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| You are here: Home > Features > Softwood Lumber Dispute |
Impact of the Softwood Lumber Dispute
From lost jobs to strained
bilateral relations
The negative impact of the softwood lumber dispute
has been felt, both in Canada and the United States:
Increased Unemployment levels. In
Canada, the softwood lumber dispute has cost thousands of jobs.
The impact has been felt most strongly in British Columbia, which
is responsible for over 50 percent of Canada’s softwood
lumber exports. Approximately 15 percent of jobs in British Columbia
are either directly or indirectly related to the forestry industry.
Between April 2001 (when the first set of softwood lumber duties
were applied) and December 2002, over 10,000 jobs were lost in
the province. The impact has been most severely felt in hundreds
of rural communities which rely on logging and sawmills for employment – both
directly through jobs in these areas, and indirectly through
the service industries (such as schools and hospitals) that are
generated in the community.
While the dispute has not yet had a major impact on employment in
the United States, it is true that employment in industries that
use lumber (including companies that sell lumber, and housing
contractors) far outweighs employment in industries that produce
lumber. Placing duties on Canadian lumber pushes up the cost
of the lumber, which, in turn, can negatively impact employment.
Some analysts warn that continuing to place duties on Canadian
softwood lumber will ultimately lead to higher job losses than
would be the case if the duties were removed.
Higher US Housing Prices – The tariffs for
Canadian softwood lumber have led to, on average, a $1,000 (US)
increase in the cost of a new home. While this figure may seem
relatively low, given that the cost for even a modest new home
in the US can easily run into six figures, it has limited the
number of Americans who are eligible for a mortgage by approximately
300,000. Consequently, US consumer groups, such as the Alliance
of American Consumers for Affordable Homes, have lobbied
for an end to tariffs on Canadian softwood lumber exports.
Strained relations between Canada and
the United States. Despite
the publicity surrounding this one issue, over 95 percent
of bilateral trade between Canada and the United States
is problem-free. Nonetheless, the ongoing dispute surrounding
softwood lumber has led to threats of a trade war by Canada,
and a US lobby group launching a constitutional challenge
to the North American Free Trade Agreement.
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