Job cuts loom with trade spat over pa­per, lumber

The Hamilton Spectator - - BUSINESS - ROSS MAROWITS

Que­bec pa­per and lumber pro­ducer Res­o­lute For­est Prod­ucts ex­pects it will have to cut jobs soon as it faces U.S. trade ac­tions on two fronts.

“It is un­avoid­able in my opinion be­cause of the dis­rup­tion in the market,” CEO Richard Garneau said Thurs­day in an in­ter­view af­ter dis­clos­ing weaker first-quar­ter re­sults.

The Mon­treal-based com­pany has de­posited $43 mil­lion with the U.S. Depart­ment of Com­merce for 17.87 per cent du­ties im­posed in Novem­ber 2015 on im­ports of su­per­cal­en­dered pa­per which is mainly used in magazines, cat­a­logues and ad­ver­tis­ing inserts. The an­nual cost of du­ties is about US$25 mil­lion.

It also ex­pects to pay US$17 mil­lion this year and US$50 mil­lion an­nu­ally for coun­ter­vail­ing lumber du­ties.

Garneau said fight­ing both trade ac­tions is very dis­rup­tive.

Res­o­lute faces a 12.82 per cent pre­lim­i­nary duty for lumber, less than the 19.89 per cent retroac­tive du­ties ap­plied to other Que­bec and On­tario pro­duc­ers.

Garneau called both sums un­fair given the market-based lumber pric­ing sys­tems in Que­bec and On­tario and said he’s con­fi­dent they will be low­ered in the fi­nal de­ter­mi­na­tion later this year be­cause Amer­i­can author­i­ties used Nova Sco­tia’s sys­tem as a bench­mark and im­prop­erly ap­plied Hy­dro-Que­bec ex­penses in its cal­cu­la­tions.

Still, Garneau ex­pects the ef­fect on Res­o­lute and the Cen­tral Cana­dian lumber sec­tor will be quick, with a re­duc­tion in sawmill shifts that will have a cas­cad­ing ef­fect on other jobs.

Res­o­lute has 1,200 peo­ple work­ing to sup­port two su­per­cal­en­dered pa­per mills and 4,000 peo­ple in its lumber op­er­a­tions. Garneau de­clined to say how many work­ers could be af­fected.

Uni­for, which rep­re­sents 24,000 forestry work­ers at 134 com­pa­nies, fears du­ties will hurt 25,000 Cana­dian jobs, pun­ish­ing small com­mu­ni­ties de­pen­dent on the for­est in­dus­try.

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