Soft­wood bailout ne­go­ti­a­tions con­tinue

The Globe and Mail (Alberta Edition) - - REPORT ON BUSINESS WEEKEND - MIA RABSON OT­TAWA

Talks un­der way be­tween Ot­tawa, prov­inces and in­dus­try, but $1-bil­lion as­sis­tance plan not yet ready

A made-in-Canada so­lu­tion to help soft­wood pro­duc­ers and work­ers weather the storm of U.S. du­ties has been de­layed at least un­til the end of May.

It has been al­most a month since the U.S. Depart­ment of Com­merce slapped im­port du­ties of 3 per cent to 24 per cent on Cana­dian soft­wood, ar­gu­ing Canada un­fairly sub­si­dizes its in­dus­try by keep­ing the price of log­ging ar­ti­fi­cially low.

Cab­i­net dis­cussed a pack­age of op­tions for up to $1-bil­lion in aid for the soft­wood in­dus­try ear­lier this week, but ne­go­ti­a­tions with in­dus­try and pro­vin­cial gov­ern­ments are still un­der way.

A source with knowl­edge of the ne­go­ti­a­tions says Nat­u­ral Re­sources Min­is­ter Jim Carr had hoped to have the plan ready to present pub­licly by the end of this week, but things didn’t quite come to­gether in time.

The House of Com­mons is off next week for a break, which means the ear­li­est cab­i­net can dis­cuss and fi­nal­ize the plan now is May 30.

Mul­ti­ple sources say there were meet­ings at the pro­vin­cial level to dis­cuss the pack­age op­tions this past week. A Quebec source told The Cana­dian Press the gov­ern­ment was reluc­tant at first to do any kind of aid pack­age, but has since changed its mind.

Quebec and On­tario have been press­ing Ot­tawa to get loan guar­an­tees ready since at least Fe­bru­ary.

Mr. Carr said this week “ev­ery­thing is on the ta­ble” when it comes to pos­si­ble help for the in­dus­try as Canada pre­pares to fight the U.S. tar­iffs in court, and with both the World Trade Or­ga­ni­za­tion and un­der the North Amer­i­can free-trade agree­ment.

He specif­i­cally men­tioned loan guar­an­tees, which are one of the more con­tro­ver­sial op­tions be­cause some fear the United States will see them as sub­si­dies and will sim­ply hike the tar­iffs more.

Frank Dot­tori, chief ex­ec­u­tive of White River For­est Prod­ucts in North­west­ern On­tario, said that’s non­sense.

“We want a loan guar­an­tee,” he said on Fri­day.

He said the idea of loan guar­an­tees as a sub­sidy has been de­bated and re­viewed by in­ter­na­tional trade pan­els and re­jected.

Still, the last time Canada and the United States en­gaged in a soft­wood bat­tle, the $1.5-bil­lion aid pack­age, in­clud­ing loan guar­an­tees, was im­me­di­ately called a new sub­sidy by the U.S trade rep­re­sen­ta­tive.

In the end, it didn’t mat­ter then be­cause the United States and Canada were al­ready most of the way fin­ished ne­go­ti­at­ing a set­tle­ment on soft­wood that was fi­nal­ized just four months af­ter the pack­age was of­fered.

Mr. Dot­tori said his com­pany is pay­ing $500,000 a month in du­ties, a pun­ish­ing amount he can with­stand only be­cause the mar­ket is in­cred­i­bly hot and the Cana­dian dol­lar is low.

“What’s sav­ing us now is a 74cent dol­lar,” he said.

A loan guar­an­tee will help his com­pany keep peo­ple work­ing un­til Canada and the United States get a new deal, he said.

SEAN KILPATRICK/THE CANA­DIAN PRESS

Work­ers sort wood in Madawaska, Ont., in April. A Quebec source says Ot­tawa is no longer reluc­tant to of­fer an aid pack­age for soft­wood pro­duc­ers.

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