Canada Heeds Softwood Lumber Ruling

Ottawa will implement additional export charges of 0.1% and 2.6% for Ontario and Quebec.

Canada will increase export charges on softwood lumber to the United States, the government said Friday after an arbitration court ruled it had wrongly subsidized lumber exports.

The London Court of International Arbitration last month supported U.S. claims that Canada broke the terms of a 5-year-old agreement on bilateral lumber trade.

After reviewing the decision, Canada's International Trade Minister Peter Van Loan said the tribunal ruled that "loan guarantee programs that specifically benefit the softwood lumber industry contravene the Softwood Lumber Agreement."

To bring Canada into compliance with the pact, he said Ottawa will implement additional export charges of 0.1% and 2.6% for Ontario and Quebec, respectively.

"The government will complete the necessary steps in parliament to implement these additional charges as of March 1, 2011," the minister added.

Van Loan did not specify the amount of the charges, but the office of the U.S. Trade Representative said last month Canada faced additional export levies of $59.4 million for violating the 2006 pact.

The complaint was the second by Washington against Ottawa over the lumber pact that has gone to arbitration.

The first, in 2007, was over Canada's miscalculation of export quotas and resulted in a $68 million fine.

The USTR lodged a third complaint last month, alleging that the province of British Columbia was setting an artificially low price for timber from public lands sold to lumber exporters -- which Van Loan rejected.

Copyright Agence France-Presse, 2011

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