Softwood Lumber1 - From Mike Moffatt,Your Guide to...

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From Mike Moffatt,Your Guide to Economics. What is the Softwood Lumber Dispute? The softwood lumber dispute is actually a number of disputes which have gone on for over 20 years between the United States and Canada. The heart of the softwood lumber dispute is the claim of the United States that Canada is unfairly subsidizing Canadian lumber production. The Canadians insist that they are doing no such thing. The Softwood Lumber Dispute - Private vs. Public Ownership In the United States, the majority of the softwood lumber harvested is from privately owned land. This is not the case in Canada, where most of the lumber harvested comes from Crown land. That is land owned by the federal or a provincial government. The way Canadian governments and American ones set the price they charge corporations to harvest this land is quite different and is the basis for the softwood lumber dispute. In the United States, logging rights are sold by using a competitive auction. In Canada stumpage fees are set by the government. These stumpage fees, which are based on a number of factors such as labor and transportation costs, tend to be significantly lower than the prices which come out of the U.S. auctions. The American government claims that these low prices constitute a subsidy to Canadian producers. The softwood lumber
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