'We have to adapt': Northern Ontario mill owner calls for action on U.S. softwood lumber tariffs

The owner of lumber mills in White River and Hornepayne, Ont., is calling on the Canadian government to step in after the U.S. Department of Commerce raised softwood lumber tariffs.

The United States said Wednesday it was imposing duties of 17.9 per cent on average softwood lumber imported from Canada, double the previous rate of 8.99 per cent.

"They can't fix prices in the U.S., so what they do is they set the tariffs," said White River mill owner Frank Dottori. "This allows them to jack up the prices."

"And I am always amazed that the American government lets them do that, because basically, it's an indirect price fixing."

The tariffs are designed to encourage Americans to buy U.S.-produced lumber. The U.S. has said Canadian lumber producers are able to sell lumber in the U.S. cheaper, as Canadian producers are subsidized.

"The World Trade Organization (WTO) has concluded that virtually every reason historically advanced by the United States for imposing countervailing duties on softwood lumber imports from Canada is unfounded," the Ontario Forest Industries Association (OFIA) president and CEO Ian Dunn said in a statement issued Wednesday.

"As of October 2021, Ontario's exporters have an estimated $505 million dollars tied up in these unjust duty deposits, money that could be used to stimulate local economies and get Canadians and Americans back to work during these unprecedented times," he stated.

"Ontario's forest industry is not subsidized, and we will continue to defend the sector against these unjust trade actions."

The OFIA said current lumber pricing and supply trade issues have added nearly $36,000 to the price of a new home.

"The fact is, there is not enough domestic supply of lumber to meet demand in the United States," Dunn stated. "Imposing these punitive duties demonstrates that the Biden administration has no interest in seriously addressing the housing affordability crisis or fair trade with its most important neighbour and ally."

"These tariffs ultimately are paid by American consumers. If President Biden is serious about combating inflation, he should be reducing or removing, not raising, tariffs."

Dottori said his company has more than $20 million tied up in duty deposits.

"It'd be nice to have it in our bank so we can modernize the mills, and upgrade some of the equipment," he told CBC News. "We tried to adapt the best we can and hope that government is going to have ... the fortitude to take a little bit of constructive action or retribution."

'We're obviously frustrated'

Dottori said his company's duty rate is 17.3 per cent. Not all mills are seeing the same rate, however; for example, the Resolute Forest Products rate is 29.66 per cent.

Resolute Vice-President of Communications, Sustainability and Government Affairs Seth Kursman said the company believes it should have "unencumbered access" to the U.S. marketplace.

"There is no subsidy in Quebec or Ontario," Kursman said. "We're obviously frustrated with a duty of almost 30 per cent."

"That makes things rather challenging in the marketplace, but we're going to continue to see the process through," Kursman said. "We certainly hope that the United States and Canada will engage in good faith discussions to resolve this long-standing dispute."

Dottori said he believes companies, such as Resolute, that have taken "pretty aggressive action" against the tariffs in the past are being targeted via higher rates.

"It just shows the political corruption from my point of view," he said.