VANCOUVER, British Columbia – Canadian softwood lumber exports to the United States nose-dived in the weeks following the imposition of punitive American duties, trade figures show.

The volume of softwood exports to the key U.S. market fell by more than 25 percent between May 22 – the day the 27 percent tariffs took effect – and June 28.

Exports from British Columbia, which accounts for about half the cross-border trade, dropped to 83.3 percent of volumes during the same period last year. And Quebec, which makes up a quarter of Canadian softwood exports, saw shipments cut to just 51 percent of 2001 volumes.

Ontario, the third-largest Canadian supplier to the U.S. market, suffered, too, with shipments dropping to 55.1 percent of 2001 exports.

The data comes from a monitoring program set up last year by Canada’s Department of Foreign Affairs and International Trade after U.S. lumber producers filed countervailing and anti-dumping complaints against their northern competitors, alleging Canadian exports are subsidized.

The steep decline is partly explained by softwood producers taking advantage of a five-week duty-free period in April and May to push as much lumber across the border as possible. Provisional tariffs imposed last year had lapsed before U.S. trade authorities confirmed the new countervailing and anti-dumping duties.

Canada’s $10 billion annual softwood trade to the United States has been in turmoil for months due to a weakened U.S. economy and uncertainty over the impact of the duties.

The U.S. housing market is absorbing the last of the duty-free surplus lumber but prices have risen only slightly, says Laurence Cater, publisher of Madison’s Canadian Lumber Reporter.

Higher-cost Quebec producers such as Abitibi Consolidated and Domtar have been forced to close mills, triggering widespread layoffs. Domtar owns a paper mill in Baileyville, Maine.

The coastal British Columbia sector, dependent on high-priced cedar, hemlock and fir, remains largely shut down after a brief flurry in April and May.

Cater said that when prices decline during the traditional autumn slowdown in U.S. construction, the impact of the duties will really start to bite.

“As we get closer to fall it’s going to get tougher and tougher for even the most efficient B.C. mills,” he says.

The province’s main forestry union, the Industrial, Wood and Allied Workers of Canada, estimates about 4,600 of its British Columbia members are off the job. That’s half the number last December but a fraction of the 20,000 lost British Columbia jobs some observers predict if the trade dispute isn’t resolved soon.

There’s been no discernible movement since talks between Canada and the United States broke off last spring.

Canadian trade officials are waiting for World Trade Organization rulings, expected in a couple of weeks, on their complaints about the U.S. countervailing duty process and an American law that funnels the collected duties to the U.S. companies that claimed injury.

Canada traditionally supplies about one-third of U.S. softwood lumber demand for construction. Housing starts are driven strongly by consumer confidence, notes Alistair MacCallum, a forestry analyst at PwC Consulting.

Cater says some U.S. housing markets, such as the East Coast, remain hot because investors, turned off by stock market scandals, are putting cash into tangible assets such as real estate.

The industry wants federal help defraying the cost of the tariffs, perhaps through interest-free loans or loan guarantees. The provinces and unions are demanding money to support displaced workers. Quebec alone said it requires more than $400 million a year.

The federal Cabinet is expected to discuss the options sometime this summer.

Canadian trade officials worry federal supports – especially to cover the duty costs – could be seen by the United States as more evidence of subsidy.