Softwood Lumber

The softwood lumber industry is an important sector in the Canadian economy, supporting thousands of jobs in communities across Canada and creating many positive spin-off effects in related industries and services. Canada's modern, efficient, environmentally sustainable lumber companies have the potential to serve markets at home and around the world.

In the United States, where demand for lumber exceeds what domestic mills can supply, housing and other industries rely on Canada for stable, predictable access to quality products. The 2006 Softwood Lumber Agreement (SLA), which provided stability and predictability for industry on both sides of the border, expired on October 12, 2015.

Canada and the United States continue to pursue a negotiated outcome to this important bilateral issue. The Government is also meeting on a regular basis with industry, provinces and territories, and other stakeholders.

Softwood Lumber Dispute

The Canada-U.S. softwood lumber dispute has become one of the most enduring trade disputes between both nations. Over the past 25 years, the United States lumber industry has frequently sought U.S. government restrictions on Canadian softwood lumber imports through the application of U.S. countervailing duty and antidumping laws – laws that allow the imposition of import duties when a U.S. industry is allegedly harmed by subsidies in the exporting country (countervailing duties), or by dumping, which is when a U.S. industry is allegedly harmed by imported products sold at prices that are lower than the cost of production or lower than prices in the domestic market (anti-dumping duties).

Recent Developments

  • 28-04-2017 United States Department of Commerce preliminary countervailing duties take effect

    The United States Department of Commerce published its preliminary countervailing duty determination in the U.S. Federal Register on April 28, 2017.

    As of 12:00 a.m. on April 28, 2017, the U.S. Customs and Border Protection will collect cash deposits equivalent to the applicable preliminary countervailing duty rate for all softwood lumber products captured within the scope of the U.S. investigations upon importation into the United States, as outlined in the preliminary determination published in the U.S. Federal Register.

    The U.S. Tariff Act provides that preliminary countervailing duties cannot be in place for more than 120 calendar days. Preliminary countervailing duties will therefore be collected by the U.S. Customs and Border Protection as of 12:00 a.m. on April 28, 2017, through 11:59 p.m. on August 26, 2017. Final countervailing and anti-dumping duty rates would be set once the U.S. International Trade Commission publishes final affirmative injury determinations, following final affirmative duty determinations by the U.S. Department of Commerce.  This is expected to occur at the end of 2017 or early 2018. There will therefore likely be a “gap period” between the end of the collection of preliminary countervailing duties and the beginning of the collection of any final duties imposed by the U.S. Department of Commerce.

    Retroactive application of preliminary countervailing duties

    The U.S. Department of Commerce has determined that preliminary countervailing duties will be applied retroactively for all companies except Canfor Corporation, West Fraser Mills Ltd., Tolko Marketing Sales Ltd., and Resolute Forest Products Canada Inc. Retroactive duties will be in force for the 90 days preceding the publication of the preliminary determination in the U.S. Federal Register.

    As a result of this determination, retroactive countervailing duties will apply to all imports of softwood lumber products captured within the scope of the U.S. investigations from 12:00 a.m. on January 28, 2017, through 11:59 p.m. on April 27, 2017.

    The applicable rates for such retroactive preliminary countervailing duties are:

    • 3.02% for J.D.Irving Ltd;
    • 19.88% for all other companies (except Canfor Corporation, West Fraser Mills Ltd., Tolko Marketing Sales Ltd., and Resolute Canada)
  • 25-04-2017 - Decision Memorandum for the preliminary determination related to scope

    The Decision Memorandum for the preliminary determination that was released by the U.S. Department of Commerce on April 25, 2017, confirms that the U.S. Department of Commerce has not made any changes to the scope of the countervailing and anti-dumping duty investigations at this time.  The scope remains the same as that indicated in the Notice of Initiation issued on December 15, 2016. Despite support from the U.S. Lumber Coalition (the Petitioner) to exclude certain products from the scope of the investigations, the U.S. Department of Commerce has decided to defer any decisions to narrow the scope until a later date, anticipated at the final countervailing and anti-dumping duty determinations.  Therefore, all products in scope are subject preliminary duties pending any U.S. Department of Commerce decision to exclude products from the scope of the investigations.  In the event that the U.S. Department of Commerce does exclude products from the scope of the investigations, cash deposits on excluded products will be refunded (although exactly when that will occur depends largely on when the U.S. Department of Commerce directs U.S. Customs and Border Protection to issue refunds). 

    The U.S. Department of Commerce has invited interested parties to provide comments on scope exclusions currently under its consideration within 7 days of the publication of the preliminary countervailing duty determination in the U.S. Federal Register. Publication in the U.S. Federal Register is expected to occur on April 28, 2017.  

    Canada does not provide advice to exporters on U.S. Customs and Border Protection classifications. However, it should be noted that the investigations will not change the existing U.S. HTSUS codes. The U.S. Department of Commerce will publish a notice in the U.S. Federal Register and issue instructions to U.S. Customs. The notice and instructions will contain a scope definition in a format similar to what was contained in the notice of initiation issued by the U.S. Department of Commerce on December 15, 2016. U.S. Customs and Border Protection is supposed to adhere to the written scope definitions, with the HTSUS codes provided for information purposes only.  Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the investigations is dispositive.

  • 25-04-2017 Company exclusions process – decision memo of United States Department of Commerce

    Early in the countervailing duty investigation on softwood lumber from Canada, the Government of Canada submitted a proposal to the United States Department of Commerce requesting that Commerce consider a company exclusions process which would allow companies that receive no countervailable subsidies, or that receive only de minimis (less than one percent ad valorem) countervailable subsidies to be excluded from the current US countervailing duties investigation. 

    In a decision memo released at the same time as its preliminary countervailing duty determination, the U.S. Department of Commerce has decided that it lacks the authority to conduct a company exclusions process in a company specific countervailing duty investigation.  In their April 25th decision memo on company exclusions, the U.S. Department of Commerce indicated that while their regulations specifically provide for company exclusions in an aggregate case, their regulations do not specifically provide for company exclusions in the company-specific countervailing duty investigation they are conducting.

    The Department took this position despite the fact that the U.S. Lumber Coalition (the petitioner) had filed a written submission to the U.S. Department of Commerce which indicated that a limited company exclusions process would be appropriate in this case. 

    The Government of Canada will have another opportunity in its case brief to provide comments as to why the U.S. Department of Commerce should consider a company exclusions process. As per the current U.S. regulations, case briefs are due seven days after the final day of verifications by the U.S. Department of Commerce.  Verifications are currently scheduled to be completed in late June 2017. 

    Outside of the company exclusions process, companies have the option to seek an exclusion in the context of an expedited review, which is provided for under the current U.S. regulations. If, in the context of an expedited review, companies successfully demonstrate to the U.S. Department of Commerce that they received zero or de minimis subsidies during calendar year 2015 they would be excluded from any countervailing duty order.  The expedited review process begins at the conclusion of the countervailing duty investigation -- companies interested in participating in this process must request an expedited review within 30 days of the date of publication in the U.S. Federal Register of any countervailing duty order, expected at the end of 2017 or early 2018.   Should companies choose to submit a request to the U.S. Department of Commerce for an expedited review, it is recommended that they retain U.S. counsel that specializes in trade remedy law.

  • 24-04-2017 - Joint Statement of Minister Freeland and Minister Carr in response to United States Department of Commerce countervailing duty preliminary determination

    Minister Freeland and Minister Carr issued a joint statement in response to these determinations by the United States Department of Commerce.

  • 24-04-2017 – United States Department of Commerce issues preliminary determination in countervailing duty investigation into imports of certain Canadian softwood lumber products

    The United States Department of Commerce issued its preliminary determination in its countervailing duty investigation into imports of certain softwood lumber products from Canada. The United States Department of Commerce found that Canadian softwood lumber imports into the United States were subsidised and calculated company specific-rates for the four mandatory respondents and one voluntary respondent as follows:

    • Canfor Corporation: 20.26%
    • Tolko Marketing Sales Ltd.: 19.5%
    • West Fraser Mills Ltd.: 24.12%
    • Resolute Forest Products Canada Inc.: 12.82%
    • J.D. Irving Ltd.: 3.02%

    For all other companies, the U.S. Department of Commerce has calculated an “all others” countervailing duty rate of 19.88%.

    Duties will come into effect upon publication in the U.S. Federal Register.

  • 24-04-2017 – United States Department of Commerce issues its preliminary determination of critical circumstances

    The United States Department of Commerce made an affirmative preliminary critical circumstances determination, concluding that there has been a surge of importations (known as “massive importations”) into the United States of Canadian softwood lumber products exported by J.D. Irving Ltd and all other Canadian softwood lumber companies with the exception of the four mandatory respondents (Canfor Corporation, West Fraser Mills Ltd., Tolko Marketing Sales Ltd., and Resolute FP Canada Inc.) 

    As a result of this determination, the U.S. Department of Commerce has indicated it will instruct U.S. Customs and Border Protection (CBP) to apply countervailing and anti-dumping duties retroactively to 90 days prior to the publication of both the anti-dumping and countervailing preliminary determinations in the U.S. Federal Register.

  • 13-01-2017 – The U.S. International Trade Commission’s preliminary finding of material injury caused by Canadian softwood lumber products

    On January 13, 2017, the U.S. International Trade Commission (USITC) published its preliminarily determination that the U.S. industry is materially injured by virtue of imports of Canadian softwood lumber products. This decision means that the U.S. Department of Commerce will continue its anti-dumping (AD) and countervailing duty (CVD) investigations into Canadian softwood lumber products. If the U.S. Department of Commerce makes affirmative preliminary determinations, preliminary AD and CVD duties would be applicable at that time.

    The U.S. Department of Commerce also confirmed it will proceed with a company-specific CVD investigation and identified that its mandatory respondents are West Fraser, Tolko, Canfor and Resolute Forest Products.

  • 23-12-2016 – For the purposes of the Softwood Lumber Export Permit Monitoring Program use of the HS 2017 changes will be delayed until January 1st, 2018

    With the imminent adoption by Canada of the World Customs Organization 2017 Harmonized System (HS 2017) nomenclature on January 1st, 2017, coupled with the United States’ delayed adoption of HS 2017 changes for Chapter 44 (Wood and articles of wood; wood charcoal) until January 1st, 2018 - the Softwood Lumber Division of Global Affairs Canada would like to inform you of the following:

    For the purposes of the Softwood Lumber Export Permit Monitoring Program, the implementation of HS 2017 changes will be delayed until January 1st, 2018. When applying for an export permit, Exporters and Brokers of Softwood Lumber Products should continue to use the Canadian tariff classifications set out in Annex 1B of the Softwood Lumber Agreement Between the Government of Canada and the Government of the United States of America, signed on September 12, 2006, as it read on October 12, 2015.

    A Notice will be published in the fall of 2017 announcing the implementation of HS 2017 changes as of January 1st, 2018.

    For further information please contact:

    Sylvain Emond
    Softwood Lumber Division
    343-203-3723
    Sylvain.emond@international.gc.ca

  • 28-11-2016 – Petition to United States Government to Launch Investigation into Imports of Certain Canadian Softwood Lumber Products

    On November 25, 2016, the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations filed petitions with the United States Department of Commerce and the U.S. International Trade Commission, requesting the initiation of countervailing, anti-dumping and injury investigations into imports of certain softwood lumber products from Canada.

  • 19-10-2016 – Possible Company Exclusions Process Regarding a Potential United States Investigation Into Imports of Certain Softwood Lumber Products from Canada

    In anticipation of a possible investigation by the United States into imports of certain softwood lumber products from Canada, the Government of Canada has developed an e-portal. The e-portal will assist companies to apply to be considered for exclusion from any countervailing duties that could result from this investigation. The e-portal will initially allow Canadian companies to: a) create their profiles and b) access the current version of the Company Exclusions package, which will be updated following initiation of an investigation by the U.S. Department of Commerce. Note that the e-portal will only enable companies to apply following initiation by the United States. Please note also that the United States has not agreed to undertake such an exclusions process and is under no obligation to do so.

    All information regarding eligibility for the company exclusions process will be available exclusively through the e-portal. For those that register, the e-portal administrators will email to advise of any changes to the Company Exclusions package. For further information, please see Notice to Exporters Serial 200.

    Questions regarding the company exclusions process can be directed to:

    Telephone: 1 800 438-9092
    Email: info@companyexclusions.ca
    E-portal web address: www.companyexclusions.ca

More recent developments

Reports

Monthly Export Reports (Canada-US)

2017

2016

More Softwood Lumber historic reports...

Contact Us

If you have questions or comments, please contact Global Affairs Canada at:

Softwood Lumber Division (TNS)
Global Affairs Canada
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario K1A 0G2
Fax: 613-944-8950
Email: softwood.boisdoeuvre@international.gc.ca