The National Lumber & Building Material Dealers Association (NLBMDA) and the National Association of Home Builders (NAHB) made headway in their discussions with a trade delegation from the Québec government regarding the ongoing softwood lumber trade negotiations between the United States and Canada. In a joint statement, the NLBMDA and NAHB highlighted the critical role of softwood lumber in the construction industry and expressed their commitment to finding a fair agreement that promotes residential construction and economic growth on both sides of the border.
The talks, held on Monday, June 5, were attended by NLBMDA President & CEO Jonathan Paine, Director of Government Affairs Jacob Carter, and the Québec trade delegation led by Ambassador Raymond Chrétien, who is currently Québec's chief negotiator on softwood lumber. Ambassador Chrétien, a former Canadian ambassador to the U.S., emphasized Québec's commitment to sustainable practices and the importance of strong relations between all parties involved.
The softwood lumber dispute between the U.S. and Canada has had significant economic implications for both countries, impacting the lumber industry, housing market, and trade relations. Since the expiration of the 2006 U.S.-Canada Softwood Lumber Agreement, the U.S. has imposed countervailing duties and anti-dumping duties on Canadian softwood lumber imports. As a result, Canada's market share for softwood lumber in the U.S. has declined from 33% in 2016 to 26% in 2022. The U.S. timber industry has advocated for a revised system that includes quotas to limit Canada's market share to 20%.
“Housing affordability is at its worst level in more than a decade and the increase in lumber costs in 2020 and 2021 easily added $50,000 or more to the cost of building a new single-family home,” said NAHB’s Chief Economist Robert Dietz. “With builder sentiment strengthening, NAHB is forecasting gains for the pace of single-family construction during the second half of 2023 and the start of 2024. Reliable access to softwood lumber is critical to meet the anticipated demand for residential construction, which will improve housing affordability while also creating jobs and bringing down inflation.”
The economic impact of the residential construction is significant. The construction of 1,000 single-family homes sustains approximately 2,900 jobs and generates almost $328 million in economic activity for the overall economy. Furthermore, with more than 40% of consumer inflation attributable to shelter (housing) inflation, additional housing supply is needed to reduce inflationary pressure.
NLBMDA is actively lobbying trade officials in the Biden Administration and the Commerce Department to pursue a long-term agreement with Canada that eliminates tariffs and brings stability to the supply and pricing of softwood lumber. The current tariffs on Canadian softwood lumber have had negative consequences for American consumers, weakening the U.S. housing market and hindering access to affordable homeownership, said NLBMDA in a statement. The NLBMDA is pushing for a resolution that supports the lumber supply chain and ensures a consistent and affordable supply of softwood lumber for American builders.
