B.C. forests minister Steve Thomson rejects U.S. ruling suggesting Canadian softwood may be subsidized

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      One of the longest-standing trade irritants between Canada and the United States has reared its head again.

      The U.S. International Trade Commission has ruled that there's a "reasonable indication" that U.S. timber producers are "materially injured by reason of imports of softwood lumber products from Canada".

      Moreover, the commission declared that these imports are "allegedly subsidized and sold in the United States at less than fair value".

      This has persuaded the U.S. Department of Commerce to continue investigating antidumping and countervailing duties that could be applied on Canadian softwood lumber as a remedy.

      In response, B.C. Forest Lands and Natural Resource Operations Minister Steve Thomson has claimed that "time after time" these allegations have been proven to be false before panels assembled under the World Trade Organization and the North American Free Trade Agreement.

      There were 65,500 people directly employed in the B.C. forest industry in 2015, according to a B.C. government report published last year.

      "B.C.'s forest policies are trade compliant," Thomson said in a statement. "This issue can be resolved only with a fair, negotiated trade agreement with the United States, not more litigation. Despite numerous discussions during 2016 between Canada and the U.S., attempts to reach an agreement were unsuccessful.

      Last year, CNN reported that President-Elect Donald Trump planned to push hard on softwood lumber as part of a renegotiated NAFTA.

      Thomson, however, claimed that any move to impose duties will result in higher U.S. housing prices.

      "With forecast for continued increase in U.S. housing starts, the U.S. needs our lumber and penalties only hurt housing affordability for middle-class Americans by raising building costs," Thomson said. "It is in the best interest of both sides to quickly come to terms on a deal and get back to focusing on growing our respective economies rather than wasting time, energy, and resources in costly litigation."

      The commission's public report on Canadian softwood lumber will be available after February 7 on its website.

      In the past, the U.S. Lumber Coalition has repeatedly claimed that Canadian softwood lumber is subsidized, costing jobs in several states and denying tree farmers fair market value for their crops.

      In its petition to the commission, the coalition pointed to how provincial governments, which own most of the timber-producing lands, offer various subsidies including licences for "an administered fee that is far below the market value of the timber".

      B.C.'s largest forest company is Canfor Corp., followed by West Fraser, Tolko Industries, and Western Forest Products.

      According to Canfor's 2016 information circular, its largest shareholder is Vancouver businessman Jim Pattison, who holds 44.2 percent of the company's common shares.