'I was pretty sure it was coming': Hainesville sawmill prepares to close over tariff

'I was pretty sure it was coming': Hainesville sawmill prepares to close over tariff

Back in January, Danny Stillwell started to get the feeling the United States would slap big duties on his eastern white cedar shipments to Maine.

This week, the U.S. announced its new tariffs on softwood lumber, and rather than pay thousands of dollars per load shipped across the border, Stillwell prepared to close his sawmill, Hainesville Sawmill Ltd., northwest of Fredericton.

Starting next week, six employees at the sawmill in Middle Hainesville will be out of a job for at least six months. 

"I was pretty sure it was coming, probably 99 per cent sure it was coming," Stillwell said in an interview. 

- Softwood border duties could hurt 25 N.B. sawmills, government says 

- Uncertain future: New tariff will hurt N.B. sawmills' bottom line 

Tariffs of almost 20 per cent were announced for all New Brunswick lumber producers with the exception of J.D. Irving Ltd.  

For decades, the U.S. lumber industry has argued that because most Canadian timber is harvested on Crown land, the way provincial governments manage and set prices means cheaper lumber. 

Stillwell, who has been in the industry 10 years, said 100 per cent of the rough cedar lumber that he's purchased is private wood, which is why he feels he shouldn't be targeted for duties. 

He called the wood a niche product and said the Maine business that buys from him is going to be affected by the sawmill's closure.

"They really need the product that I deliver in Maine," Stillwell said. "They're going to be hurting in the months ahead because this is their busy fencing season, their busy log home season.

The province's largest forestry company, J.D. Irving Ltd., managed to secure a lower tariff rate of three per cent after submitting thousands of pages of documents to the U.S. Commerce Department to support its case.

"With Commerce being such a large organization, they really don't care about a small operator like myself," Stillwell said.

"I could live with three per cent, same as Irving, but I can't deal with 20 per cent."

A wait and see approach

At the beginning of March, the New Brunswick sawmill stopped purchasing logs. Stillwell said he's been busy trying to clear his inventory.

"I'm shutting down on my terms," he said. "I could keep going and bleed the company dry, [but] that's not my intention."

The 65-year-old is hopeful, however, that negotiations between Canadians and the U.S. will eliminate or substantially lower the tariff and that his company will be up and running again in six months.

"Everybody would like to see a zero rate for the Maritimes or at least down to the three per cent that Irvings are at," he said.

'Claims unfounded'

Fredericton MP Matt DeCourcey, the parliamentary secretary to the minister of foreign affairs, said there is no way the U.S. can make an argument that New Brunswick is subsidizing its forestry industry.

"It is our view that the claims they made this week are baseless and unfounded," he said.

DeCourcey said government is working for an exclusion from the tariffs and has been speaking with sawmills across the province, looking for financial options to aid communities that are going to feel the impact.   

"It's the view of the federal government, shared by the provincial government, that that exclusion should still be in place, that the industry is not unfairly subsidized in our province, and that the system in our province is not fundamentally different from that of our neighbouring provinces.

"Nor fundamentally different from other provinces across the country."