Money Softwood bailout now expected by end of May

07:20  20 may  2017
07:20  20 may  2017 Source:   MSN

Who's right and who's wrong in the softwood lumber dispute?

  Who's right and who's wrong in the softwood lumber dispute? The United States has imposed duties up to 24 per cent on Canadian softwood lumber exports, causing concern about job losses in communities across Alberta. Here’s some background on the feud. What’s the dispute all about?The United States has argued for decades that Canada is unfairly subsidizing its lumber industry. Most Canadian logging happens on Crown land, while in the U.S., it is almost entirely on private land. The U.S. loggers claim Canadian logging companies aren’t paying market value for the rights to harvest on the Crown land.Well, are they right?That depends who you ask.

OTTAWA -- A made-in-Canada solution to help softwood producers and workers weather the storm of U.S. duties has been delayed at least until the end of May . The House of Commons is off next week for a break week, which means the earliest cabinet can discuss and finalize the plan now is May 30.

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OTTAWA - A made-in-Canada solution to help softwood producers and workers weather the storm of U.S. duties has been delayed at least until the end of May.

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It has been almost a month since the U.S. Department of Commerce slapped import duties of three to 24 per cent on Canadian softwood, arguing Canada unfairly subsidizes its industry by keeping the price of logging artificially low.

Cabinet discussed a package of options for up to $1 billion in aid for the softwood industry earlier this week, but negotiations with industry and provincial governments are still underway.

A source with knowledge of the negotiations says Natural Resources Minister Jim Carr had hoped to have the plan ready to present publicly by the end of this week, but things didn't quite come together in time.

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  Quebec lumber workers among first hit by duty-inspired layoffs Starting Monday, Resolute Forest Products is cutting shifts at seven sawmills and delaying the start of forest operations that will affect 1,282 workers. Pierrot Fortin, who experienced such heartache during the last impasse in the early 2000s, is again preparing for lost income and uncertainty.“Work stoppages like this are never easy,” said the truck driver who hauls wood from forests in the Lac-Saint-Jean region.“It has an impact on families and everyone is worried.”But the 48-year-old says he’s luckier than some — his house is almost paid and his two children are no longer babies.

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The House of Commons is off next week for a break week, which means the earliest cabinet can discuss and finalize the plan now is May 30.

Multiple sources say there were meetings at the provincial level to discuss the package options this past week. A Quebec source told the Canadian Press the government was reluctant at first to do any kind of aid package, but has since changed its mind.

Quebec and Ontario have been pressing Ottawa to get loan guarantees ready since at least February.

Carr said this week "everything is on the table" when it comes to possible help for the industry as Canada prepares to fight the U.S. tariffs in court, and with both the World Trade Organization and under the North American Free Trade Agreement.

He specifically mentioned loan guarantees, which are one of the more controversial options because some fear the U.S. will see them as subsidies and will simply hike the tariffs more.

Canadian softwood lumber could find a home in China, says Canadian ambassador

  Canadian softwood lumber could find a home in China, says Canadian ambassador Canada’s new ambassador to China suggested that as this country’s softwood lumber industry faces tumultuous trade times with the United States, it may want to “seize” the opportunity to export more products to China. "With trouble on the U.S. front in that sector, it's more natural for Canada to turn to China as a partial recipient of Canadian forest products," said John McCallum, who spoke to a Chinese delegation meeting with Alberta business leaders in Edmonton on Tuesday.

Published May 19, 2017 Updated May 19, 2017. A made-in-Canada solution to help softwood producers and workers weather the storm of U.S. duties has been delayed at least until the end of May . "What's saving us now is a 74-cent dollar," he said.

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Frank Dottori, CEO of White River Forest Products in Northwestern Ontario, said that's nonsense.

"We want a loan guarantee," he said Friday.

He said the idea of loan guarantees as a subsidy has been debated and reviewed by international trade panels and rejected.

Still, the last time Canada and the U.S. engaged in a softwood battle, the $1.5-billion aid package, including loan guarantees, was immediately called a new subsidy by the U.S. trade representative.

In the end, it didn't matter then because the U.S. and Canada were already most of the way finished negotiating a settlement on softwood that was finalized just four months after the package was offered.

Dottori said his company is paying $500,000 a month in duties, a punishing amount he can withstand only because the market is incredibly hot and the Canadian dollar is low.

"What's saving us now is a 74-cent dollar," he said.

A loan guarantee will help his company keep people working until Canada and the U.S. get a new deal, he said.

Canada can't file an appeal of the tariffs until early next year because the final determinations from the U.S. government on the softwood issue won't be made until late fall. Negotiations to get a settlement agreement continue in the meantime.

Another key element of the aid negotiations involves assistance to bring more value-added work to Canada, so instead of exporting mostly raw logs, Canadian companies turn those logs into door and window frames, furniture and countertops, among other things, and sell the finished products.

Earlier this week, Canada applied for exemptions to the duties for many of those finished products, such as bed frames and butcher block counters. No decision has yet been made on that issue.

It took Canada and the U.S. four years to reach a negotiated settlement on softwood from the time duties were imposed the last time. Within a year of the duties being imposed, 15,000 workers were laid off.

Over the course of the dispute, Canadian producers paid more than $5 billion in duties to the U.S. The settlement required the U.S. to return 80 per cent of that.

— with files from Andy Blatchford; follow @mrabson on Twitter

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