Article source: CMDGroup

Following up on the subject of Canadian construction material costs, this Economy at a Glance concentrates on seven graphs.

Graph 1: Softwood lumber prices in Canada rose rapidly throughout 2012, but over the past three years, they have stayed mainly flat. The U.S.-Canada softwood lumber agreement (SLA), after being in effect for nine years, was allowed to expire in October of last year.

Participants in Canada wanted to see continuation of the SLA under the same terms as originally negotiated. The U.S. industry has been wishing for a re-calibration of provisions.

Under the SLA, quotas and/or export taxes were to be imposed on Canadian producers when prices fell below a benchmark range.  Individual provinces were allowed to choose their own form of regulation. Additional disputes were argued on several occasions before the London Court of International Arbitration (LCIA).

Without the SLA, as shown by the long history of contentious wrangling prior to its 2006 implementation, there is considerable potential for legal action that will disrupt North American lumber markets. (more…)