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Ottawa helps forest producers weather lumber tariffs

Federal loan program called “subsidy” by U.S. lumber group
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Forest Products Association of Canada (FPAC) is pleased that Ottawa is making $867 million in loans available to aid forestry producers and workers being impacted by U.S. duties on softwood lumber. 

“We appreciate that the federal government is standing tall for Canadian forestry communities by launching a comprehensive package in the face of trade actions that we believe are without merit.” said Derek Nighbor, CEO of FPAC in a June 1 news release.

“This support will assist our efforts in continuing to transform our sector, diversify our markets, and support our workers.”

The program involves loans and loan guarantees from the Export Development Bank of Canada and the Business Development Bank of Canada designed to be coordinated with provincial programs to support the Canadian wood products sector.

“We are a proud Canadian industry with a track record of providing good jobs in rural and northern Canada, while sustainably managing our forests for generations to come,” said Nighbor.

“These actions by the federal government are a critical step as we work to secure a strong forest sector of tomorrow.”

The money is earmarked for those companies seeking to diversify their product line, make efforts to develop new markets overseas, help Indigenous communities and groups improve their performance and participation in forestry, and extend work-sharing agreements from 38 to 76 weeks in order to minimize layoffs.

“This action plan delivers on our pledge to take swift and reasonable action to defend our softwood lumber industry and charts a stronger future for the workers, families and communities that depend on it,” said Natural Resources Minister Jim Carr in a statement.

“We are prepared to take further action, including additional loan guarantees, to address market conditions.”

The U.S. Department of Commerce slapped countervailing import duties as high as 24 per cent on Canadian softwood on April 28, contending Canada unfairly subsidizes the forestry industry. Tariffs on Canadian lumber could be jacked even higher after June 9 when Washington will decide whether to impose additional anti-dumping duties.

The powerful and highly influential U.S. Lumber Coalition called Ottawa’s aid program a “new government subsidy for Canadian softwood lumber producers only further tilts the trade scale in Canada’s favor, threatening more than 350,000 jobs in communities across the Unites States,” said spokesperson, Zoltan van Heyningen.

“The U.S. Commerce Department’s recent anti-subsidy duties were a step in the right direction, and we appreciate the Administration’s support. But Canada continues to push back and refuses to play by the same set of rules. We need a level playing field and must limit the flow of unfairly subsidized softwood lumber shipments flooding the U.S. market, driving American lumber manufacturers out of business.”