee members to understand the significance of the forestry products sector to the New Brunswick economy. The following information comes from Statistics Canada.
New Brunswick's forestry products sector generates more economic activity than does any other industrial sector in the province of New Brunswick.
There are 900 companies operating in this forestry sector of the province, and we operate in 70% of New Brunswick's communities. In 2021, New Brunswick's forestry products sector generated the highest provincial GDP per capita in Canada, which was 56% more than the amount in the next-highest province.
The New Brunswick forestry products sector exported 2.9 billion dollars' worth of products in 2019.
In 2021, the sector directly employed 11,800 employees. When you add in indirect and induced employment, it employs over 23,000 people in the province. That is one in every 18 people in the New Brunswick workforce.
The New Brunswick forestry products sector contributed to 1.5 billion dollars' worth of employment income in 2019.
As you can see, a strong forestry sector is vital to the economy of New Brunswick. This fact leads in to the next part of my remarks, which relate directly to the importance of the softwood lumber agreement to the New Brunswick Lumber Producers.
Since the antidumping and countervailing duties were unfairly imposed by the U.S. Department of Commerce in 2017, the NBLP have paid on average a combined duty rate of almost 14%. Current cash deposits paid by the NBLP are now over $500 million Canadian.
The total amount of cash deposits paid by all Canadian producers is now at over $8 billion, making the current trade case one of the longest and most expensive in Canadian history.
The duty imposed on the NBLP significantly reduces our capacity to compete with other lumber producers located in the northeastern United States, Scandinavia and the rest of Europe.
As part of the trade dispute resolution process under the North American Free Trade Agreement and the Canada-United States-Mexico Agreement, NAFTA and CUSMA, several appeals have been filed by the New Brunswick Lumber Producers and other Canadian lumber producers. Although NAFTA and CUSMA direct that a final panel decision be made in less than one year, after more than five years no decision has been made.
We expect that the outcome of the decisions from the NAFTA and CUSMA appeals will be favourable for Canada and the NBLP. We also expect that a significant portion of the cash deposits will be refunded to the Canadian lumber producers, as well as to the NBLP.
The current trade case between Canada and the U.S. is the fifth in the last 40 years. In the last four trade cases, the softwood lumber dispute was resolved when the Canadian and U.S. governments made it a priority. For that reason, the NBLP respectfully asks the Government of Canada to, one, insist the U.S. comply with the NAFTA and CUSMA appeal procedures, with a goal of meeting all ruling deadlines, as specified in the trade agreements; two, work jointly with all parties of each province, and the lumber associations and producers, to develop a negotiation strategy; and three, encourage the United States trade representative, Katherine Tai, to enter into serious negotiations to resolve this long-standing issue.
Dear members of the international trade committee, this concludes my presentation.
Thank you very much.