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The roots of the dispute lie in different traditions. In the United States, most forests are privately owned, and timber prices are set by private contracts or auctions. In Canada, almost all forests belong to provincial governments, which grant companies long-term cutting-rights in return for promises about job numbers and sustainable forestry. Governments set harvest levels, restrict the export of raw logs and set stumpage rates (or cutting fees) according to market conditions.

If I am reading this correctly, the Canadian sellers are getting free trees from the government owned forest while the US sellers are buying them at auction from private timber growers. Heck, even I could probably under sell my competitors and still make a profit with free raw materials.

That is the reality of the lumber marketplace in Canada - a country larger than ours with only 32 million people living in it. The only way we can stay competitive with them in the short term is to slap unfair tarifs on their products. Then, when we want Canada to play ball with us on other issues (MD, Iraq)we seem surprised when they say no.

We HAVE to stop giving our largest trading partner the finger on things that are important to them if we want them to stop giving us the finger on things important to us...

Historically, there really hasn't been all that much of a difference between the U.S. and Canada when it came to lumber production. What has changed in the last ten years or so is that the U.S. government has restricted logging on much public land that used to be harvested regularly.

There's a very simple reason why Canadian lumber is so much cheaper, and it really has nothing to do with the so-called "government subsidy" in Canada. The reality is that Canadian lumber is so much cheaper because there's a lot more trees up there.

In addition, the element of U.S. demand for Canadian energy sources comes into play as well. Canadian mills along the eastern slopes of the Rockies in Alberta have a cheap source of lumber at their disposal -- the trees that are cut for oil and gas exploration and production. The energy companies cut these trees to clear land for seismic cuts and oil and gas rigs, and sell them at major discounts just to generate some extra revenue from something that would otherwise go to waste.