Forests critic worried as 'very precarious' industry runs into tariff uncertainty

Photo: The Canadian Press

B.C.’s forests critic says he’s hopeful the effects of a punishing 25 per cent tariff on all Canadian goods entering the U.S. won’t force the closure of any mills in the Kamloops area.

“It’s very precarious right now,” Kamloops-North Thompson MLA Ward Stamer told Castanet on Monday. “We’ve already had some mill closures up north and we’re not that far away from having more mill closures closer to home.”

On Saturday, U.S. President Donald Trump said 25 per cent tariffs would be imposed against all goods imported from Canada effective Tuesday. Prime Minister Justin Trudeau responded with matching 25 per cent tariffs against $155 billion worth of American goods, including alcohol, furniture and natural resources.

The news saw stocks in B.C.’s three major publicly traded forestry companies take a big hit on Monday morning. West Fraser Timber, Canfor Group and Interfor Corp. saw drops of four, five and six per cent, respectively, before correcting somewhat later in the morning.

Mining giant Teck, which operates the Highland Valley Copper mine near Logan Lake, was down 2.7 per cent in early morning trading.

Uncertainty poses challenges

B.C.’s biggest forestry companies are highly exposed to American tariffs, because the U.S. makes up a major share of their markets and they already pay hefty duties of about 14.5 per cent on all exports south of the border.

They are hedged somewhat by the fact they have been acquiring American assets — sawmills and other wood manufacturing plants — in the U.S. for more than a decade that will be able to produce wood products that are not subject to tariffs or duties.

Stamer said the uncertainty is the problem — in the markets and in costing.

“First they don’t know what the price is going to be, and second they don’t know what the effect will be,” he said.

“Those are the two things that everybody is worried about right now — we really don’t know what the market is going to do.”

'A lot of nervousness'

Kamloops Centre MLA Peter Milobar, who is finance critic in the B.C. Conservatives’ shadow cabinet, said he’s been hearing similar feelings of unease.

“A lot of nervousness would be the best way to sum it up,” he said.

“No one is 100 per cent sure how this is going to impact them, either for their current customers or for a U.S. customer base.”

It’s not just big players in mining and forestry. Last week, Riversong Guitars owner Mike Miltimore told Castanet the U.S. makes up about a third of his sales, prompting him to search for new markets overseas. On Monday, the BC Cattlemen's Association said ranchers are doing the same thing.

Milobar said he’s hearing from a broader range of businesses than just those in the resource sector.

“It’s all kind of unknown,” he said. “No one knows where this is going to land."

— with files from The Canadian Press