Years have passed since Carlos Zarate and others in the Canadian decorative plywood industry began talking to the federal government about a growing problem in their industry.
President of the Canadian Hardwood Plywood and Veneer Association warns of declining industry, but not due to falling demand for things like kitchen cabinets, wood panels ornaments, furniture and other non-structural wood products.
Mr. Zarate, who is also the president of Industrie Ergie in Victoriaville, in the Centre-du-Quebec region, said members of the association have seen their market share in Canada shrink because they are unable to compete. plywood products imported from China at prices that Canadian producers could never hope to match, let alone beat.
The industry wants duties imposed on Chinese exporters, who they say enjoy unfair advantages, such as large government subsidies and access to illegally harvested timber, flooding world markets with cheap products that harm considerably to their competitors.
They were stunned by their inability to convince Canadian authorities to crack down on Chinese products, which have been subject to high countervailing duties in the United States since 2017.
Canadian industry stakeholders complained to the Canada Border Services Agency (CBSA) about the situation in April 2020, requesting a dumping and subsidy investigation for their competitors in China.
“The lost sales and price reductions have caused significant injury to Canadian producers. Over time, some customers just stopped asking Canadian producers to price compete with Chinese imports,” they told the CBSA in a presentation.
“Producers increasingly have to look to other export markets to sell their products. The main export market is the United States, which is now protected from subsidized Chinese imports. »
The agency’s investigation did not go as Mr. Zarate had hoped, and the association appealed to Federal Court against the CBSA chairman’s decision to drop the investigation.
The Federal Court of Appeal upheld the decision in April, dealing another blow to the industry in Canada.
According to Zarate, the industry is shrinking, a process that has accelerated over the past 15 years as Chinese exporters have increased their presence in Canada. They now account for more than half of the country’s decorative plywood market share.
He estimates that Canadian companies find themselves competing in a “disrupted” market, where products made in China cost half or even a third of the price of products made in Canada.
“We’ve seen many Canadian plywood and veneer mills disappear over the years because they couldn’t compete with Chinese imports,” he said.
Gordon LaFortune, an Ottawa-based commercial lawyer, has represented several Chinese companies that have been screened by the Canada Border Services Agency.
He said his customers were able to demonstrate that their costs were not distorted, as claimed by Canadian industry stakeholders, meaning that there was no “particular market situation that warranted the imposition of duties on their products.
In 2017, the U.S. International Trade Commission found that Chinese imports were hurting U.S. producers and imposed countervailing duties of more than 180% based on industry complaints similar to those of Canadian companies .