A group led by the US Lumber Coalition has unleashed a new stage in a long-running trade dispute, claiming climate change mitigation programs are unfair subsidies to Canadian softwood producers.<\/p>\n
\u201cWe are hereby filing a claim regarding additional subsidies available to Canadian manufacturers of softwood products,\u201d the group said in a 56-page document recently filed with the US Department of Commerce.<\/p>\n
New subsidies come from four federal programs in Canada designed to help companies meet climate goals, according to influential US industry group COALITION, which stands for Committee Overseeing Action for Lumber International Trade Investigations Or Negotiations.<\/p>\n
COALITION argues that funding related to reducing Canada\u2019s emissions of greenhouse gases should be included in future US regulations setting countervailing tariffs.<\/p>\n
The US lumber lobby complains about climate subsidies in two initiatives managed by Natural Resources Canada \u2013 the Clean Growth Program and the Green Freight Assessment Program. Federal measures such as the promotion of high-growth companies in Western Canada (Western Business Scale-up and Productivity Program) and a tax break to promote the use of renewable energy sources (Tax Savings for Industry) are also being sought.<\/p>\n
The Canadian government disagrees with the US characterization of climate subsidies, adding that the tax treatment is an accelerated capital cost reimbursement for each industry and not a separate program.<\/p>\n
On the provincial side, COALITION says British Columbia is providing new subsidies, including through two programs under CleanBC, while New Brunswick oversees two climate initiatives that help industries like forestry.<\/p>\n
The Department of Commerce said it was \u201claunching an investigation into subsidy programs,\u201d beginning with sending out questionnaires to government and industry officials in Canada.<\/p>\n
COALITION, which includes Seattle-based Weyerhaeuser Co., said it was important for the Commerce Department to look into the new subsidy allegations. \u201cThe Department must take the necessary steps to verify the use of the alleged subsidies and the actual benefits, whether measurable or not, by collecting this information from respondents and governments,\u201d the US timber company said in a separate 16 -side document.<\/p>\n
US authorities claim that the logging fees Canadian companies pay to provincial governments for cutting down trees on crown land are too low, amounting to subsidies. In contrast, US timber producers buy their timber mainly from private forest owners.<\/p>\n
In addition to targeting what it sees as climate subsidies, COALITION has slammed a tax exemption for Canadian exporters, saying a federal wages program that supports hiring Indigenous youth in Canada should be factored into calculations for US tariffs.<\/p>\n
Canadian respondents countered that COALITION grossly exaggerated its arguments, for example by describing subsidies that allegedly went to several Canadian manufacturers that never received such funding.<\/p>\n
The Canadian government, five provinces and Canada\u2019s forest industry have informed the Department of Commerce that they will not provide unfair subsidies specifically to Canadian softwood producers to combat climate change.<\/p>\n
\u201cThe Department should ensure that its approach does not undermine the Biden administration\u2019s stated policies to address climate change, reduce greenhouse gases and protect the environment,\u201d said a 52-page document prepared by attorneys for the Canadian government and other Canadian resident parties. \u201cPrograms aimed at achieving a better environment and averting a climate crisis cannot be considered specific.\u201d<\/p>\n
For example, British Columbia\u2019s actions to encourage the deployment of zero-emission vehicles are available to a variety of industries and are not specifically targeting the timber sector, the Canadian document said.<\/p>\n
\u201cIf the Department were to challenge any of these programs in this review, the Department would be in violation of applicable tariff offsetting laws and regulations and in conflict with the Presidential Executive Order that guides trade policy to address the global climate crisis. \u2018 lawyers for the Canadian government and other parties from Canada said in their filing.<\/p>\n
The 2006 Softwood Agreement between Canada and the United States expired in October 2015 without replacement.<\/p>\n
The protracted trade war enters its fifth round and dates back 40 years. The US International Trade Commission ruled in November 1982 that Canadian softwood supplies were causing economic damage to producers in the United States and sparked the trade war.<\/p>\n
In the latest round, the Department of Commerce began imposing tariffs on Canadian lumber in April 2017. The countervailing and anti-dumping duty rates have fluctuated since then.<\/p>\n
The current combined US tariffs are 8.59 percent, consisting of 3.83 percent countervailing duties and 4.76 percent anti-dumping duties, levied on most Canadian timber producers shipping shipments south of the border.<\/p>\n
Four Canadian manufacturers pay different prices than most others. Resolute Forest Products Ltd.\u2019s combined RFP-T duty rate. Montreal-based is the highest among Canadian manufacturers with 14.86 percent, followed by JD Irving Ltd. based in Saint John with 14 percent.<\/p>\n
West Fraser Timber Co Ltd WFG-T pays a combined duty rate of 8.25 percent, while Canfor Corp. 5.87 percent. West Fraser and Canfor are based in Vancouver.<\/p>\n
Last month, the Canadian government challenged the latest tariff rates under a dispute settlement procedure under Chapter 10 of the Canada-US-Mexico Agreement.<\/p>","protected":false},"excerpt":{"rendered":"
A group led by the US Lumber Coalition has unleashed a new stage in a long-running trade dispute, claiming climate change mitigation programs are unfair subsidies to Canadian softwood producers. \u201cWe are hereby filing a claim regarding additional subsidies available … Continue reading