Northern Ontario sawmills fear recovery will be cut short by US trade war

Lumber companies in northeastern Ontario are fearing a new trade war with the U.S. just as their industry is rebounding.

After the dark days in the middle of the last decade when many mills were shuttered across the region, the strengthening American housing market has seen the bottom lines improve and new jobs created.

But with the 10-year-old softwood lumber deal negotiated by the Conservative governmentexpiring this fall, companies fear the U.S. will once again impose duties and tariffs on Canadian wood.

"We expect this market is going to continue its slow, steady recovery,"saidJim Lopez, president ofTembec, which runs sawmills in Hearst,Kapuskasing,CochraneandChapleau.

"That's why I think it's so important to get a trade deal in place now, so we don't have disruptions in this recovery."

Softwood lumber is expected to be on the table this week, as Canadian government officials travel to Washington.

'Certainly a risk'

Lopez is hoping a deal can be reached by summer, before the US elections this fall.

"There's certainly a risk that a new administration, different congress could bring a different perspective to things," he said.

Lopez says the softwood lumber dispute has been going since 1982, flaring up into a full-fledged trade war on four different occasions, withprotectionist policies being brought in by both Democrat and Republicangovernments.

The other big timber producer in northeastern Ontario is Eacom, which employs hundreds of people at mills in Nairn Centre, Gogama, Timmins and Elk Lake.

Spokeswoman Christine Leduc says the business has been stronger in recent years, but is still fragile.

It's "not as great as we anticipated or has been forecasted, but the softwood lumber industry is certainly experiencing a recovery in Canada," she said.

Leduc said Eacom is encouraged that the Canadian government plans to raise the subject in Washington this week and is hopeful a deal can be reached in the coming months.