Tariffs 101

During my time as M.P., I believe I became one of the most knowledgeable MPs about tariffs. I received my “Tariff Education” from Diana Blenkhorn, President and CEO of the Maritime Lumber Bureau (MLB), near Amherst.
First, a word on “normal” tariffs.
If a group of U.S. businesses representing more than half of a U.S. industry files a complaint that another country is subsidizing products being shipped into U.S., the United States government is requiredto impose a preliminary tariff immediately.
Then the case goes to an international tribunal, which eventually will decide if the accusation is correct. In the meantime, the offending products can only be imported into the U.S. by paying the “preliminary Tariffs.” This applies to shoes, apples, softwood lumber, or any other product. The tribunal decisions can take years to conclude.
In the case of softwood lumber, the United States lumber industry has always claimed that Canada subsidizes Canadian lumber mills by providing “free or discounted trees” from provincial government-owned properties. Because of this, for decades they have been successful in having tariffs imposed on Canadian softwood lumber going into the United States from Canada.
Enter Diana Blenkhorn, President and CEO of the Maritime Lumber Bureau.
Diana and her MLB team knew that Atlantic Canada lumber mills did not have access to “free trees,” and she was adamant that the tariff should not apply to Atlantic mills. At first, Diana had to work with all of the provinces to ensure that no Atlantic Mills received free or subsidized lumber from the provincial governments. Then she made applications directly in Washington to have an exemption applied to exclude the four Atlantic provinces from the U.S. softwood lumber tariffs. After a series of exhaustive sessions, she was successful in getting Atlantic Canada mills exempted from the onerous tariffs. All other provinces were required to pay the softwood tariffs.
When lumber from other provinces started being diverted into Atlantic Canada and then forwarded to the U.S. as if it was from Atlantic Lumber Mills, the U.S. authorities threatened to cancel the Atlantic Exemption. In response, Diana Blenkhorn went to Washington and met senior U.S. trade officials.
When U.S. officials were about to cancel the “exemption,” Diana created a “Certificate of Origin” plan on a napkin. This was an intricate tracking system to identify and mark every stick of lumber to confirm which Atlantic Mill, and even which woodlot the lumber came from. Every piece of Atlantic lumber that goes to the U.S.A. has an MLB code sticker on it. Again, Diana Blenkhorn satisfied the U.S. authorities that lumber with the MLB certificate was not subsidized. The exemption was extended because of the MLB Certificate of Origin program.
These softwood negotiations never stopped. One day I was holding a meeting in my office in Ottawa with several government officials and several elected MPs including the Parliamentary Secretary to the Minister, the HonBrian Jean. The only subject was the Atlantic Exemption. MPs from the other provinces were demanding that the Atlantic Exemption be eliminated because it put a spotlight on their provincial forestry practices. Some provinces, especially British Columbia, offered “free trees” to lumber mills if they would establish a lumber mill in an area of high unemployment. Hence the U.S. accusation of “subsidized lumber”.
As a coincidence, Diana Blenkhorn knocked on my door completely unexpectedly. I invited her to join the meeting. Everyone in the room was male except Dianna. Right away, she was correcting the statements being made by officials and elected MPs. At one point, Parliamentary Secretary Brian Jean asked her if she was an international trade lawyer. She replied, “No, I’m not.” Then he said, “Are you even a lawyer?” She said, “No, I’m not.”
I thought to myself, “This is going to be good.” I knew about her vast knowledge of every person involved in the United States trade system and every rule, law and regulation the U.S. had ever created regarding tariffs.
Diana proceeded to recite chapter and verse the U.S. regulations and trade laws that the others were not aware of. There wasn’t a subject that came up that she was not more knowledgeable about than anyone else. It was very fortunate that she landed in my office when she did. Thanks to her intervention, the opposition in Ottawa to the “Atlantic Exemption” fizzled out.
There were several of these “softwood negotiations” with the United States during my 30 years in politics. In the last negotiations that I was a part of, there were three signatories to that “Bilateral Agreement.” Normally, bilateral agreements only have two signatures. In this case there were three signatures: the Government of the United States, the Government of Canada, and the Maritime Lumber Bureau.
It was a proud moment for Diana and a well-deserved recognition for the incredible efforts she devoted over many years defending the Atlantic lumber industry. Diana passed away in September 2023 after a debilitating illness. I know of no other person who could overcome the incredible international hurdles that she faced so successfully. We could really use her expertise right now.
First, a word on “normal” tariffs.
If a group of U.S. businesses representing more than half of a U.S. industry files a complaint that another country is subsidizing products being shipped into U.S., the United States government is requiredto impose a preliminary tariff immediately.
Then the case goes to an international tribunal, which eventually will decide if the accusation is correct. In the meantime, the offending products can only be imported into the U.S. by paying the “preliminary Tariffs.” This applies to shoes, apples, softwood lumber, or any other product. The tribunal decisions can take years to conclude.
In the case of softwood lumber, the United States lumber industry has always claimed that Canada subsidizes Canadian lumber mills by providing “free or discounted trees” from provincial government-owned properties. Because of this, for decades they have been successful in having tariffs imposed on Canadian softwood lumber going into the United States from Canada.
Enter Diana Blenkhorn, President and CEO of the Maritime Lumber Bureau.
Diana and her MLB team knew that Atlantic Canada lumber mills did not have access to “free trees,” and she was adamant that the tariff should not apply to Atlantic mills. At first, Diana had to work with all of the provinces to ensure that no Atlantic Mills received free or subsidized lumber from the provincial governments. Then she made applications directly in Washington to have an exemption applied to exclude the four Atlantic provinces from the U.S. softwood lumber tariffs. After a series of exhaustive sessions, she was successful in getting Atlantic Canada mills exempted from the onerous tariffs. All other provinces were required to pay the softwood tariffs.
When lumber from other provinces started being diverted into Atlantic Canada and then forwarded to the U.S. as if it was from Atlantic Lumber Mills, the U.S. authorities threatened to cancel the Atlantic Exemption. In response, Diana Blenkhorn went to Washington and met senior U.S. trade officials.
When U.S. officials were about to cancel the “exemption,” Diana created a “Certificate of Origin” plan on a napkin. This was an intricate tracking system to identify and mark every stick of lumber to confirm which Atlantic Mill, and even which woodlot the lumber came from. Every piece of Atlantic lumber that goes to the U.S.A. has an MLB code sticker on it. Again, Diana Blenkhorn satisfied the U.S. authorities that lumber with the MLB certificate was not subsidized. The exemption was extended because of the MLB Certificate of Origin program.
These softwood negotiations never stopped. One day I was holding a meeting in my office in Ottawa with several government officials and several elected MPs including the Parliamentary Secretary to the Minister, the HonBrian Jean. The only subject was the Atlantic Exemption. MPs from the other provinces were demanding that the Atlantic Exemption be eliminated because it put a spotlight on their provincial forestry practices. Some provinces, especially British Columbia, offered “free trees” to lumber mills if they would establish a lumber mill in an area of high unemployment. Hence the U.S. accusation of “subsidized lumber”.
As a coincidence, Diana Blenkhorn knocked on my door completely unexpectedly. I invited her to join the meeting. Everyone in the room was male except Dianna. Right away, she was correcting the statements being made by officials and elected MPs. At one point, Parliamentary Secretary Brian Jean asked her if she was an international trade lawyer. She replied, “No, I’m not.” Then he said, “Are you even a lawyer?” She said, “No, I’m not.”
I thought to myself, “This is going to be good.” I knew about her vast knowledge of every person involved in the United States trade system and every rule, law and regulation the U.S. had ever created regarding tariffs.
Diana proceeded to recite chapter and verse the U.S. regulations and trade laws that the others were not aware of. There wasn’t a subject that came up that she was not more knowledgeable about than anyone else. It was very fortunate that she landed in my office when she did. Thanks to her intervention, the opposition in Ottawa to the “Atlantic Exemption” fizzled out.
There were several of these “softwood negotiations” with the United States during my 30 years in politics. In the last negotiations that I was a part of, there were three signatories to that “Bilateral Agreement.” Normally, bilateral agreements only have two signatures. In this case there were three signatures: the Government of the United States, the Government of Canada, and the Maritime Lumber Bureau.
It was a proud moment for Diana and a well-deserved recognition for the incredible efforts she devoted over many years defending the Atlantic lumber industry. Diana passed away in September 2023 after a debilitating illness. I know of no other person who could overcome the incredible international hurdles that she faced so successfully. We could really use her expertise right now.