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

  • 23-06-2017 United States Department of Commerce Preliminary Scope Decision Memorandum

    In its preliminary scope decision memorandum, dated June 23, 2017, the U.S. Department of Commerce amended the scope of the U.S. anti-dumping and countervailing duty investigations. This decision took effect on the date of publication in the United States Federal Register, June 30, 2017. The scope was modified to exclude the following three products:

    • U.S.-origin lumber shipped to Canada for processing and imported into the United States is excluded from the scope of the investigations if the processing occurring in Canada is limited to one or more of the following: (1) kiln drying; (2) planing to create smooth-to-size board; or (3) sanding.
    • Box-spring frame kits are excluded if they contain the following wooden pieces – two side rails, two end (or top) rails and varying numbers of slats. The side rails and the end rails must be radius-cut at both ends. The kits must be individually packaged and must contain the exact number of wooden components needed to make a particular box spring frame, with no further processing required. None of the components exceeds 1” in actual thickness or 83” in length.
    • Radius-cut box-spring-frame components, not exceeding 1” in actual thickness or 83” in length, ready for assembly without further processing are excluded. The radius cuts must be present on both ends of the boards and must be substantially cut so as to completely round one corner.

    While the HTSUS codes are provided for convenience and customs purposes, the U.S. Department of Commerce has also advised that it will be removing the HTSUS category explicitly referring to edge-glued wood from the scope of the investigations.

    In addition, the U.S. Department of Commerce made further preliminary determinations regarding the scope of the investigations, including in relation to the definition of “finished products.”  Although the preliminary scope decision memorandum observes that finished products are outside of the scope of the investigations, it notes the absence of an express definition of such products in the scope definition. Accordingly, the U.S. Department of Commerce has proposed adding the following language to the scope of their investigations and has invited interested parties to provide comments: 

    • “Finished products are not covered by the scope of these investigations. For the purposes of scope, finished products contain, or are comprised of, subject merchandise and have undergone sufficient processing such that they can no longer be considered intermediate products, and such products can be readily differentiated from merchandise subject to these investigations at the time of importation. Such differentiation may, for example, be shown through marks of special adaptation as a particular product.
    • The following products are examples of products considered “finished,” for the purpose of the scope of the investigations: I-joists; assembled pallets; cutting boards; assembled picture frames; garage doors.”

    While not included in the proposed definition of “finished products”, the preliminary scope decision memo also lists the following products as examples of finished products that the U.S. Department of Commerce considers to be outside the scope of its investigations: assembled door frames; assembled furniture; assembled trusses; assembled window frames; assembled wood blinds; assembled wood toys; assembled wooden frames for paintings, photographs and mirrors; edge-glue wood; butcher block countertops; cross-laminated timber; clothes hangers; marquetry; open-webbed floor joists; tableware; trays; wall art.

    Outside of its clarification regarding “finished products”, the Department of Commerce also indicated that it considers the following products to fall outside of the scope of the investigations: finished furniture kits, and moldings to the extent the product matches the definition found in Chapter 44 of U.S. HTSUS.

  • 30-06-2017 United States Department of Commerce preliminary anti-dumping duties take effect

    The United States Department of Commerce published its preliminary anti-dumping duty determination in the U.S. Federal Register on June 30, 2017.

    As of 12:00 a.m. on June 30, 2017, the U.S. Customs and Border Protection will collect cash deposits equivalent to the applicable preliminary anti-dumping 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 anti-dumping duties cannot be in place for more than 120 calendar days, but the U.S. Department of Commerce can extend this deadline to 180 calendar days. Preliminary anti-dumping duties will therefore be collected by the U.S. Customs and Border Protection as of 12:00 a.m. on June 30, 2017, through 11:59 p.m. on October 28, 2017, which could be extended until 11:59 p.m. on December 27, 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 could occur as early as late October or early November if the Department of Commerce does not extend the final determinations, or possibly as late as early January 2018 if the final determinations are  extended.  Depending on the timing, there may be a short “gap period” between the end of the collection of preliminary anti-dumping duties and the beginning of the collection of any final duties imposed by the U.S. Department of Commerce.

    Retroactive application of  anti-dumping duties:

    The U.S. Department of Commerce has determined that preliminary anti-dumping 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, on June 30, 2017.

    As a result of this determination, retroactive anti-dumping 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 April 1, 2017, through 11:59 p.m. on June 29, 2017.

    The applicable rate for such retroactive preliminary anti-dumping duties is 6.87%.

  • 26-06-2017 Joint Statement of Minister Carr and Minister Freeland in response to United States Department of Commerce anti-dumping duty preliminary determination

    Minister Freeland and Minister Carr issued a joint statement in response to this preliminary determination by the United States Department of Commerce.

  • 26-06-2017 United States Department of Commerce announces its preliminary determination in anti-dumping duty investigation into imports of certain Canadian softwood lumber products

    On June 26, 2017, the U.S. Department of Commerce announced its preliminary anti-dumping determination with respect to imports of softwood lumber from Canada. The U.S. Department of Commerce preliminarily found that Canadian softwood lumber imports were dumped into the United States at prices below those for comparable sales in Canada or below the cost of producing the products.

    The U.S. Department of Commerce issued company-specific preliminary anti-dumping duty rates for the four mandatory respondents. All other companies will be subject to the “all others” anti-dumping rate of 6.87%, as outlined below.

    CompanyPreliminary anti-dumping duty ratePreliminary countervailing duty rateCombined preliminary duty rates
    Canfor Corporation7.72%20.26%27.98%
    Resolute Forest Products Canada Inc.4.59%12.82%17.41%
    Tolko Marketing Sales Ltd.7.53%19.50%27.03%
    West Fraser Mills Ltd6.76%24.12%30.88%
    J.D. Irving Ltd.           6.87% (All Others)3.02%9.87%
    All Others6.87%19.88%26.75%

    Preliminary anti-dumping duties will come into effect upon publication of the preliminary determination in the U.S. Federal Register. Anti-dumping duties will also be applied retroactively for 90 days prior to the publication date in the U.S Federal Register for all companies except the four mandatory respondents as a result of a separate preliminary critical circumstances determination.

  • 26-06-2017 United States Department of Commerce announces potential exclusion for Nova Scotia, Prince Edward Island and Newfoundland and Labrador

    The U.S. Department of Commerce announced that an exclusion for products originating from Nova Scotia, Newfoundland and Labrador, and Prince Edward Island is appropriate in both the anti-dumping and countervailing duty investigations. Commerce will continue to evaluate comments placed on the investigation record from interested parties and expects to make a final decision on the matter in late summer. Commerce has confirmed that, pending an exclusion from the scope of the investigations, producers in these three provinces will continue to be subject to anti-dumping and countervailing duties.

    U.S. Department of Commerce announcement

  • 01-06-2017 Government of Canada Announces Support for Forest Sector Workers and Communities

    Minister Carr, Minister Freeland and Minister Champagne announced $867 million in measures to support forest industry workers and communities affected by U.S. measures targeting softwood lumber. For additional information, please see the News Release and Backgrounder.

  • 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)

More recent developments

Reports

Monthly Export Reports (Canada-US)

2017

2016

More Softwood Lumber historic reports