cedar poisening

We have a sloped section of clay soil in our yard that lives against a north facing mountain in Kamloops BC. (Canada). The novices that we are, we mulched our plants with cedar wood chips. 2-3 years later our spireah and lilac and several other plants while still alive, are slowly dying. Ok, now I know the cedar chips have got to go, and gone they have. My question is, now what? Thinking of spreading a bag of lime over the roughly 1000 sq ft involved, and testing the soil in the spring? would a topical application work or does it need to be worked into the ground?
Or should I just give up and plant cedars (rather not)...ohh cry~
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