Concerns rise as Canada’s two main railways appear set for a work stoppage. In other Business news: Interfor sells its closed Philomath, Oregon sawmill; a fire destroys Port Alberni’s old Somass mill site; the United Steelworkers call the increase in US lumber duties ‘pure protectionism’; a feature on Kalesnikoff Lumber’s mass timber pivot; taking stock of Suzano’s purchase of Arkansas’ Pine Bluff mill; and NY State announces forestry grants, while Georgia looks to boost its timber industry.
In Forestry news: a professor says Jasper’s wildfire is not a catastrophe from an ecological perspective; an ecologist says a fire deficit is helping fuel California’s wildfires; Turkey continues to battle forest fires amid evacuations; forest loss is said to intensify climate change in Africa; and Australia seeks consultation on its new illegal logging laws.
Finally, is it time for Canadian forest products firms to focus on political risk management? (Part 2 of 2).
Kelly McCloskey, Tree Frog Editor
They call it the granddaddy of international trade disputes, and in the latest round, Canada has been hit once again by the U.S. The dispute over exports of Canadian softwood lumber to the U.S. has been ongoing since the early 1980s, with the Americans insisting that the Canadian lumber industry is unfairly subsidized. The U.S. Department of Commerce claims this entitles the U.S. to levy tariffs on lumber. These charges have already cost Canadian producers $10 billion since 2017 and have led to thousands of job losses in Canada. …The Americans are now increasing their current duties on Canadian softwood lumber products from 7.99% to 14.54%. …The U.S. increase is also retroactive, meaning it will apply to 2022 exports as well as future shipments. Canadian industry leaders and governments are outraged. …But if Donald Trump is elected president in November, expect worse. It was under his presidential watch in 2017 that the tariffs went as high as 24%.
Freight trains across Canada could come to a grinding halt as soon as Thursday with roughly 9,000 railway employees nearing a looming strike or lockout date. …The Teamsters Canada Rail Conference issued a news release saying unless the parties can reach a last-minute agreement, workers will be off the job as of 12:01 a.m. Eastern time Thursday. Not long after the union’s statement, CN Rail issued a notice that it intends to lock workers out at that same time unless an agreement or binding arbitration is achieved. The company says no meaningful progress has occurred despite weekend labour negotiations. …Barry Prentice, at the University of Manitoba’s Asper School of Business, said Canada was already feeling the impact of the looming shutdown. …More than half of the country’s exports travel by rail. Industry groups are also warning about the ripple effects of the stoppages on the wider Canadian economy.
The union representing thousands of workers at Canadian Pacific Kansas City says it has served a 72-hour strike notice to the railway. The Teamsters Canada Rail Conference says in a press release that unless the parties can reach a last-minute agreement, workers will be off the job as of 12:01 a.m. Eastern time Thursday. The Teamsters say CPKC has served notice it will lock out its members as well as change the terms of collective agreements, which the union says forces it to serve a strike notice to protect workers. …Shortly after, Canadian National Railway said in a statement it issued a lockout notice to the union and would have “no choice” but to continue shutting down operations. CN said “despite negotiations over the weekend, no meaningful progress has occurred.” Both CPKC and CN have been halting shipments in preparation for potential work stoppages by a combined 9,300 workers at the two railways.
U.S. officials warned Canada in February that its tariffs on Canadian softwood lumber would increase, but a final decision on Tuesday that nearly doubled them was a body blow to an already challenged industry. The U.S. Department of Commerce announced its decision, which will start being applied to American imports of Canadian lumber almost immediately, to increase the total tariffs to an average rate of 14.54% from 8.05% a year ago. “It’s not welcome at all, particularly for B.C. (which is) faced with a number of challenges,” said Kurt Niquidet, of the B.C. Lumber Trade Council. “We’re a high-cost producer, so this just adds to the cost of shipping to our major market.” …“You might see curtailments as a result, all depending on how markets, more broadly, move over the next little while,” Niquidet said. …The new tariffs add US$58 to the price paid by U.S. buyers compared with $32 under the previous rate.
BURNABY, BC — Interfor announced that it will indefinitely curtail operations at its sawmills in Meldrim, Georgia and Summerville, South Carolina. These curtailments are in response to persistently weak lumber market conditions. Log deliveries will be curtailed immediately, followed by an orderly wind-down of operations, which is expected to be completed by the end of the third quarter of 2024. Both sawmills produce kiln-dried Southern Yellow Pine dimensional lumber and have a combined annual capacity of 330 million board feet. These indefinite curtailments will impact approximately 180 employees across both facilities. Interfor expects to mitigate some of the impact on affected employees. The expected impact of these curtailments on production volume for the remainder of 2024 was included in Interfor’s press release dated 
New residential construction in the U.S. saw a steep drop in the month of July, according to a report released by the Commerce Department on Friday. The report said housing starts plunged by 6.8% to an annual rate of 1.238 million in July after jumping by 1.1% to a revised rate of 1.329 million in June. Economists had expected housing starts to slump by 1.7% to an annual rate of 1.330 million from the 1.353 million originally reported for the previous month. With the sharp pullback, housing starts tumbled to their lowest level since hitting an annual rate of 1.053 million in May 2020. Single-family housing starts led the way lower, plummeting by 14.1% to an annual rate of 851,000 in July after edging down by 0.1% to rate of 991,000 in June. On the other hand, multi-family starts soared by 14.5% to an annual rate of 387,000 in July after surging by 4.6% to a rate of 338,000 in June.
The Coastal First Nations-Great Bear Initiative (CFN) and the Government of BC are renewing their commitment to work together through a reconciliation agreement that builds off the success of their 2009 reconciliation protocol and 2020 Pathway to Reconciliation MOU. …Christine Smith-Martin, CEO of the Coastal First Nations-Great Bear Initiative said, “We have improved land and marine use planning throughout the Great Bear and launching a marine protected area network that sets a new precedent for conservation and sustainable management. We look forward to working together on Reconciliation 2.0.” The Province is contributing $1.6 million annually for implementation funding for four years. …The agreement outlines how coastal First Nations and the Province will work together to increase the quality of life throughout the area. This includes… clean energy, and opportunities in coastal forestry, and reinforces CFN’s conservation efforts in the Great Bear Rainforest.
