The after-effects of the softwood lumber tariff are already starting to trickle down into Prince George.
Brink Forests Products laid off 55 people for at least two weeks as of Monday, August 20, saying the mill’s lumber supply is so scarce, it’s best they shut down temporarily to wait out the supply shortage.
“It’s definitely related to that. There’s a tremendous amount of uncertainty with regards to the duty,” says operations manager Patrick Oliver. “It has affected primary mills for some time now and it’s like trains in a line. As soon as the engine slows down, the rest of us do too.”
Mr. Oliver says layoffs could easily be extended beyond two weeks, depending on how the U.S. treats the company’s exemption application.
“If things change dramatically we may be able to bring people back earlier, but it could also be extended,” he says. “We’re hoping that doesn’t happen. We still have some inventory coming in.”
The company believes it should not have to pay a 19.3 per cent tariff on exports to the U.S. because it considers itself a manufacturer. It doesn’t hold a timber licence and has never received Forest Renewal B.C. grants or financial assistance from the province.
It’s application is due September 5, with results expected back no later than September 10.
The only other aspect that could bring back staff earlier than expected is if prices to Canadian manufacturers drop.
“They’ll certainly try to increase prices to offset the duty in the states but there’s no incentive to do that in Canada,” says Mr. Oliver. “There’s been no indication of a price increase so far.”
The company is one of many secondary producers in the area applying for an exemption next month.
“Nothing we do is subsidized,” says Gregg Taylor, general manager of Dollar Saver Lumber. “We have no government grants, no government loans. We have had timber licences before but we cannot sell logs.”
Jerry Deere, of the East Fraser Fibre Company, a local finger joint operation, says the company immediately raised their asking price for its finished product but has not yet had any takers.
The company uses waste fibre from primary mills and has therefore not seen any of its supply costs go up.
“We think we should be exempt because we purchase all of our raw material at market value, says Mr. Deere.