Ottawa is challenging higher duties imposed on Canadian lumber imported into the United States, in the latest turn in a trade dispute that has persisted for decades between the two countries.

The challenge will be filed under the terms of the new North American free trade agreement, which was renewed in 2020 after a lengthy series of negotiations between the previous federal Liberal government and the Donald Trump administration in Washington.

In November, the U.S. government nearly doubled the tariffs collected on U.S.-bound Canadian lumber. The U.S. lumber industry has long argued that Canada’s system of allocating timber cutting rights amounts to government subsidies to the Canadian industry.

For just as long, Canada has refuted those U.S. claims, and argued tariffs on Canadian wood ultimately hurt new homebuyers in the U.S…read more.

Canfor Corporation (TSX:CFP) is capping 2021 with another investment outside of B.C. – bringing the total investment of B.C.’s forestry majors outside of B.C. to roughly $6 billion this year alone.

Canfor on Thursday announced it is buying Millar Western Forest Products Ltd. solid wood operations and associated tenure in Alberta for $420 million. In June, Canfor announced it would invest $200 million in Louisiana to build a new sawmill there.

B.C. forestry majors have been buying sawmills in the U.S., Europe and other parts of Canada in recent years, as the supply of timber in B.C. shrinks and the cost of operating here increases, compared to other jurisdictions.

Asked about a flight of capital earlier this week at an energy forum hosted by the Greater Vancouver Board of Trade (GVBOT), B.C. Environment Minister George Heyman dismissed the notion that forestry companies were voting with their feet.

“I don’t believe capital is fleeing in the province,” he said.

But in 2021 alone, B.C.’s forestry majors invested $5.8 billion acquiring or building assets outside of B.C., according to corporate filings and news releases…read more.

Canada’s central bank will maintain its current inflation target of two per cent, but will rely more on employment numbers to make policy decisions.

Since 1991, the Bank of Canada (BOC) has tried to keep inflation within one to three per cent, ideally at two per cent.

On Monday, it renewed its current inflation mandate with the federal government, which it does every five years.

The new focus of the latest agreement is supporting “maximum sustainable employment,” which is the highest jobs rate the economy can handle before inflation pressures kick in. The renewed mandate gives the bank added flexibility to adjust its policy to changing labour conditions.

Speaking to reporters in Ottawa, Finance Minister Chrystia Freeland said the bank can’t target inflation and employment at once.

“We are very explicitly … choosing not to do (a dual mandate),” she said Monday. “We are very clear in the mandate renewal that the paramount objective of the BOC is its inflation target of two per cent, within a one to three per cent band.”

Canada’s inflation skyrocketed to 4.7 per cent in October, the highest it’s been in nearly 20 years. The bank’s job is to adjust inflation to meet its target. It does this by either raising interest rates to cool inflation or cutting them to encourage spending and borrowing…read more.

The Canadian economy is recovering slower than its peers despite elevated inflation. BMO chief economist Douglas Porter indexed the GDP for Canada, the US, and Australia in Q3 2021. All three economies began as a v-shaped recovery, but Canada is the only one not to hit pre-pandemic levels. Despite signs of a strong economy, like low unemployment and rising inflation, Canada’s GDP is struggling to reach its pre-pandemic glory.

The US Had A V-Shaped Recovery And Has Nearly Fully Recovered 

The US economy had a few hiccups over the past couple of years, but they managed a v-shaped recovery. At the depths of the pandemic, the country’s GDP managed a smaller contraction than Canada. As of Q3 2021, American output is 1.4% above the pre-pandemic level.

“Given that the US economy ‘normally’ grows by around 2% per year, the output is thus still a bit more than 2 ppts shy of fully returning to full capacity,” observed BMO…read more.