When it comes to Canada’s softwood lumber market, 2017 has been anything but business as usual.
Canada has long been in dispute with the United States concerning the sale of softwood lumber – as our southern neighbours argue that it undercuts the ability for American producers to compete, costing them industry jobs.
President Donald Trump seems to be finally acting upon this fear, and is planning to roll out a 25 per cent tariff on all softwood lumber.
This is devastating news to Canadians in the lumber industry. Analysts are suggesting that it could cost as many as 8,000 jobs, and will be detrimental to Americans as well.
In late May, Natural Resources Minister Jim Carr announced that the federal government was making $867 million available in loans to help ease the burden of Trump’s tariffs.
With the softwood lumber industry souring to the south, China and Canada are seeing yet another opportunity to further their trade relationship.
In late April, Minister of International Trade François-Philippe Champagne and Finance Minister Bill Morneau visited China to take a further look at what the free trade deal that was proposed last year by Prime Minister Justin Trudeau might look like.
“There’s never been a better time to diversify . . . That’s what I was doing in China,” Champagne said in an interview following his trip.
During that trip to China, Champagne attended several meetings for issues such as increasing a female entrepreneurial presence in Chinese business, though softwood lumber was the chief concern of the excursion.
“Leaving no stone unturned for softwood producers; this is about more than selling wood, it’s about providing (Canadian) solutions to global problems,” the minister wrote in a tweet.
His comment touches on two key issues. First, Champagne has guaranteed the federal government will fight with the lumber industry every step of the way, witnessed by the federal loans made available to lumber companies in late May.
Secondly, Canada, a resource-rich country, has exactly what China needs in this transitionary moment in their history. With its enormous population and need for more housing, China could benefit from a partner who has sustainable resources to spare.
Softwood lumber is known for its versatility, a building material that can be used for many different kinds of projects, including housing. On top of this, it’s affordable.
Furthermore, softwood lumber is known as an environmentally friendly building material. It is biodegradable and a renewable resource.
It grows naturally, a huge benefit when compared to the pollution that comes out of steel or aluminum production.
Studies have shown that wood creates a smaller environmental footprint than using other materials, performing better in categories such as global warming potential, resource use, embodied energy, air pollution and water pollution.
If China wants to move away from its environmentally detrimental practices, softwood lumber is a good place to start.
In recent years, China has shown that it is ready to commit to being more environmentally sensitive.
The country has pledged to cut its carbon emissions per unit of GDP by 60-65 per cent from its 2005 levels by the year 2030, and raise its use of non-fossil derived energy to roughly 20 per cent.
Whereas the U.S. recently pulled out of the historic Paris Accord, China is planning to partner with the E.U. to strengthen its commitment to the climate agreement.
In words aimed at Trump, Chinese Premier Li Keqiang stated that fighting climate change is “a global consensus” and an “international responsibility.”
With this apparent commitment to environmentally friendly practices and a need for building materials, China might just be the partner Canada needs for its softwood lumber exports.