Canada mulls retaliation in softwood dispute

U.S. TARGETED

American duties on softwood lumber have sparked reaction in Canada on several fronts. rest, one source said.

“We hope we don’t have to act,” said the source, speaking on condition of anonymity in order to discuss matters not yet made public.

“We hope this dispute can be resolved.”

The course of action being reviewed by the Canadian government is similar to the process used in the U.S. that slapped a 20-per-cent duty on lumber. It involves a request to the Canada Border Services Agency to study illegal subsidies in Oregon, a process that would take several months.

The government says it has identified nine programs in Oregon that assist businesses, primarily in lumber.

They include: the Oregon Underproductive Forestland Tax Credit, the Oregon Forest Resource Trust, the Oregon Tree Farm Program, the Pacific Forest Trust, property tax exemptions for standing timber, a small winery tax exemption program and other tax credits.

“It’s a real thing. Our officials have already been looking at this,” said one government official familiar with the plan. “Wyden has been a chief proponent for years of the baseless and unfounded claims against the Canadian softwood lumber industry.”

These threats arrive in a climate of escalating trade hostilities. Trump’s recent digs at Canada have drawn reactions north of the border. The strongest reactions have come from provincial governments.

Ontario is reportedly examining targets for retaliation in the event of any new Buy American provisions. And B.C.’s premier has turned a threat of retaliation into the centrepiece of her current election campaign.

But a former diplomat urged caution.

Clark’s threat to ban or tax U.S. thermal coal would be against Canada’s own interests, said Colin Robertson, a former member of Canada’s NAFTA negotiating team, now vice-president at the Canadian Global Affairs Institute.

“You don’t want to stop the Americans using our ports,” Robertson said in an interview. Ports in Seattle and Portland would be quite happy to snap up that business at the expense of Canadian jobs, Robertson added. on Canadian energy trade, as was done by former president Barack Obama when he rejected Keystone XL, which Burney said was a violation of the agreement. Trump reversed that decision when he approved the project in March.

Keystone XL is one of the top projects planned by TransCanada, which reported Friday an increase in profit to $643 million in the first quarter, from $252 million in the same period a year ago, after a “transformational year” in 2016 that included the US$14-billion acquisition of Columbia Pipeline Group to expand in the growing gas-producing Appalachian region of the U.S.

President and CEO Russ Girling told shareholders his pipeline company has $23 billion in near-term growth projects under way and $45 billion of opportunities for the long term, including KXL and the Energy East pipeline to Canada’s East Coast.

Girling said it’s hard to pin down a completion date for either “with any credibility.”

Both projects are controversial and have been repeatedly delayed.

KXL is waiting for the completion of a review of its route in Nebraska by Nov. 23.

It is also negotiating new deals with shippers that are being complicated by weaker balance sheets and the availability of transportation options, including rail and the Trans Mountain pipeline expansion, Girling said.