Question Period Note: Increase in countervailing and anti-dumping duties imposed by United States on Canadian softwood lumber

Increase in countervailing and anti-dumping duties imposed by United States on Canadian softwood lumber

• Canada Economic Development for Quebec Regions supports the development of SMEs in the forestry sector, as these businesses are the drivers of economic development in many regions.
• Canada Economic Development for Quebec Regions supports projects that generate economic growth and diversification in forest communities so that they can diversify their economies and be more resilient.
• Since November 2015, Canada Economic Development for Quebec Regions has approved $55 million in aid for 79 projects in this sector, generating $405.5 million in investment and contributing to the creation of 1,617 jobs.
  Supplementary response
• CED supports the growth of SMEs at all stages of their development, whether it be for their start-up, or for innovation, productivity or growth projects or projects targeting the development of foreign markets, through its regular programs and its temporary initiatives. CED mainly supports wood processing businesses.
• CED pays special attention to communities experiencing slow economic growth, particularly those dependent on a single sector of the economy, such as the forestry sector.

• On November 25, 2021, The U.S. Department of Commerce (DOC) announced its intention to double duties (countervailing and anti-dumping) on imports of Canadian softwood lumber for 2022, raising them from 8.99% to 17.9% for the industry as a whole in Canada, with individual rates varying from company to company. Quebec businesses that export lumber to the United States will see their duties go up, which will have an impact on their competitiveness.
• Global Affairs Canada, in cooperation with CED, ensures that project funding proposals from the forestry industry do not raise any issues of non-compliance with international agreements.
• The forestry sector has a presence and generates economic spinoffs in 83% of municipalities in Quebec. The sector is a major economic force for 152 municipalities, where it accounts for 10% or more of all jobs.
• Most forestry sector businesses are located in the regions of Saguenay–Lac-Saint-Jean, Chaudière-Appalaches, Abitibi-Témiscamingue and Bas-Saint-Laurent.
• Quebec’s wood industry — forestry operations, pulp and paper, and wood product manufacturing —generates a total of 60,545 direct jobs divided among 2,800 businesses throughout the province.
• In 2019, wood product manufacturing (wood processing) represented:
  * 28,955 jobs (0.7% of total)
  * 1,000 businesses (0.4% of total)
  * $2.2 billion (0.6% of GDP and 4.4% of manufacturing sector)
  * $2.6 billion in exports (2.9% of total)
  ** Softwood lumber exported by Canada consists of spruce, pine and fir, used primarily for framing in the construction industry.

Issues and opportunities for wood product manufacturing companies:
* Sawmills are unable to ramp up their production quickly, in particular because of a shortage of fibre, difficulties hiring workers and the saturation of production capacity.
* The sector must shift to secondary and tertiary wood processing, with higher value-added. These value-added products make Quebec wood products stand out in comparison with those produced elsewhere in the world and represent the future of Quebec’s wood industry.
* The growing importance given to climate change and sustainability offers a number of possibilities: demand should grow for cost-effective, low-carbon solutions in the forestry sector.

On November 25, 2021, the U.S. Department of Commerce announced its intention to double duties (countervailing and anti-dumping) on imports of Canadian softwood lumber for 2022. This will have an impact on Quebec businesses. CED supports businesses in the forestry sector, mainly wood processing businesses, which are the drivers of economic development in a number of regions, in compliance with our trade agreements. CED also supports the communities that depend on this sector, to help them to diversify their economies and become more resilient.