The organization which speaks and bargains on behalf of the BC lumber industry has confirmed that a 34.45% hit to Canadian lumber products is most likely on the way this summer.

“The BC Lumber Trade Council (BCLTC) is deeply disappointed by the U.S. Department of Commerce’s preliminary decision to more than double countervailing duties on imports of Canadian softwood lumber from 6.74% to 14.38%,” stated the organization in a release on Sunday afternoon.

“Combined with Commerce’s preliminary decision earlier this year to increase anti-dumping duties to 20.07%, this could bring the total combined duty rate to 34.45% this fall if [the US Department of] Commerce maintains these rates in its final results.”

This would add confirmation to what the Premier’s office unexpectedly put out late Saturday afternoon, without providing a lot of detail as to how the BC government was able to come up with that 34.45% figure.

It was only later that government sources confirmed to Radio NL that it’s based on the US Commerce Department’s initial assessment of the countervailing investigation, which it launches each year at the request of a coalition of US lumber companies which claim that BC’s wood products are unfairly propped up by the government.

“British Columbia does not subsidize its lumber industry,” stated the BC Lumber Trade Council in its Sunday rebuke of the forthcoming countervailing penalties.  “Timber in B.C. is sold through a transparent, market-based system. Claims that B.C.’s system provides an unfair advantage are simply not supported by the facts.”

“Commerce continues to employ flawed and misleading methodologies, resulting in the higher rates that were announced,” added the Lumber Trade Council.

While the final number — the combining of the anti-dumping rate and the countervailing duty — is seemingly set at 34.45%, it’s not exactly clear how much of a hit Canfor and West Fraser Timber took individually.

They were the only two companies involved in this year’s investigation.

That itself goes against the US Commerce Department’s previous practice, which was to single both companies out for review as the largest producers and exporters in BC and Canada — but add at least one, if not two other Canadian companies to the probe to try to portray balance and fairness in the process, while also tempering any massive swing in the penalties.

“These duties are unjustified and harmful,” said Kurt Niquidet, President of the BC Lumber Trade Council. “Our stumpage system is grounded in market principles, with timber sold through open, competitive auctions.”

It’s expected the US Commerce Department will provide details of its countervailing investigation sometime early this week, most likely sometime Monday.

But government sources have told Radio NL that Canfor will ultimately take the biggest hit in the combined duties, somewhere in the range of around 47%.

Its initial assessment from the anti-dumping duties came in at 34.61%, which would put its countervailing hit in the range of around 12-13%.

West Fraser’s overall number is expected to fall somewhere in the range of about 16.5-17% for the countervailing portion, which combined with its initial anti-dumping penalty, would put West Fraser Timber’s hit at around the 25.5-26% range.

So far, neither West Fraser or Canfor have offered up any public statements and may well continue to keep their powder dry as to not rattle their respective shareholders.

“The Council urges Commerce to reverse this preliminary decision in its final results,” continued the BC Lumber Trade Council.  “If implemented, these rates will hurt workers and communities on both sides of the border and drive-up lumber prices for American consumers.”

Canfor currently has to leave 16.58% of the cost of any shipment at the Canada-US border in the form of a cash or bond payment.  While Canfor may take some of the burden off its US customers, for the most part, company is just off-setting those costs by putting mostly on to their US brokers, who will in-turn, recoup their hit by charging more to the wholesaler, the wholesaler to the retailer, the retailer then over to the builder and the builder then on to the home buyer — where higher prices almost always end up.

It was that 16.58% that the company cited — in part — for its decision last fall to shutter a pair of its operations in Fort St. John and Vanderhoof, leaving over 500 people out of work and representing a difficult blow to the communities themselves.

If the 47% figure for Canfor is accurate, that would be more than triple its current export duties to the US, most likely prompting some difficult decisions ahead for the Vancouver-based firm, which employs close to 7,000 people in this province — many of them based in the Lower Mainland.

“BCLTC remains committed to fair, fact-based trade and will continue working with partners to defend Canada’s forestry sector,” the council added.