Canadian Plywood Industry Facing Decline Due to Chinese Competitors

The Canadian plywood industry has feared imminent decline for years. The federal government has been warned of this threat for some time, yet the problem ensues. Carlos Zarate, president of the Canadian Hardwood Plywood and Veneer Association drew attention to this issue and brought it to the federal government years prior. He explained that the decline was not a result of their failure to meet the demand for decorative wood panels, furniture, and kitchen cabinets, but Chinese competitors dominating the market and reaping unfair advantages.

Industry Urged the Government to Implement Tariffs

In early May, Zarate asked the government to impose tariffs on Chinese plywood exports. “In terms of pricing, Canadian producers are continually undercut by Chinese imports with dumps and subsidies. Lost sales and price reductions have caused substantial losses to Canadian producers, and over time, some customers asking Canadian producers to stop competing with Chinese import pricing,” he said.“Producers must increasingly look to other export markets to sell their products. The primary export market is the United States, which is now protected from dumped and subsidized Chinese imports.

Cheap Plywood Market Harming Canadian Jobs

Yet, since then, tariffs have yet to be imposed which has negatively impacted the Canadian plywood industry. According to sector officials, Chinese rivals can enjoy unfair benefits including significant government subsidies and access to illegally harvested timber, flooding global markets and cheap products. Zarate explained how Canadian plywood market shares have suffered a downturn due to the sector’s inability to compete with cheap Chinese plywood products.

Canadian industry companies attempted to convince the Canada Border Services Agency (CBSA) of their reasonings and how the Chinese market has an unfair advantage to little avail. The agency concluded that the issue was not a “particular market situation” involving Chinese firms. Yet, the United States imposed anti-dumping regulations on Chinese-produced products just a few years ago. “The fact that the Americans were successful in establishing countervailing duties on the same product and we were not, we’re a little flabbergasted to be quite honest,” said Jeff Bromley, chair of the United Steelworkers Wood Council.

It’s obvious that Canadian labour shortages and wages are significantly higher compared to China and cheaply made plywood and wood products being imported into the country can be harmful. Bromley explains how the Canadian industry simply can’t compete with Chinese rivals and thus, Canadian jobs are affected.

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