U.S. Lumber Lobby May File Complaint Against Canadian Producers, RBC Says

The U.S. Coalition for Fair Lumber Imports may file a trade complaint against British Columbia wood producers over increased processing of timber that has low government harvesting fees, RBC Capital Markets said.

The complaint under the so-called Softwood Lumber Agreement between the U.S. and Canada may claim damages of as much as $400 million, Paul Quinn, a Vancouver-based analyst at the Royal Bank of Canada unit, said today in a note to clients.

“The key point of contention to U.S. lumber producers is the increase in the proportion of low-grade timber in the British Columbia lumber industry’s log diet,” Quinn wrote in the report.

The coalition has no public comment on what steps the U.S. government might take, Zoltan van Heyningen, executive director of the lobby group for U.S. lumber producers, said in an e- mailed statement today.

Low-grade lumber increased to 45 percent of British Columbia’s total timber harvest last year, up from about 10 percent in 2006, Quinn said in the report.

Shares of West Fraser Timber Co. and Canfor Corp., both based in Vancouver, may fall if a complaint is filed, said Quinn, who didn’t immediately return a call from Bloomberg News seeking comment.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.

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