Canada is challenging the U.S. International Trade Commission’s decision to maintain duties on Canadian softwood lumber, according to the country’s international trade minister, Mary Ng. The commissioner’s ruling last month was that lifting the duties would cause “material injury” to the U.S. forestry industry. Ng argued that this decision doesn’t make sense, especially since both Canada and the U.S. are currently grappling with problems of housing affordability and supply. To contest this determination, Canada plans to use the dispute resolution procedures contained in the U.S.-Mexico-Canada Agreement, also known as CUSMA. The decision to challenge the finding was reportedly made after consultations with affected provinces, stakeholders, and industry leaders.
Ng expressed disappointment in the U.S. for imposing unwarranted and unjust duties on Canadian softwood lumber products, stating that it negatively impacts the Canadian softwood industry and affects U.S. consumers and businesses that rely on Canadian lumber. The commission’s decision, which went into effect on Dec. 28, was part of a “sunset review,” a re-examination of the justification for duty orders as required by federal law every five years.
In October, Canada had previously celebrated a decision by a NAFTA dispute panel, which found aspects of how the U.S. calculates softwood lumber duties to be inconsistent with federal law. Under the U.S. Tariff Act, the Department of Commerce assesses whether goods are being sold at less than fair value or are benefiting from subsidies provided by foreign governments. Canadian lumber-producing provinces set stumpage fees for timber harvested from Crown land, which U.S. producers, who pay market rates, consider an unfair subsidy. Ng concluded by stating that Canada is ready to discuss a resolution that would provide stability and predictability to the sector, ensuring its growth and success.