Softwood lumber duties dampen outlook for Canada’s wood products
22 June 2017Following its strongest showing in three years, production growth in Canada’s wood products industry is expected to moderate significantly in 2017 due to the incoming US trade restrictions on Canadian softwood lumber, according to The Conference Board of Canada’s Canadian Industrial Outlook: Canada’s Wood Products Manufacturing Industry.
Canada’s wood products manufacturers will see pre-tax profits shrink from CD$1.8bn in 2016 to CD$1.4bn this year and CD$1.1bn in 2018, as the US issues duties averaging 30% on Canada’s softwood lumber.
“The Canadian wood products industry’s financial performance is forecast to deteriorate in the years ahead as import duties cut into shipments to the US and act as a drag on industry growth,” said Michael Burt, director, Industrial Trends, The Conference Board of Canada.
“Revenues that would previously flow into the pockets of Canadian lumber producers will now be diverted to US Customs and Border Protection in the form of cash deposits.
“While Canadian producers will not bear the total cost of the new duties, revenues will be impacted and revenue growth is not projected to keep pace with cost increases in the near term,” added Mr Burt.
