Tembec Open to Quotas: CEO

Eastern Canadian lumber producer Tembec’s chief executive James Lopez said in an interview with Canadian Press Thursday before Tembec’s annual meeting it is open to quotas on exports to the United States, in a break from the positions of some Canadian rivals and the Quebec government.

Lopez said he agrees that Canadian lumber should be exempt from restrictions because provincial systems are now market-based, and he’s advocating for a compromise to secure a new agreement. Lopez is willing to accept limits on access in the belief that increasing home construction will ultimately result in higher lumber shipments and the supply of BC lumber is falling.

He said Canada’s proposal for a quota in the range of 31 per cent — which is far higher than the original US proposal of 22 per cent — will likely win the day.

If the number is too low, Lopez says Quebec-based Tembec may not be able to sell all of its output or sell it profitably.

For it’s part, Resolute Forest Products has been very vocal, together with the Quebec government, as pro free trade with no quotas or duties. Montreal-based Resolute said producers in Quebec and Ontario pay market prices and should have access to free trade with the US.

Elsewhere, the BC Lumber Trade Council says it prefers free trade but could accept a flexible system that adjusts to market conditions instead of a hard quota. The BC Lumber Trade Council has said the claims levelled by the US lumber lobby are based on unsubstantiated arguments that were previously rejected by independent NAFTA panels.