'It's gonna be painful': New Brunswick braces for new softwood lumber tariffs

It's going to be a challenging road ahead for New Brunswick sawmills now that the United States has announced its final decision on duties against Canadian softwood lumber imports, say members ofthe province's forestry industry.

The U.S. Commerce Department made the announcement Thursday, saying Canada was providing "unfair subsidies" to domestic producers.

• 'Unfair, unwarranted and deeply troubling': U.S. sets final import duties on Canadian softwood lumber

J.D. Irving Ltd., the province's largest forestry company, had earlier managed to negotiate a lower tariff rate of about three per cent.

But all other sawmills in the province will be subject to the higher rate of 21 per cent.

Hit to bottom line

Mike Jennings, a partner at Brunswick Valley Lumber, a distributor of softwood lumber primarily from eastern Canada into the U.S., said JDI deserves the lower rate it secured, "but to be honest, the rest of New Brunswick deserves that rate."

"With the rest of New Brunswick paying 21 per cent, it's gonna be painful."

Despite Thursday's news, other industry stakeholdersare still hopeful that Canada and the U.S. can come to some kind of agreement on the issue, he said.

• Uncertain future: New tariff will hurt N.B. sawmills' bottom line

"I think everybody's just waiting and hopeful for a negotiated settlement, and there's going to be some pain on the mills until that happens," he said.

Mike Legere, executive director of the industry group Forest NB, said it's hard to tell exactly what the fallout will be for his member sawmills.

But it will certainly hurt their bottom line, he said.

"We know there's going to be some sort of impact, whether it's mill closures or reduction of shifts. Anything that hurts the bottom line for a sawmill is not good," he said.

"To what extent, I don't know. It's early days."

Legere said Forest NB was planning to convene with its member sawmills Thursday to discuss what they think the next steps will be.

Minister slams decision

Under previous softwood lumber agreements, New Brunswick and other Atlantic provinces were exempt from tariffs because they weren't viewed as subsidizing their mills the way that other provinces do.

However, earlier this year, softwood from the region was lumped in with the rest of Canada.

But in June, the U.S. Commerce Department said that shipments of softwood lumber from Nova Scotia, Prince Edward Island and Newfoundland and Labrador would be exempted from anti-dumping and countervailing duties.

New Brunswick was excluded from that exemption.

• New Brunswick odd man out in potential Atlantic softwood reprieve

The province's trade minister, Roger Melanson, called Thursday's decision "unfounded."

"And it's unfair. It's unfair that a decision has been made not looking at all the facts," he said.

"If you look at all the facts at how we manage our forestry industry, and how industry does business, it's quite clear that this industry is not subsidized."

He said the province intends to work with the federal government if they proceed with litigation on the issue.

Beyond that, he said the province will be meeting with industry stakeholders Friday and will reveal more about their plans in the coming days.