West Hill Collegiate Institute - International Business

Established in 2012, by Daniel Shafransky and Raymond Ahmad

Lumber III: 1991-1996

Source: Softwood Dispute: American tariff threatens free trade talks

Image result for canada us softwood lumber dispute

  • Shebah Popalzai
  • Barathe Sivayokar
  • Shana Elankeeran


  1. The Canada-US softwood lumber dispute is one of the longest and most significant trade disputes between the two countries in modern history. There was a seven-year renewable agreement, Americans return $4 billion of $5 billion in punitive duties collected from Canadian lumber producers. United States would get $1 billion that would help communities affected by dispute. The deal was signed by David Emerson the international trade minister and U.S. trade representative Susan Schwab on September 12, 2006. Central to the dispute has competition between Canadian and US softwood lumber companies, there is conflict with forestry management styles. Softwood forests are found in Canada and United States. The softwood forests in Canada is able to make up two-thirds of forested land available for timber production. The softwood deal had been signed by the governments of Quebec, Ontario and British Columbia. The largest Canadian softwood forests are in British Columbia. Softwood is used for furniture, mouldings, doors and windows. Canada is one of the largest softwood lumber producers and exporters in the world, it has a large portion of British Columbia’s industry. Canadians export softwood lumber to the United States has created a multi-billion dollar industry. There are thousands getting employed across the country. Canada exported 21.5 billion board feet of lumber to the US in 2005, making about $8.5 billion in trade. Canada has more than 90 percent of the nation’s forests lie within lands owned by federal or provincial governments (also known as Crown land). The provinces own about 78 percent of Crown land and the federal government owns only 22 percent. The provinces own 90 percent of land known as the productive forest land, the land is capable of producing more than a certain quantity of wood.

  2. This video discusses about the softwood lumber agreement in the United States and Canada. Canada is trying to get most of their money back but can’t right away. There is about 5 billion dollars that has to be returned to Canada regarding the softwood lumber deal. The United States wants to wait a couple of years to be able to pay the amount, as they said; “to process a million checks.” Another idea they’ve come up with is to make an arrangement for the industry to get a hold of a huge amount of money, the Canadian government is trying to do their best to get a hold of it. The video explains where people in the United States stand, what they are going to do about and what Canada is going to do with the fact they lost a lot of money and the United States owing them a lot. The government of Canada wants to buy out the industry of claims by paying to that 80% of or more less of 80% of the value of their claim and then so after Canada will try and work their way through into getting the money owed.

    Video: http://www.cbc.ca/player/play/1822837286

  3. Part 1
    In 1991 of October, Canada withdrew from the Memorandum of Understanding of the Softwood Lumber Agreement and ended the 15 percent charge. Canada’s lumber imports were sporadically charged as the same rate of the memorandum export tax rate. After the commerce self initiated their CVD investigation, they made their final affirmative with a subsidy rate of 6.5% in 1992.

    This decision from the commerce did not settle with Canada very well. Canada challenged the Commerce’s initiation before a General Agreement on Tariffs and Trade (GATT) started under the Canada-U.S Free Trade Agreement (FTA).

    A legal warfare between Canada and U.S started due to the Free Trade Agreement. The FTA reviewed the CVD intentions under three circumstances, one of them was an analysis including the Commerce’s regulations, whether the subsidy program had demonstrable trade effects, and to recalculate the benefit from BC log export restraints. The effects of these battles made U.S revoke from their intention in 1994.That same year, Canada and the United States agreed to implement a consultative process to which that the softwood trade can be disintegrated.

    After U.S discussed the matter in D.C court, the discussion led to Canada and U.S coming to terms for a new Softwood Lumber Agreement (SLA), on April 1, 1996. A tariff rate was established and was disputed among British Columbia, Alberta, Ontario and Quebec. Canada was able to export 14.7 billion board feet annually to the United States free of any export charges or duties. Anything above this feet can result to charges, and U.S took a step back on the duration of this trade agreement and only resulted as an effect to the provinces taking practice.


  4. Part 2
    In this CBC archive, we find out about the NAFTA’s role in the free trade agreement between U.S and Canada and their effect on Mexico. We know that NAFTA helps these trades more easier amongst the three nations by eliminating most quotas and tariffs. This is agreed to be phased over 15 years, having to involve at least 6.5 trillion dollars. The agreement has created some uproar within Canada due to the amount of suffering Canada went through from the U.S. Industries such as car manufacturing, the textiles industry, and softwood lumber are just a few factors of the trade agreements between these nations. The softwood lumber (environmental factor in the video) is the only factor in the trade agreement that is fair amongst all countries and more profitable too. Though this one factor can be a plus, the rest of the factors don’t do any good in terms of the canadian people, but only a few can say that opening markets to the Mexico can give a boom to Canada’s economy. While this can be a plus, the job rates won’t increase at all, but the canadian automobile industry still in business with its 45 billion dollars. The only upside potential that Canada wouldn’t get is that Mexico would be better in their gas and oil resources which is not ruled by other foreign countries.


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