The goal of a quota deal would be to stabilize access to secure jobs for Canadian workers.

Canadian officials are open to considering limits on how much softwood lumber can be exported to the U.S. to try to resolve some of the trade friction between the countries, according to the leader of British Columbia.

“We think there is actually an opportunity for lumber to be one of the early agreements and wins that are struck,” Premier David Eby said in an interview with Bloomberg News.

“One of the asks for years out of the American coalition has been a quota — that there’s a fixed amount of lumber that gets to come from Canada,” he said. “And I think that, for the first time, there’s some willingness to have a conversation about what that could look like.”

Government ministers from Canada’s provinces have had discussions with Prime Minister Mark Carney’s administration to “bring forward proposals that historically have been off the table,” said Eby, whose province is the country’s largest lumber exporter and home to major producers such as Canfor Corp. and West Fraser Timber Co.

The goal of a quota deal would be to stabilize access to affordable building materials for Americans and secure jobs for Canadian workers, the premier said.

British Columbia and Quebec combined for 64 per cent of all Canadian lumber exports last year, according to Statistics Canada data.

It’s not clear how much appetite the U.S. has for an agreement with Canada on lumber right now. Carney’s government has met a number of U.S. President Donald Trump’s demands — including an immediate increase in defence spending and the elimination of Canada’s digital services tax. Trump nevertheless sent Carney a letter last week threatening to raise the U.S. tariff on some Canadian products to 35 per cent.

Trump has also directed the Commerce Department to study the potential national security harm of U.S. importing foreign wood, which could presage additional tariffs.

New duties on Canadian lumber come on the back of other pressures such as higher input costs, wildfires, and a mountain pine beetle outbreak that has affected tens of millions of acres of forests in western Canada.

On the other hand, U.S. homebuilders have warned that Trump’s tariff policies are inflationary, and could increase construction costs by almost US$11,000 a home. Canada represents almost one-quarter of the softwood lumber supply in the U.S., according to the National Association of Home Builders.

Source:  financialpost.com