Canada giving C$867 million to help those hit by U.S. lumber tax

By David Ljunggren

OTTAWA (Reuters) – Canada will give C$867 million (US$642.22 million) in aid to the softwood lumber industry after the United States imposed duties on exports and is prepared to offer more help in future, the government said on Thursday.

Washington in April imposed preliminary anti-subsidy duties averaging 20 percent on imports of Canadian softwood lumber. U.S. producers say the exports are unfairly subsidized, a charge Canada strongly denies.

“Canadian workers are under pressure because of duties which are unfair and punitive… we’re not going to let those Canadian workers, those Canadian families, be hurt and stand idly by. We’re going to help,” said Foreign Minister Chrystia Freeland.

The dispute has increased tensions between Canada and the United States ahead of talks on renegotiating the North American Free Trade Agreement. Mexico is also a member of the pact.

Most of the aid – up to C$605 million – will be in the form of loans, loan guarantees and commercial financing. Reuters revealed the outlines of the package on Wednesday. [L1N1IX23K]

The government stresses the package is trade compliant. Any hint Ottawa is offering a subsidy to the industry could provoke a U.S. challenge.

“We are prepared to take further action, including additional loan guarantees, to address changing market conditions,” Natural Resources Minister Jim Carr told a news conference, flanked by Freeland.

The U.S. Lumber Coalition, a vocal alliance of lumber producers, attacked what it called a subsidy that “only further tilts the trade scale in Canada’s favor.”

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