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Bracing for uncertainty under the new U.S. administration, British Columbia’s lumber producers are hoping diversification will be the key to survival.
One B.C. operation that adapted is the Duz Cho sawmill in Mackenzie, which sells all of its product in China and Saudi Arabia. Almost nothing in the company’s warehouse gets shipped to Canada’s traditional lumber buyers in the states.
It’s a modest workforce compared to Canfor’s far larger and recently renovated “super mill” nearby and another large sawmill in Mackenzie operated by Conifex.
But Mayor Pat Crook says by cutting smaller logs that many companies would consider scrap wood and focusing on China’s construction industry, Duz Cho has ensured it’s largely inoculated from the temperamental U.S. lumber lobby.
“It’s great to see,” says Crook.
Nationally, the U.S. home-building market is still the dominant customer for Canadian wood, attracting more than 65 per cent of Canadian lumber exports — but that’s down from a 90 per cent market share 10 years ago.
With the U.S. again threatening to impose punishing duties on Canadian home-building wood this spring, and with an unpredictable and potentially protectionist new president, people in forestry towns like Mackenzie are working out ways to Trump-proof the industry.
“Hopefully it won’t be as bad as people say,” said Orr of the looming U.S. tariffs.
He says regardless of any moves the new U.S. administration makes, that won’t happen this time.
“We feel pretty comfortable with our position,” he said. “We’ve had the opportunity to reinvent the sawmill in British Columbia.”
President-elect Donald Trump’s new trade representative, Robert Lighthizer, is seen as a hardliner intent on supporting American producers.
The countervailing and anti-dumping duties, which some in the lumber industry speculate could eventually go as high as 40 per cent, raise the price of Canadian lumber for U.S.consumers but also increase costs for Canadian producers.
The industry’s biggest players, including Canfor and West Fraser, have spent tens of millions of dollars to make their Canadian mills as modern and efficient as possible to help withstand the impact of the duties.