WASHINGTON — The federal government ruled Thursday that Canadian lumber shipments are injuring American competitors and upheld penalties that could add $270 to the average nationwide price of a new home and more than $500 in the costly Southern California market.

The International Trade Commission, the independent agency handling the penalty phase of trade disputes, agreed with the Commerce Department that the softwood lumber shipments have been improperly subsidized by Canada's provincial governments.

Canada is the world's biggest exporter of lumber and sells about $2.5 billion worth of products annually to the United States, where its lumber is in great demand for home construction. Much of the Canadian wood comes from old-growth forests, and is considered of unusually high quality, according to housing industry officials.

In a 4-2 vote, the ITC ruled that U.S. lumber producers have been harmed economically by shipments from Canada, and endorsed a 6.51% duty imposed by the Commerce Department.

Canada will appeal the ITC ruling to an arbitration panel created under the free trade agreement between the U.S. and Canada. The issue is politically sensitive in Canada, where the timber industry is a major employer in British Columbia. The argument over lumber is one of the most contentious issues between the world's biggest trading partners.

Canadian lumber is used in the basic framing of the rooms of a house. The average home uses 16,000 board feet of lumber, and the levy would add about $270 to a typical home now priced at $120,000, according to Gopal Ahluwalia, director of research for the National Assn. of Homebuilders. In Southern California, where typical new home prices often surpass $250,000, the added cost will be closer to $500, he said.

The cost of lumber already is highly volatile, reflecting the uncertainties about U.S. timber production because of increased restraints on logging under environmental laws. Lumber prices have leaped 40% and then fallen 30%, all during the past six months, Ahluwalia said.

When the housing market strengthens and demand rises, there will be additional upward pressure on prices, he said.

Canada last year eliminated a 15% fee it had charged on lumber shipments to the United States, a levy arranged under a 1986 trade agreement between the two countries.