Positive outcome for B.C. and Canada on softwood lumber

British Columbia and Canada proclaim victory following an arbitration ruling under the 2006 Canada-U.S. Softwood Lumber Agreement

The governments of British Columbia and Canada were proclaiming victory Wednesday following an arbitration panel’s ruling on B.C.’s timber pricing policies under the 2006 Canada-U.S. Softwood Lumber Agreement (SLA).

“This is a total victory for British Columbia and Canada and is great news for B.C.’s lumber workers and their families,” said B.C.’s Minister of Jobs, Tourism and Innovation Pat Bell. “Our government has worked hard to defend and create jobs for British Columbians and to demonstrate that the U.S.’s complaints were unwarranted and groundless.”

Wednesday’s ruling by the London Court of International Arbitration proves that British Columbia’s market-based timber pricing policies are fully consistent with the SLA, and that B.C. has always honored its commitments under the agreement. The arbitration panel dismissed the U.S.’s complaint in its entirety.

“This is good news for forestry workers in British Columbia,” said Ed Fast, Canada’s Minister of International Trade and Minister for the Asia-Pacific Gateway. “We applaud the tribunal’s decision in favor of our lumber industry. This positive outcome is the result of our close collaboration with provincial and industry partners and proof that the SLA is good for Canada’s forestry sector.”

A 2011 complaint filed by the U.S. alleged that B.C. was selling softwood at less than market value, given an increase in the harvest of low-grade timber. The increased amount of low-grade timber in B.C. is the result of the unprecedented and devastating mountain pine beetle infestation. B.C.’s auction-based pricing system ensures that government has captured the full value of timber.

B.C. and Canada have maintained it would have been far more productive for the U.S. lumber industry to join them to increase demand for wood products across North America, such as what B.C. is doing with its Wood First initiative.

In the meantime, British Columbia has diversified its lumber export markets during the arbitration period. As part of Canada Starts Here: The BC Jobs Plan and through recent trade missions abroad by Premier Christy Clark and Bell, the B.C. government has focused on developing Asian markets, experiencing tremendous growth in recent years. For example, B.C. has more than doubled its lumber exports to China each of the past three years, helping to put people back to work in mills throughout the province.

 

The Canada-United States Softwood Lumber Agreement came into effect in 2006 and was set to expire in 2013. In January 2012, Canada and the United States agreed to an extension to October 2015, under the same terms and conditions.