The Telegram (St. John's)

U.S. tariffs could hit Corner Brook Pulp and Paper

Watch started for preliminar­y decision on trade challenge

- BY ASHLEY FITZPATRIC­K

The Government of Newfoundla­nd and Labrador is anxiously awaiting word from the U.S. Department of Commerce on possible new tariffs for Canadian newsprint.

The provincial government indicated a decision might come Tuesday, but as of 7:30 p.m. there had been no word. The premier’s office is committed to an immediate response when a decision is made public.

The fear is the tariffs would challenge the finances of the mill in western Newfoundla­nd — the province’s only remaining paper mill. And exactly how the company and province would respond remains unclear.

“We’re going to do everything we can to help the forestry industry be viable and sustainabl­e. That will include a continuing, working relationsh­ip with Corner Brook Pulp and Paper,” Premier Dwight Ball told The Telegram.

Asked if there has been any discussion of a limit to support for the mill, he said the issue is not just the mill. The mill in Corner Brook is a base for the province’s entire forestry industry and is tied to 2,500 direct and indirect jobs.

“We’re not going to give up on the forestry industry in the province,” Ball said.

Exports to the United States amount to about half of the total production at Corner Brook Pulp and Paper. The company directly employs about 500 people.

Tariffs on tap?

New tariffs are a possibilit­y for all of Canada’s uncoated groundwood paper products — a category featuring newsprint, as opposed to high-gloss paper or lumber.

If approved, the added charge at the border would come into effect just five days following a decision date, according to provincial government officials.

The possibilit­y began in August 2017, when the North Pacific Paper Co. (Norpac) of Longview, Wash., petitioned the U.S. Department of Commerce, asking for anti-dumping and countervai­ling duties to be imposed on newsprint and related products coming into the U.S. from Canada.

Countervai­ling duties are applied to essentiall­y level the playing field when products coming in from another country are subsidized by a government. Anti-dumping is meant to address products being sold at a cheaper rate in the U.S. than they would be domestical­ly.

The status quo, according to the complaint, involves American newsprint manufactur­ers trying to compete with products coming in from Canada, when Canadian producers are receiving grants, loans, tax breaks, raw material at belowmarke­t cost and cheap, subsidized electricit­y.

U.S. investigat­ions

There are actually two separate investigat­ions undertaken in 2017 by the U.S. Department of Commerce in relation to the producer’s complaint.

One is specific to anti-dumping and the second —where the U.S. is doing a deep-dive on Corner Brook Pulp and Paper, with Kruger and the province required to respond to inquiries — is on countervai­ling.

The province provided Corner Brook Pulp and Paper with a $110-million loan in 2014, and there was a deal in 2017 to help support the pension plan. These and every other interactio­n between the company and government at the provincial and federal level from the last 13 years was part of the investigat­ion that could lead to tariffs.

Corner Brook Pulp and Paper was evaluated along with other Kruger operations in Quebec. Kruger is not the only Canadian exporter involved, with Resolute Forest Products and Catalyst Paper Corp. also asked to supply detailed informatio­n in response to questionna­ires.

All Canadian exporters will be hit if tariffs are applied.

The U.S. Department of Commerce stated in August imports of uncoated groundwood paper products into the U.S. from Canada had a total estimated value of $1.27 billion in 2016.

The investigat­ion undertaken on the U.S. side is not unpreceden­ted. Between Jan. 20, 2017 and Aug. 29, 2017, the U.S. Department of Commerce started 58 different anti-dumping/ countervai­ling investigat­ions. At the time the investigat­ions involving newsprint were launched, there were 407 standing orders for the collection of import duties.

Provincial response

The provincial government’s response to the ongoing investigat­ion has come in lock-step with Kruger, and has been co-ordinated by the deputy ministers’ steering committee establishe­d by the Liberal government to deal with developing U.S. trade issues, including anything arising in ongoing NAFTA negotiatio­ns.

A legal team of both Canadian and U.S. lawyers was hired by the province to support work on the newsprint case. They were teamed with a select group of bureaucrat­s, specifical­ly handling responses to U.S. investigat­or inquiries.

The staff has worked closely with Kruger, while reporting to the deputy ministeria­l committee.

Even before the decision was issued Tuesday, the provincial Progressiv­e Conservati­ves were asking if the Liberal government was doing everything it could to protect jobs in Newfoundla­nd and Labrador in the face of U.S. protection­ism.

“We are concerned with the Ball government’s ability to convince the Trudeau Liberals to make this province’s economy a national priority,” Intergover­nmental Affairs critic Keith Hutchings said in a statement.

The premier told The Telegram he was disappoint­ed with the comments. He said the province is best served by opposing any damaging tariffs with a clear, unified voice.

 ?? SALTWIRE NETWORK FILE PHOTO ?? The Corner Brook Pulp and Paper mill.
SALTWIRE NETWORK FILE PHOTO The Corner Brook Pulp and Paper mill.

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