The relief package for the softwood lumber industry is welcomed by forestry workers as a good start to cushioning the blow dealt by new USA duties on Canadian softwood exports.
The Business Development Bank of Canada (BDC) will make $105 million in commercial financing available to help eligible forestry companies in the short and medium term. The tax was levied after negotiations about US dairy exports to Canada fell through. The rates are likely to go up after June 9, when the USA will decide whether to also impose anti-dumping duties on top of the countervailing ones.
That accusation will likely be added to the American industry's case as it makes its way through the U.S. Department of Commerce and Court of International Trade.
Ottawa is set to back the Canadian softwood lumber industry with a $1 billion aid package, in a move to offset the impact of punitive duties imposed on Canadian timber as a result of a trade dispute with the United States. Senior government officials speaking on background said the package was put together with input from trade lawyers who ensured it meets Canada's global obligations.
Softwood lumber, which includes pine and other varieties, is heavily used in the construction of new homes.
Leaving climate deal likely wouldn't add U.S. jobs
For his part, Trump tweeted only that he would be announcing his decision regarding the treaty "over the next few days". The official insisted on anonymity in order to discuss the decision before the official announcement.
Carr has repeatedly called the American allegations baseless, saying the USA has lost repeatedly when challenged by Canada before the World Trade Organization or under the North American Free Trade Agreement.
Canada's softwood lumber producers face between 3.2% to 24.12% in U.S. countervailing duties, which are meant to level the playing field between domestic producers and government-subsidised foreign producers of an item. Tariffs for new shipments will be collected by the United States during a four-month period for countervailing duties and a six-month period for anti-dumping, but additional duties will be suspended pending a final determination by the U.S. Department of Commerce. That explains why Tolko is planning to open an OSB plant in Alberta, Taylor said.
USA new housing starts are at around 1.2 million whereas the long-term average is 1.5 million.
Some analysts have pointed out, however, that the housing market in the U.S.is changing, with more condo construction, and less single family home construction, which could mean the long-term average is a thing of the past. "I certainly think that is one approach they could take". The greatest amount of job losses? "This was inevitable. We think that probably this (duties) is going to accelerate the closure of one or two mills that would have lasted a little bit longer".
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