Not Everyone Happy With Softwood Deal - Take It Or Leave It.

The Ontario Lumber Manufacturers Association and the Ontario Forest Industries Association have filed actions in the U.S. Court of International Trade and the U.S. Court of Appeals in Washington, D.C., to challenge the suspension by both Canada and the U.S. of NAFTA panel proceedings on the softwood lumber issue. The associations want a North American Free Trade Agreement (NAFTA) panel ruling stating that Canadian softwood lumber is not unfairly subsidized finalized. Both organizations say despite the softwood lumber agreement reached April 27, the industry must still deposit about $40 million every month in countervailing duties. The seven-year lumber deal calls for the lifting of punitive duties and a return of 80 per cent of the more than $5 billion in duties Canadian companies have paid the United States since 2002. In exchange a sliding export tax between five and 15 per cent will kick in when the North American lumber price drops below $355 per thousand board feet. So when the market is bad, producers pay a high tax. When the market is good, there is no tax. “This means Canadian mills will be shut down in a bad market,” says Russ York, CFO for Buchanan Forest Products Ltd. “At some point, Canadians will be laid off as a result of this decision.” www.ofia.com www.ontariosforests.mnr.gov.on.ca http://www.nob.on.ca/industry/forestry/06-06-deal.asp [Proofreader's note: this article was edited for spelling and typos on June 15, 2006]

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