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CBC
28-04-2025
- Business
- CBC
N.B. premier's internal trade moves don't touch industry protection
Social Sharing Premier Susan Holt's bold talk about "eliminating" and "tearing down" interprovincial trade barriers still has a long way to go before it catches up with economic reality. Holt's latest shuttle diplomacy on internal trade took her to Newfoundland and Labrador, where she signed another memorandum of understanding with another counterpart. The premier has championed what she calls an "Atlantic free trade zone" in this region and a push to strip away restrictions on internal trade nationwide as fast as she can. "Who can move forward with us? How far can we go? Let's go all the way," she said earlier this month after signing her first MOU in Toronto with Ontario Premier Doug Ford. Active verbs aside, Holt's actual approach has been cautious, focusing on areas such as government contracting and worker accreditation, rather than ending protectionist policies that shield major New Brunswick industries from competition. "It's one thing to declare your intent," said Ryan Manucha, a research fellow at the C.D. Howe Institute who studies internal trade. "This is where it's going to get pretty clear how far people are actually willing to go when they say 'free trade.'" The two changes Holt cites most often will allow more interprovincial alcohol sales and will let trained workers certified in other provinces start working here more quickly. Her rhetoric implies more sweeping changes. "We're going to continue to move as quickly as possible to take advantage of this opportunity to remove barriers for New Brunswick entrepreneurs and for all Canadians to have trade happen more quickly and much less expensively," she said April 16 in Toronto. WATCH | ' We want to make sure we're very careful': Holt's trade caveat: Susan Holt's internal trade push has big exceptions 2 hours ago Duration 3:21 MOUs are not binding agreements. They're more of a declaration of an intent to negotiate. The two MOUs recently signed by New Brunswick say provinces will "build on" existing legislation, "strive to" open up trade, "encourage" other provinces to join in and "identity options" for harmonizing provincial regulations. Ontario commits to go further than New Brunswick. Ontario pledges to eliminate all of its exemptions under the Canadian Free Trade Agreement — a 2017 national accord on open trade that gives provinces the leeway to choose to keep some protectionist policies. New Brunswick only commits to "work towards" removing its exemptions — and only as they apply to Ontario. Holt's government has already eliminated nine of New Brunswick's 16 exemptions, but so far she has not touched the big ones: the trade barriers that allow her to protect the province's major resource sectors from out-of-province competition. Provincial policies require forestry companies licensed to cut wood on Crown land to sell that wood — with few exceptions — to mills within the province, for example. Kim Allen, the executive director of the industry group Forest NB, says those policies have created an integrated forestry sector that ensures there is enough wood to keep those mills running. It also ensures the province gets the maximum value out of harvested wood by ensuring we're not exporting raw logs but finished lumber, she said. "The intention is to protect the highly integrated industry here in the province," Allen said. "It is the province's largest economic driver, so changing the flow of Crown wood could potentially lower — could impact the value of the raw product that's flowing out of the province. It would also put manufacturers at risk and threaten sustainable jobs." Holt's government is being similarly cautious about seafood processing. The province doesn't now require seafood harvested here to be processed here, but the existing exemption allows a future government to do so. The Liberals say they'll eliminate that possibility — but only for provinces that reciprocate. That is not going to happen in Newfoundland and Labrador, Premier Andrew Furey said last week as Holt stood by his side after they signed their MOU. "The premier knows very well — she's heard me say it today, twice — that there are no-fly zones," he said. Ending a minimum in-province seafood processing requirement "would be a death blow to rural Newfoundland and Labrador. We're not interested in that. We're not doing that." Furey added: "Equally, I'm sure she would not appreciate us taking all her lumber into Corner Brook Pulp and Paper." At a recent news conference, Holt's language on trade barriers for resource industries was considerably more cautious than it is on the general concept of liberalized trade. "We want to make sure we're very careful about New Brunswick's resources and how they are currently protected, and what benefit there might be to gain from getting access to partners and other places and what risks there are to potentially seeing our wood go elsewhere to be processed," she said. Furey was more blunt at his joint appearance with Holt in St. John's. "It's a very easy attitude to say, 'Let's get rid of every trade barrier,' but what's the next sentence?" he said. Manucha, who advocated for open trade within Canada, said it makes sense for provinces to protect their home-grown industries, but it could slow the momentum for lowering barriers, or lead to inconsistency from province to province. "Are we now stalling at a threshold question of what is or isn't going to be lumped in?" Manucha said. "And are we going to have a medley of arrangements? "Free trade is the classic story of NIMBYism. … As soon as we start to touch your industry, we start to get some concern." Holt said in St. John's that it was still worthwhile to open up as much as possible at a time when the U.S. tariff threat has given it a political impetus. It is not, however, true interprovincial free trade.
CBC
06-03-2025
- Business
- CBC
N.B. forestry towns on edge as U.S. tariffs, duties pile up
Social Sharing Like other New Brunswick forestry towns, the rural community of Kedgwick is on edge. The economy of the municipality tucked in the middle of the woods in the northwest of the province relies on two major sawmills, J.D. Irving Ltd. and Groupe Savoie, and several smaller forest operations. "The forest is the blood that runs in our veins," says Mayor Éric Gagnon. "Around here we know what to do with a tree. Trees are really important to us. Just about the entire population, if they don't work directly with wood, a part of their work comes from it." WATCH | 'We are very nervous': Mill towns brace for tariff impact: N.B. forestry towns face tariff triple threat 2 minutes ago Duration 2:34 So Gagnon has been paying attention to every twist and turn in the Trump tariff saga while staying in touch by phone with the operators of the local mills. "We're checking in with them every day or two, just to stay up to date … it's a very live issue," he said. "It's hard to predict the unpredictable with what's happening with our American friends. Mr. Trump has a bit of a hard time staying on track." About 24,000 New Brunswickers work in the forestry sector, and 80 per cent of the industry's output — softwood and hardwood lumber, pulp and paper, shingles, fibre and strand board — goes to the United States. Irving, the industry group Forest NB and the New Brunswick Lumber Producers released a fact sheet last month on the threat represented by the tariffs, estimating that seven out of 10 municipalities in the province are home to at least one forestry business. They were not giving media interviews this week. "At this time it is too early to determine the full level of impact these tariffs will cause," Forest NB spokesperson Andy Tree said in an email statement. "We continue working to understand the details of what the announced tariffs will mean for forest sector operations across the province." J.D. Irving issued a nearly identical statement. Some of the province's wood exports were already under American protectionist pressure before Donald Trump returned to the White House. In 2017 the U.S. added New Brunswick to the provinces whose softwood exports are subject to anti-dumping and countervailing duties. U.S. competitors lobbied for the move because, they argued, increased harvesting on Crown land amounted to a larger public subsidy, which made the province's lumber artificially cheap for American buyers. The combined duty rate is reviewed annually and this year is 14.4 per cent for all New Brunswick mills except Irving, which has an 11.5 per cent rate. This week Trump's Commerce Department filed a notice to increase one part of that combined rate, which if adopted would increase the combined rate to 26.8 per cent for most mills and 23.9 per cent for JDI. The administration has also launched an investigation into imposing additional duties on national security grounds. Add the 25 per cent tariffs and it amounts to a crushing increase to the cost of Canadian softwood sold in the U.S. "To put it simply, there's really not many Canadian softwood lumber mills that are going to be able to ship profitably into the U.S. market at the existing prices," said Dustin Jalbert, a wood products economist with the U.S. price forecasting firm Fastmarkets. The market share for Canadian wood in the U.S. has dropped from 34 per cent in 2000 to 23 per cent last year because of multiple factors, including the duties, Jalbert said. But there still isn't enough American supply to completely replace Canadian wood, even at higher prices, and the U.S. industry couldn't ramp up to meet that demand for three to five years, he added. "That's when I come back to the fact that market prices have to go higher to at least keep some of that Canadian supply staying into the market. So you know this is going to come to a cost of the consumer and home builders." Irving and another major forestry company in the province are facing another challenge thanks to the Trump tariffs. Twin Rivers Paper Company ships pulp from its Edmundston mill in a pipe across the U.S. border to its Madawaska, Maine paper mill. The company would not comment this week on how the tariffs might affect the economics of that operation. Irving wouldn't comment either on what the tariffs mean for the pulp it sends to the $470 million US tissue plant it opened in Macon, Ga., in 2019. The Macon plant has already seen two expansions, the latest of which will bring employment to more than 500 people, according to a news release from the Macon area economic development authority. Irving has a number of current job listings for the plant and would not say whether it could shift production from its New Brunswick tissue plants to Georgia to avoid the Trump tariffs. The Holt government announced a $40 million "competitiveness and growth program" this week to help large New Brunswick companies that depend on exports, along with another $30 million to help companies diversify their markets and mitigate tariff impacts. Gagnon said he's not sure that's enough to blunt the impact on his municipality, given how deep the industry is embedded there. "Every part of the forestry industry, we do it here in Kedgwick, so every time there's a crisis, we're affected," he said.
