By meadowlakeNOW

U.S. softwood tariffs challenge NorSask

Nov 21, 2017 | 12:45 PM

Recent changes to tariffs on softwood lumber will have a significant impact on Canadian lumber producers, but Meadow Lake’s NorSask Forest Products is up to the challenge, according to CEO Al Balisky.

Exports to the U.S. make up for over half of NorSask’s sales, and with the recent changes, they will be paying an extra 20.83 per cent tax on all sales into the U.S. for the locally-owned company.

“Tariffs mean costs to the lumber producers,” Balisky said. “We can counteract the tariff by ensuring that we are competitive with our peers in the Canadian forest industry.”

The company plans on staying competitive by improving operational efficiencies, upgrading to new technology and equipment, and striving to keep labour costs down. Balisky mentioned one upside to the tariffs is an overall increase in lumber prices.

“Labour costs are a major factor in an older sawmill so we are looking at ways to continue to see gains in efficiencies,” Balisky said. “Lumber markets also respond to the tariffs – so we have benefitted from higher lumber pricing since the tariffs have been in place. As an exporter to the U.S., NorSask benefits when the exchange rate is in our favour.”

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Balisky said there are no plans for layoffs due to tariffs for the 100-plus employees at the company. He said the tariffs and the associated loss of revenue expected to occur will encourage NorSask to build more resilience moving forward. 

“[We will] carefully manage costs and strategically invest in new technology,” he said.

In January, a fire at the facility forced the replacement and rebuilding of several pieces of equipment including log entry bins, wave feeders, log conveyors, waste conveyors, two de-barkers, a new slasher deck and log storage bins. The mill recently came fully back online after months of work, and Balisky said the silver lining to the fire were much needed upgrades.

“The recent rebuild strengthens the NorSask sawmill [with] brand new state-of-the-art equipment replacing 25 to 30-year-old equipment,” he said. “[This will give] improved outcomes with respect to increased production.”

kathy.gallant@jpbg.ca  

On Twitter @ReporterKath