With the U.S. Department of Commerce recently announcing it is raising countervailing duties on softwood lumber from Canada from 6.74 per cent to 14.63 per cent, many in the forestry industry are concerned, to say the least.
With this new increase, combined with the anti-dumping duties of 20.56 per cent imposed on Canadian forestry, the total has now reached 35.19 per cent, leaving many in the industry feeling anxious, especially in the North.
John A. Brink, owner of Brink Group of Companies in Prince George, has already been feeling the effects of this ongoing trade war, as his locations in the North have had to downsize to a third of their employees in order to mitigate the impact of ongoing trade tariffs and duties imposed by the United States.
“We already can feel it,” said Brink. “Maybe we don’t directly feel it, but indirectly, we already feel it. That’s the way it is. We probably have shut down to around 130-150 people … and directly it’s going to affect everybody. If the economy goes down and businesses are shutting down or leaving, that’s going to affect the whole community; that’s the facts of reality.”
Brink told The Citizen that a concerning number of the larger forestry companies’ locations have already been shutting down across the North, leaving medium- to small-sized ones to fend for themselves in a hostile market.
He added that unless the costs of these products rise to meet the new duties imposed by the States, these smaller companies will be in more hot water than they already are.
“We’ve been in business for 50 years, as a secondary manufacturer,” said Brink. “We don’t get handouts, we get no subsidies, and it’s always a struggle to have access to time. That has been one of the main challenges. A lot of the mid-sized companies are having a difficult time because the duty applies to all others, which is in excess of 35 per cent. So unless the prices come up, everybody was already losing money. Now it will make it much, much more difficult. Unless prices come up — and there is no evidence of that at this moment — I would speculate that quite a few of the mid-sized companies will either curtail or shut down until this thing settles.”
Brink also believes the uncertainty caused by these ongoing increases in duties and on-again, off-again tariffs is by design, to keep Canadian companies unbalanced and uncertain.
“That’s the whole point,” said Brink. “If you’re in business, you need reasonable expectations of what will happen next and why. If you don’t know, and if there’s only one man that makes all the decisions, then everybody wakes up in the morning and says, ‘Let’s do this,’ or ‘Let’s do that,’ it makes it extremely difficult. I think what governments have to do in Canada is be firm in terms of being aware of the companies that are being affected, help as much as we can, and reduce or eliminate the duties. To give handouts — even a $1.2 billion — is not by far sufficient to be helpful. It should have another zero, in my opinion, but the other part of it, the Americans will say, subsidy. And I believe all of those things we have to consider before we get too far clear of debate.”
Despite his long and successful career in the Prince George area, he said in his interview with The Citizen that, at least in his company, times have never been harder than they are right now.
“The objective of the president of the United States is to make Canada the 51st state, which is ludicrous and absurd,” said Brink. “It’s a very, very troubling point. It’s been 60 years since I came to Prince George in 1965. In 1975, I started doing forestry products and a number of other companies. It has been a challenge along the way, but it has never, ever been as difficult as it is today. No question about that. Where are they going to go from here? Who knows? I believe even Donald Trump doesn’t know. Whatever he feels like tomorrow morning.”
While this uncertainty is currently hurting Canada’s lumber industry, Brink said it’s also going to do no favours for neighbours on the other side of the border as well.
“The United States cannot survive without our lumber in terms of building,” said Brink. “They have a chronic shortage of between 30 and 40 per cent of lumber requirements, although their leadership said, ‘Oh, we can cut lumber in the parks and all the other places,’ you have to then put in place infrastructure that cuts the lumber, and that is very, very expensive and it’s not going to be done on a short-term basis. So they do have a shortage. They have to find it somewhere else in the world; the likelihood is more than any other place in Canada. Canada plays a major, major role, and not only in lumber, but also steel, aluminum, and all kinds of other things, and projects on and on and on.”
Despite his company’s setbacks, he is still firmly optimistic about the future, not only for his company but the economic growth of the North.
“We have huge, huge potential, but we have to be on the ball,” said Brink. “We have to be proactive, find new markets for new products for lumber manufacturing. But also in terms of mining, reduce the bureaucracy. We have the highest cost of lumber manufacturing and access to fibre in the world, virtually.
“A lot of that is bureaucracy and, of course, policy provincially and to a certain extent, federally. We’ve got things to do there that we can do in-house, in the province, and in Canada. To become more effective, and more efficient… We live in the best place in the world as far as I’m concerned. In Canada, we have it all, and all we have to do is be more innovative, add more value to all the resources that we have, not only lumber, but also all the mining resources.”
