Contrary to its obligations under the Softwood Lumber Agreement, Canada has announced, and has started disbursing to its industry, new subsidies worth hundreds of millions of dollars annually, and over a billion dollars over a five year period.
New Subsidies Include:
Quebec Forest Sector Plan and Tax Subsidies -- Approx. C$700 MillionBusiness modernization subsidies.Road building subsidies. Capital investment tax subsidies.
Ontario Subsidy Programs -- Approx. C$700 Million
Forest Sector Prosperity Fund (FSPF). Forest Sector Loan Guarantee Program (FSLGP). Forest road construction subsidies.
The Coalition supports the decision United States took to initiate arbitration proceedings under the Agreement about these new subsides and other SLA compliance issues. A London Court of International Arbitration tribunal held a hearing in Ottawa in July 2009. On January 21, 2011, an LCIA tribunal issued a ruling that subsidies provided by the Ontario and Quebec governments to lumber manufacturers in their provinces violate the terms of the SLA. The Office of the U.S. Trade Representative stated that, according to the terms of the Tribunal award, Canada must implement a cure for this breach within 30 days or impose additional export taxes for the duration of the SLA. It is anticipated that these additional export taxes will amount to U.S. $59.4 million.
The Coalition routinely monitors and submitts comments to the U.S. Department of Commerce in response to the Department's request for input on subsidy programs provided by countries exporting softwood lumber and softwood lumber products to the United States.
The Secretary of Commerce submits a report to Congress every 180 days on any subsidy provided by countries exporting softwood lumber or softwood lumber products to the United States, including stumpage subsidies.
A copy of the Coalition's most recent comments can be accessed here