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Ottawa says U.S. softwood allegations ‘baseless and unfounded’

Jim Carr

Ottawa “strongly disagrees” with the United States’ decision to levy countervailing duties against softwood lumber heading south of the 49th parallel.

“The Government of Canada disagrees strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty,” said Jim Carr, Minister of Natural Resources, and Chrystia Freeland, Minister of Foreign Affairs, in a joint statement issued this morning. “The accusations are baseless and unfounded.”

The U.S. Department of Commerce yesterday announced that preliminary countervailing duties of nearly 20 per cent will be applied to the majority of Canadian softwood lumber shipments entering the United States.

“This decision will negatively affect workers on both sides of the border, and will ultimately increase costs for American families who want to build or renovate homes,” said the statement from Ottawa. “The U.S. National Association of Home Builders has calculated that a $1,000 increase in the cost of a new house would put home ownership beyond the reach of more than 150,000 American families, and jeopardize thousands of jobs in the American home construction industry.

“The Government of Canada will vigorously defend the interests of the Canadian softwood lumber industry, including through litigation. In ruling after ruling since 1983, international tribunals have disproved the unfounded subsidy and injury allegations from the U.S. industry. We have prevailed in the past and we will do so again.”

Preliminary countervailing duties in the form of cash deposits become effective around May 1, 2017, (once notice published in U.S. federal register) for four months to the end of August. Thereafter, these duties will not be collected until the final orders are published in January 2018.

SUPPORT FOR WORKERS, COMMUNITIES, AND INDUSTRY

Ottawa is re-convening the Federal-Provincial Task Force on Softwood Lumber this week to examine additional measures.

“The task force was formed to share information and analyze and assess the needs of forest workers and communities,” said the statement. “The upcoming meeting will build on the progress we have made through this federal-provincial collaboration on the softwood lumber file.”

Immediate action includes:

  • Ensuring companies take full advantage of existing financing initiatives under the Business Development Bank of Canada and Export Development Canada, which offer a range of financial services to Canadian businesses on commercial terms. These initiatives are available to exporters of all sizes and can assist companies looking to make capital investments, expand market opportunities, and diversify with confidence into new markets.
  • Promoting the use of Canadian wood right here at home. Budget 2017 provided $40M for increasing wood use in Canada, allowing Canada to continue its world leadership in tall wood building development, partnering with industry and the provinces to build on successes such as the 18-storey University of British Columbia’s Brock Commons residence building, the tallest wood building in the world.
  • Actively working to help the forestry industry to access new markets. International Trade Minister François-Philippe Champagne is currently with a delegation of Canadian lumber representatives in China, promoting Canadian products. Minister Carr will travel to China in June with forestry leaders, to build on this momentum. Minister Jean-Yves Duclos is currently in the United Kingdom and Europe promoting Canadian wood.
  • Employment and Social Development Canada stands ready to provide essential services to support workers who may be negatively affected. This support includes employment insurance and career counselling, as well as retraining and skills development programs that are delivered at the provincial level.
  • Indigenous workers will have access to services through the Aboriginal Skills Employment and Training Strategy program. Currently, ESDC transfers nearly $3 billion annually to provinces through Labour Market Transfer Agreements, as well as an additional $2.7 billion over six years announced in Budget 2017.

SEEKING A LONG-TERM AGREEMENT

Canada will continue to the U.S. rescind this trade action.

We are committed to working with the U.S. administration to achieve a durable solution,” reads the statement from Ottawa. “Canada has put forward a number of reasonable proposals to the current U.S. administration that is responsive to views expressed by U.S. industry.  These proposals ensure security of supply at fair prices to U.S. consumers and U.S. companies that rely on Canadian imports.

“We remain confident that a negotiated settlement is not only possible but in the best interests of both countries.”

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