B.C. Forests MInister Doug Donaldson (right side centre) meets with housing ministry officials in Jiangsu province, China, Nov. 15, 2017. Jiangsu, population 79 million, is China’s pilot project for wood and hybrid wood construction. (B.C. government photo)

B.C. VIEWS: China a better partner for forest industry than U.S.

B.C. is slowly winning the softwood lumber war

B.C. Forests Minister Doug Donaldson is back from his first wood industry trade mission to China and Japan, an annual journey I was fortunate to go on last year.

China especially is an eye-opening experience, and depending on the smog, an eye-irritating experience as well. The sheer scale of urban development around cities like Shanghai and Nanjing is striking – they don’t build a high-rise, they build eight or 10 or 12 at a time.

Nanjing is the commercial centre of Jiangsu province, where the Chinese central government has ordered a pilot project to phase in wood and engineered wood, starting with roof trusses and pre-fabricated infill walls for concrete buildings. They’re working with B.C.-developed wood construction because “it’s energy efficient, it’s green, it’s light, it’s fast,” says Rick Jeffery, chair of the national industry group Canada Wood and a veteran of Asia trade.

This is important in a vast country that is not only choked with pollution, it’s running low on limestone, a key component of concrete. Based on 2016 rates of consumption, China is using as much concrete in two years as the U.S. would in a century, and that’s with their growth slowed from its peak a few years ago.

One of the pictures sent back by B.C. government staff shows Donaldson attending a meeting of the Ministry of Housing and Urban-Rural Development (MOHURD) for Jiangsu, with dozens of people crowded around a long boardroom table. The province’s population is approaching 79 million.

In a phone call from the Tokyo stop last week, Donaldson said once the government decides on an action, “things happen quickly in China.” The national MOHURD directs the provinces and essentially controls construction.

Donaldson noted that President Xi Jinping, in his recent sweeping address to the 19th Congress of the Communist Party of China, emphasized clean, pre-fabricated building systems.

Things don’t happen quickly in wood industry talks with the U.S., where the central government isn’t ruled by dictators but by its lumber industry lobby. Using the same subsidy accusations that have failed repeatedly in international trade rulings, the U.S. has forced Canadian softwood producers to fork over $500 million in countervailing and anti-dumping duties since last spring alone.

This American shakedown of Canada has been going on for decades. In the “managed trade” arrangement that ran from 2006 to 2015, Canadian lumber mills paid punitive duties averaging about 11 per cent. Now, after a preliminary ruling was generously scaled back by the U.S. Department of Commerce, our producers are paying about 20 per cent, directly into the pockets of U.S. lumber barons.

B.C. Council of Forest Industries CEO Susan Yurkovich has repeatedly pointed out that this U.S. protectionism doesn’t work. It can’t work, because the U.S. doesn’t produce enough lumber to meet its own construction demand. If it blocks lumber from B.C., which represents half of Canada’s exports south, it will have to buy lumber from overseas.

The real purpose of this U.S. industry trade bullying is to push up the price of their products, and that is working extremely well. U.S. lumber and structural panel prices hit a near record last week.

The good news for B.C. is that the price is high enough that sales to the U.S. are easily covering the cost of duties. That’s being passed on to U.S. builders and homeowners.

One of these days, Trump and his team of trade geniuses may figure this out and begin to consider free trade in lumber. Until then, Canada and B.C. are well advised to continue working on the Asia market.

Tom Fletcher is B.C. legislature reporter and columnist for Black Press. Email: tfletcher@blackpress.ca


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

QUIZ: Test your knowledge of Victoria Day

How much do you know about the monarch whose day we celebrate each May?

Tool and camping gear lending library to open in Revelstoke

Samantha Wex Special to the Review The North Columbia Environmental Society is… Continue reading

Two senior City of Revelstoke staff on paid leave

The City of Revelstoke’s Chief Administrative Officer, Allan Chabot and the city’s… Continue reading

Okanagan-Shuswap Weather: Most long-weekend rain has already fallen

A mix of sun and cloud is expected for the last two days of the the Victoria Day weekend.

Weather holds up for Rutland May Days

60th annual May Day midway, market and entertainment saw hundreds of attendees

Raptors beat Bucks 118-112 in 2OT thriller

Leonard has 36 points as Toronto cuts Milwaukee’s series lead to 2-1

Former Greyhound Canada employees gather in Okanagan to say a final farewell

“Greyhound may take our jobs but they will never take our friendships,” says former bus driver

Kelowna firefighters douse blaze in hedges

The cause of the fire on Renfrew Road is under investigation.

‘Teams that win are tight’: B.C. Lions search for chemistry at training camp

The Lions added more than 50 new faces over the off-season, from coaching staff to key players

Rescue crews suspend search for Okanagan kayaker missing for three days

71-year-old Zygmunt Janiewicz was reported missing Friday

Okanagan Springtime Regatta draws more than 50 sailboats

Sailors treated to windy, excellent long weekend conditions on Okanagan Lake in Kelowna

B.C. VIEWS: Reality of our plastic recycling routine exposed

Turns out dear old China wasn’t doing such a great job

Okanagan tattoo fundraiser draws tons of support

Lineup around the block in Vernon for start of Five Fathoms Tattoo event for Children’s Hospital

Most Read