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Canada’s softwood lumber industry

The softwood lumber industry is a key pillar of Canada’s highly integrated forest sector. Demand for softwood lumber supports many rural and Indigenous communities through harvesting jobs and in-forest operations. By-products from softwood lumber production supply other industries such as pulp and paper, wood-based panels and bioenergy.

In Canada, softwood lumber is manufactured from a variety of coniferous tree species, most commonly spruce, pine and fir.

Softwood lumber uses include:

  • residential construction
  • non-residential construction
  • repair and remodelling
  • furniture manufacturing

In 2020:

  • Canada was:
    • the second largest producer of softwood lumber globally
    • a leading exporter of softwood lumber globally; countries around the world relied on Canada for access to quality products
  • Canada’s sawmilling industry:
    • consisted primarily of softwood lumber producers
    • directly employed about 28,000 Canadians; about 15% of Canada’s forest sector employment
  • Challenges faced by sawmills, including import duties imposed by the United States (U.S.) government on Canadian softwood lumber products, had rippling effects throughout the forest sector
  • Canada’s softwood lumber industry was:
    • valued at $10 billion
    • highly export-oriented with nearly 70% of production exported:
      • the majority of these exports were to the U.S., China and Japan
      • the U.S. imported over 50% of Canada’s softwood lumber production
      • about 80% of U.S. softwood lumber imports came from Canada

Softwood lumber dispute

Canada is the primary supplier of softwood lumber products imported by the U.S., valued at $8.4 billion in 2020.

The majority of homes in the U.S. are framed with softwood lumber. However, the U.S. is unable to produce all the lumber it needs domestically.

The U.S. lumber industry has frequently sought to restrict imports of Canadian softwood lumber, citing unfair competition. These restrictions have been done through the application of U.S. countervailing and antidumping duty laws.

The 2006 Canada-United States Softwood Lumber Agreement managed softwood lumber trade between the two countries for nine years. The Agreement expired in October 2015. Since May 2017, Canadian softwood lumber exports to the U.S. have been subject to countervailing and anti-dumping duties.

In the past, Canada has successfully challenged these actions under the dispute resolution provisions of the World Trade Organization (WTO), the North American Free Trade Agreement (NAFTA), and before U.S. courts.

Canada continues to challenge these U.S. actions, including under the dispute resolution provisions of the Canada-United States-Mexico Agreement (CUSMA).

To learn more about the softwood lumber dispute, visit Global Affairs Canada.

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