Downie Timber says no layoffs planned as a result of softwood lumber tariffs

Downie Timber says it has been preparing for tariffs since last Softwood Lumber Agreement was signed in 2006.

Downie Timber sends about 38 million board feet of cedar to the U.S. each year

Downie Timber sends about 38 million board feet of cedar to the U.S. each year

Downie Timber is not planning any layoffs as a result of tariffs imposed on softwood lumber exports to the United States.

“There is no plan at all of changing, shifting or reducing the production we’re doing right now,” said Nick Arkle, the co-CEO of Gorman Brothers, which owns Downie Timber. “Our employees can rest assured we’re doing everything to minimize this impact and carry on as we have done.”

The Review spoke to Arkle Wednesday morning, two days after the U.S. Commerce Department announced it was imposing a 20 per cent tariff on all softwood lumber exports from Canada.

Arkle said the company was expecting this move and had been preparing it since 2006, when the last Softwood Lumber Agreement was signed between Canada and the U.S. That agreement expired on Oct. 12, 2015, but the U.S. didn’t impose new tariffs until this week.

“We were prepared for this. This didn’t come as a surprise. We were hoping for the best but we had been planning for the worst for the best part of 10 years,” said Arkle. “We knew we would probably end up in another tariff situation or duty situation, and we’ll end up with another negotiated agreement at some point.”

He said Downie has been working on diversifying its sales in order to reduce reliance on the U.S. According to Arkle, 72 per cent of its cedar, or 55 million board feet, went to the U.S. in 2006. In 2016, 62 per cent went to the U.S., or 38 million board feet.

“We recognized we had to reduce our dependency on the U.S.,” he said. “Now it’s a case of working with them through this next period of duties, which will then lead to a managed trade deal of some sort.”

At the Revelstoke Community Forest Corporation, which harvests and sells logs, the impact will be indirect, if there is any. “For us it’s business as usual, with knowledge mills might start to put a bit of downward pressure on the price of logs they purchase,” said general manager Mike Copperthwaite.

Kozek Sawmills owner Joe Kozek said 80 per cent of his product goes to eastern Canada and he won’t be impacted.

“I think the Revelstoke mills are in a good position to withstand the duty,” he said. “They’re old family businesses that have been prepared for this to happen for quite some time.”

This is the fifth time since the dispute first reared its head in 1982 that the U.S. has imposed duties on Canadian lumber exports.

Both the federal and provincial governments have vowed to fight the duties, while the dispute has become an issue in the B.C. election campaign.

During last week’s Columbia River-Revelstoke all-candidates forum in Revelstoke, NDP candidate Gerry Taft accused the BC Liberal government of not doing enough to resolve the dispute since the last agreement expried 1.5 years ago, and that more efforts should be made to manufacture wood products in B.C. instead of shipping raw logs abroad.

BC Liberal candidate Doug Clovechok said the provincial government had been proactive by appointing David Emerson, the former CEO of Canfor and a former federal cabinet minister, as B.C.’s trade envoy for the dispute. He also noted efforts to increase exports to Asia.