Resolute expects job cuts

Lumber company is facing two duty disputes in the U.S.

MONTREAL— 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 $31.2 million (U.S.) 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, corporate brochures and advertising inserts.

The annual cost of duties is about $25 million.

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

Garneau said fighting both trade actions is very disruptive.

Resolute faces a12.82-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 impact 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.