Question Period Note: Softwood lumber trade dispute

SWL duties imposed by the U.S. on Canadian softwood lumber products are anticipated to continue to increase. The softwood lumber industry is facing multiple threats of tariff from the U.S.

• U.S. duties and threatened tariffs on Canadian softwood lumber are unjustified. Both duties and tariffs are net negative for the United States by creating economic uncertainty and worsening the housing affordability crisis.
• The reality is that the vast majority of lumber used in the United States is produced in the United States by American workers. Canada fills the gap by supporting the U.S. housing industry in the construction and renovation of millions of American homes.
• Canada believes that a negotiated resolution to the softwood lumber trade dispute is in the best interests of both countries, providing stability and predictability to the sector. However, the U.S. administration's approach to trade makes progress toward a resolution challenging.
• Canada launched the Trade Impact Program through EDC. This $5 billion dollar program will help exporters reach new markets for Canadian products and help companies navigate the economic challenges imposed by the tariffs.
• Canada will continue to explore the best ways to support the softwood lumber industry and our workers affected by the situation, while working closely with our industry partners and provincial governments.

The United States first imposed duties in the current round of the softwood lumber dispute in 2017 and has to date collected an estimated $10B CAD in duties. On August 19, 2024, the final results of the fifth administrative reviews (AR5) went into effect, increasing the combined duty rate to which most companies are subject to 14.40%, from the previous 8.05%.

On March 3, 2025, the U.S. Department of Commerce announced the preliminary results of its sixth administrative review of the anti-dumping duty order. The rates nearly tripled, rising from 7.66% to 20.07%. While these preliminary rates do not take effect, they indicate a significant increase in the final anti-dumping duty rates, which are expected to be issued in August 2025.

The preliminary results of the sixth administrative review of the countervailing duty order are expected by the end of March. An increase in countervailing duty rates is anticipated as well, with the combined anti-dumping and countervailing rates potentially reaching as high as 30%.

The prospect of further duty rate increases and threats of additional tariffs, coupled with fibre constraint issues and lower lumber prices, are creating additional challenges for industry across the country.

As in past rounds of the dispute, Canada's strategy to resolve the dispute has been to challenge the duties thereby constraining the United States' ability to impose artificially high duty rates on Canadian exports and securing refunds of collected duties for Canadian exporters. Canada's most important legal cases, those proceeding under NAFTA Chapter 19 and CUSMA Chapter 10, have been significantly delayed by U.S. tactics.

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