No direct subsidies are given to lumber producers. However, USA says that canadian lumber producers have subsidies because they can buy forests at cheap price from their governement.

the difference between the way canadians do stumpage and the way the americans do things is that the bulk of our forestry lands are publically owned rather than privately owned. a certain percentage is set aside for small firms but the majority of it is open to all. both of us auction off the rights to cut the timber on the land. some of the big lumber companies have sweetheart deals on large patches of land that go back a ways which give them cheap stumpage fees. the thing that burns me about this whole deal is that if we drop a tree and turn it into 2x4's its tarriffed when it crosses the border. if it goes across as a raw log to be 2x4ed by an american mill it's not. yet the entire basis for the kvetching and tarrifs is our low stumpage rates which are the same for both raw log and 2x4. personally i would just make it impossible to ship raw logs out of the province other than for log homes etc. as the situation stands the forestry companies are exporting a crap load of raw logs to feed their american mills to avoid the tariffs. the net result of this tarrif thing has been to really encourage bc mills to modernize and cut costs which is just going to make the situation worse for the states when the tarrifs go down. the american mills shielded by their tarrifs haven't felt the pressure to modernize and their cost per board foot is higher. couple this with the fact that for framing northern wood is better than southern wood and you will see the canadian share of the market expand pretty rapidly which will almost certainly set off another round of tarrifs. it's like the cedar shake business some years ago. the american producers managed to get rather heavy tarrifs on canadian imports which in the end led to a thank you note from the guys who made various other kinds of roofing. all they did with the tariff was to drive the supply way down and the price way up which led to builders using other types of roofing. the logic behind this sort of thing baffles me. in the cedar case for instance the american producers were very upset that canadians had such a large share of the market. the fact that canadians had a lot more cedar than the americans did somehow eluded them. when they got their tarrifs they drove the supply down and the prices up enough to cause wholesale desertion of the builders. net result was a loss for everyone involved in the cedar business. saw the us homebuilders association a couple years ago said that it was costing an average of 1200 extra to build a house in the us over the lumber tariffs. it's like the steel tarrifs of recent history. to save a single job in the steel industry the usg put in tarrifs and wound up costing 7 jobs among steel consumers in the us. this is without counting the cost of the eu tarrifs in response. for a guy who talks about free trade bush sure seems leery of any of it breaking out on his watch.