Canada was entitled to access to the US market. However, Softwood Lumber exports to the US originating from B.C., Alberta, Ontario, and Quebec that exceeded 14.7 board feet had to pay a lower base fee for the first $650 million and a upper base fee for anything more.(Department of Foreign Affairs). .
These trade restrictions directly impacted the change of lumber prices for new and .
existing construction in the United States. It is estimated that quotas penalized U.S. .
homebuyers by as much as $5 billion a year. For lumber retailers, the change in the .
lumber market was the most damaging factor resulting from the agreement. Another .
dispute arising from the SLA was BC stumpage fees. The dispute arose when the B.C. .
Forest Ministry reduced stumpage rates charged in the province on June 1, 1998. As a .
result, the United States invoked the dispute settlement provisions of the Softwood .
Lumber Agreement and when consultations failed to resolve the dispute, a Arbitration .
Panel was requested. Canada held a stakeholders meeting in January 1999 with .
representatives from industry and government in the 4 covered provinces to discuss .
Canada's defense. Between January and June 1999, Canada and the United States .
presented submissions and counter-submissions to the Arbitration Panel. These were .
followed by oral hearings. On August 26, 1999 Canada and the United States exchanged .
letters which settled the matter by amending the Agreement and terminating the dispute. .
At that point Canada thought it was settled only to be given a 27% tax on Softwood .
Lumber exports to the US. The one thing that the US didn't realize when provoking these .
disputes was the importance of Softwood Lumber from Canada to the USA. These taxes .
that wanted to be put into trade of Softwood Lumber was not only hurting Canada's .
economy but also USA's economy. .
By increasing the taxes of Canada's softwood lumber exports it is only making .
Canada hesitant in exporting them to the USA.
