Harper Government Secures Access to U.S. Market for Softwood Lumber Until 2015

Extending agreement that returned $5 billion to exporters and that ensures future stability is great news for Canadian lumber workers and their families, says International Trade Minister

January 23, 2012 - The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, and United States Trade Representative Ron Kirk today signed a two-year extension to the 2006 Canada-United States Softwood Lumber Agreement. The extension secures Canadian softwood lumber access to the U.S. market until 2015.

“The extension of the Softwood Lumber Agreement is great news for Canadian lumber workers and their families,” said Minister Fast. “This extension agreement will bring much-needed stability and predictability to the lumber industry. By extending the agreement, we are sending a clear message that our government is committed to securing predictable access to the U.S. market and strengthening the financial security of Canadians.”

The 2006 Softwood Lumber Agreement, which returned over $5 billion to Canadian exporters at a time when they needed it most, was set to expire on October 12, 2013. Canada and the United States have negotiated an agreement to extend it without modification and will consult on whether a further extension would be appropriate before the new expiration date in 2015. Canada has consulted widely with provincial and industry stakeholders, and they strongly support the extension to 2015.

“With one in five Canadian jobs generated by trade, our government is strongly committed to helping the forestry sector, and other sectors of our economy, expand and succeed in markets around the world,” said Minister Fast. “That’s why we’ll continue standing up for our exporters in markets around the world, including the United States—fighting for their interests and opening doors to new opportunities that will create jobs and prosperity in communities across Canada.”

The agreement to extend the Softwood Lumber Agreement constitutes a treaty under international law. Consistent with Government of Canada policy, the treaty will be tabled in the House of Commons for a period of 21 sitting days. It will come into force once Canada and the United States have notified each other that their respective ratification processes have been completed.

For more information on the Softwood Lumber Agreement, please consult Softwood Lumber.

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A backgrounder follows.

For further information, media representatives may contact:

Adam Taylor
Director of Communications
Office of the Honourable Ed Fast
Minister of International Trade and Minister for the Asia-Pacific Gateway
613-992-7332
adam.taylor@international.gc.ca

Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000
Follow us on Twitter: @Canada_Trade

Backgrounder - Softwood Lumber Agreement

The Canada-United States Softwood Lumber Agreement was signed on September 12, 2006, and entered into force on October 12, 2006. The agreement was initially set to expire in October 2013; however, Canada and the United States have negotiated an extension to October 2015.

The landmark agreement has served the Canadian industry well in difficult economic circumstances. It maintains stable and predictable access to the U.S. market, protects the ability of provinces to manage their forest resources, and provides for independent and impartial rulings on matters relating to softwood lumber trade disputes.

Although further extensions beyond October 2015 are not explicitly foreseen in the text of the agreement, Canada and the United States intend to consult before that time on whether a further extension would be appropriate. The Government of Canada will consult with the provinces and industry on the next steps before the expiration of the extended agreement.

The Softwood Lumber Agreement has facilitated the return of over $5 billion to Canadian exporters and has generated over $1.3 billion in export charge revenue for provinces. Under its terms, money collected from export charges remains in Canada and is subsequently distributed to provinces.

In addition to providing stable access to the U.S. market for the Canadian softwood lumber industry, the Government of Canada has also actively expanded market opportunities for Canadian wood products. Since April 2009, under the Canada Wood and North American Wood First programs, $40.1 million has been approved to open new market opportunities in Europe, Japan, South Korea, China, India and the Middle East and to increase the use of wood products in non-residential construction in Canada and the United States.

Softwood lumber is an important sector of the Canada-U.S. bilateral trade relationship. Softwood lumber exports to the U.S. totalled $2.6 billion in the first 11 months of 2011. Exports from B.C. accounted for almost 58 percent of that total; from Quebec, 16 percent; from New Brunswick and Alberta, 9 percent each; and from Ontario almost 6 percent. The Canadian wood products industry and its supporting industries employed 164,000 people in 2010; 33 percent of these were in B.C., and 28 percent in Quebec. Canadian production in the first 10 months of 2011 was an estimated 19 billion board feet.