Released on December 17, 2003
The latest proposal to end the Canada/U.S. softwood lumber trade dispute is significantly flawed and needs to be changed."The proposal on the table right now is a problem for Saskatchewan," Government Relations Minister Len Taylor said. "Our biggest concern is that it wouldn't provide our smaller mills - many of which are community and/or Aboriginally-owned - with their fair share of export quota. Their continued survival, let alone prosperity, is at stake."
The proposed deal would remove the U.S. duties, now averaging about 27 per cent, on Canadian softwood lumber exports. It would allow free Canadian access to the U.S. up to 31.5 per cent of U.S. market share. Above that share, Canada would impose a prohibitive export tax or fee. Canada is also proposing to allocate that duty/tax-free share of the U.S. market (as export quota) to provincial forest companies based on their U.S. export levels between April 1st, 2001 and September 30th, 2003.
"We think the Saskatchewan industry is being treated unfairly," Taylor said. "Saskatchewan's best export year was 2000 and, after the U.S. duties were imposed in May 2002, our exports to the U.S. dropped dramatically because our smaller mills couldn't afford to absorb the cost of duties and keep shipping into the U.S. The proposed Canadian quota allocation rules don't adequately take these factors into account. Many of our softwood producers would now be punished for having taken necessary business decisions over the last few years."
Saskatchewan is also asking the Government of Canada to make other changes to the proposed agreement. Saskatchewan has two other concerns with the proposed quota allocation process. First, the proposed system wouldn't effectively deal with new entrants to the industry. Secondly, allowing quota allocations to be transferred among provinces places our industry at risk in the event of industry consolidations.
Finally, Saskatchewan is also opposed to the U.S. position that the current WTO and NAFTA litigation processes be terminated as part of this agreement.
"We believe our concerns are reasonable and, with political and industry commitment and goodwill on all sides, resolvable through further domestic and bilateral negotiation," Taylor said. "Saskatchewan remains committed to working with the Government of Canada, and with the governments and industries of the other affected provinces, to achieve an equitable and effective resolution of this dispute."
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For More Information, Contact:
| Anna Arneson Government Relations and Aboriginal Affairs Regina Phone: (306)787-8008 | Bob Ellis Industry and Resources Regina Phone: (306)787-8277 |