Trump tariffs could lead to Quebec sawmills closing, forestry industry fears

Quebec's forestry sector is expressing concern that former U.S. president Donald Trump's re-election could lead to the closure of more plants in the province.

Throughout his campaign, Trump pledged a 10 percent tariff on all imports into the U.S., including Canadian softwood lumber. This has raised alarms among Canadian forestry companies, already struggling with the existing 14.54 percent tariff on lumber at the American border.

Étienne Vézina, senior director of forestry at Domtar, stated that the current tariffs are already causing some sawmills and plants in Quebec to close. “Tariffs are definitely a problem for us,” Vézina said. “If we see a U.S. tax rise to 30 percent, there will be difficult decisions to make.”

Domtar, which employs between 4,000 and 5,000 workers across 24 plants in Quebec, is already feeling the impact. Two of its plants, in Rivière-aux-Rats in Mauricie and Maniwaki in Outaouais, will close indefinitely just before Christmas, affecting more than 500 workers.

"It's always a difficult decision," Vézina said. "But at some point, when a plant isn't profitable, we can't keep it running long-term. It takes better foresight and favourable market conditions."

Quebec’s government is hoping for the best. Following Trump’s re-election, Premier François Legault announced the creation of a "Quebec-United States working group" to defend the province’s interests. Many ministers have joined the group to devise a strategy for protecting Quebec’s industries.

Maïté Blanchette Vézina, Quebec's natural resources minister, has sought to reassure the local industry, acknowledging that negotiations with the U.S. will be challenging. She noted that she had visited Washington a few months ago to discuss the softwood lumber dispute. "We are in regular discussions with members of the forestry sector to find solutions," she said. "We managed to work with Trump's team in 2016, and I am convinced that we will continue to find ways for Quebec to come out on top."

The Quebec Forestry Industry Council (QFIC) is asking the government for financial aid. Foresters estimate that $2 billion in company funds is currently stuck at customs due to U.S. tariffs, and they are calling for loans to help in the meantime. "The most important thing for the industry is predictability. Knowing where we are going. These are big investments," said Jean-François Samray, president of QFIC.

Samray also pointed out that taxes on wood products, including pulp and paper, exported to the U.S. could reduce the purchasing power of American consumers. "Cardboard boxes are everywhere in the United States on store shelves, be it at Walmart or in grocery stores," Samray noted.

Industry members also highlighted the ongoing housing shortage in the U.S. as a potential opportunity to lessen the impact of the tariff threats. An increase in tariffs on Canadian lumber would likely contribute to inflation and lower Americans' purchasing power.

“We really hope that our governments, both Quebec and federal, will be proactive, take forestry to heart, and defend our interests with the new [American] government that is being put in place,” Vézina, Domtar's senior director, said.