Softwood producers unstirred by declining U.S. exports

Canada's softwood-lumber exports to the United States have fallen since the Americans imposed new duties earlier this year, but thanks to near-record wood prices, the industry isn't suffering much from the political trade fight.

As the clock inches toward the end of 2017, it seems unlikely Canada and the United States will reach a new softwood agreement this year, but even the industry association representing most softwood producers in Canada isn't that concerned about it.

Joel Neuheimer, vice-president of international trade and transportation for the Forest Products Association of Canada, said the higher price of wood and the insatiable demand from U.S. builders is helping keep the duties from pushing companies to lay off staff, cut production or even close down.

"If we were not seeing the same kind of demand and the same kind of high prices we're seeing, then we might be in an entirely different type of situation," Mr. Neuheimer said.

Trade data from the U.S. Department of Agriculture show the amount of Canadian softwood imported was down 8 per cent for first nine months of 2017, compared with the same period in 2016.

However, the value of those imports went up very slightly – 0.15 per cent – because even though less wood was shipped, each piece of lumber was worth more.

Trade data from Statistics Canada show British Columbia producers are bearing the brunt of the drop, with softwood exports to the United States down about 33 per cent. The value of those exports was down 28 per cent.

British Columbia's wild fires last summer had a significant effect on the province's forestry industry, with softwood exports in July and August only about half what they were a year earlier. Quebec exports to the United States actually went up 3 per cent and Ontario exports are up 11 per cent so far this year.

Quebec and Ontario rely almost exclusively on U.S. markets for their wood, with 99 per cent of Ontario shipments of softwood and 98 per cent of Quebec's going to the United States. In 2016, about 81 per cent of B.C. softwood was exported to the United States, while in 2017 that fell to 63 per cent. B.C. producers saw their exports to the rest of the world jump 67 per cent this year.