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Opinion: Softwood conflicts are bad for consumers and producers

Softwood lumber is pictured at Tolko Industries in Heffley Creek, B.C., Sunday, April, 1, 2018.
Softwood is as follows: It is drawn in the place. Tolko Industries, Heffley Creek, British Columbia, Sunday, April 1, 2018.Photo: Jonathan Hayward/Canadian Press

The dispute between Canadian softwood and the United States It has been going on for about 40 years now, but it has been delayed for a long time. Despite the previous setbacks of the WTO and NAFTA courts, subsidized production accusations from American decision makers and producers continue.

This imposes obligations on Canadian softwood, damaging forestry in areas such as Sagneilac Sanjan in Quebec and Vancouver Island in British Columbia. rice field. .. Given that the number of jobs associated with the forestry sectorexceeded 302,500 in 2019, these measures will have a significant impact on the local economy. In a broader sense, these tariffs are counterproductive because they hurt the economies of both countries. On the Canadian side, it is the producers who suffer, but in the United States, it is the consumers who pay the price.

In Canada, or more precisely in areas where the forestry sector is an important part of the economy, these measures affect the exports of softwood producers. According to one study, with an import tariff of 20.83%, thenet loss of softwood is 71,000 m3, which is just below, which is 18 times that of wood. Corresponds to. Included in the framework of Notre Dame Cathedral in Paris.

Our forecast is that from 2017 to 2027, these tariffs will reduce Canadian producers' exports to over US $ 3 billion. And this loss is not even completely offset by increased activity of producers south of the border, in addition to hurting entrepreneurs in all Canadian producing states.

Not surprisingly, American producers have benefited from these obligations by increasing local production of resources. In addition, the obligations imposed cost approximately$ 56 billion to export resourcesto Canadian producers between 2017 and 2021. It should also be noted that southern neighbors rely on Canada's softwood, and 84% of this resource's exports will be directed to the United States in 2021.

In addition, this protectionist measure implemented by President Trump reduced, but is maintained by President Biden, but is an American consumer. Has a direct negative impact on. ..

Despite rising domestic production of American softwood, the big loser of this tariff is undoubtedly the American consumer who has to pay soaring prices for this resource. Indeed, American consumers are 26 times more hurt than Canadian producers who are successful enough to find softwood takers. Consumers south of the border lost $ 1.5 billion ($ 981 billion) in happiness in 2017 due to tariffs imposed by political leaders.

In other words, Americans who pay more for softwood products are, in a sense, subsidizing American producers who put their profits in their pockets. The increase in US softwood production does not completely offset the decline in Canada's production, but there is a net loss of production, which reduces the amount of resources and pushes prices up.

US politicians need to deal with this situation and eliminate their obligations to this resource, which is a heavy burden on their people. When inflation reaches8.6% in May, the peak of 40 years, households urgently need to obtain the highest quality materials at low prices. Living costs are rising, and the elimination of these tariffs will reduce pressure on construction costs and give American families the coveted rest.

Olivier Rancourt is an economist at the Montreal Institute for Economic Research (MEI) and Gabriel Giguère is a public policy analyst at MEI.

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