Millions added to U.S. duties on Canadian softwood

Canadians face paying hundreds of millions of dollars more than expected in softwood duties to Americans in the cross-border lumber dispute after a decision from Washington Tuesday on how the penalty will be applied. The U.S. Commerce Department on Tuesday instructed American customs officials to collect a prescribed 19.3% duty on Canadian exports at the border rather than at the mill source, says Canadian trade officials. This move effectively boosts the total value of duties collected, because as much as 10 per cent of Canada's softwood exports to the United States is value-added wood that has been further sawed to make everything from framing lumber to housing siding, flooring or picket fenceposts. Canada exports about $1-billion of value-added softwood to the United States each year.

That's part of an overall annual export total of more than $10-billion in softwood shipments south. Players in Canada's lumber remanufacturing sector predicted the U.S. duty move would have a crushing effect on their 40,000-employee industry and could cost jobs. Bob Murphy is the Alberta representative for the Canadian Lumber Remanufacturers' Alliance with Palliser Lumber Sales Ltd. in Crossfield, Alta. He said the effect of the move will be to more than double the amount of duty paid on value-added lumber, compared with what the penalty would have been when the product was still raw lumber. Sébastien Théberge, spokesman for federal Trade Minister Pierre Pettigrew, called the U.S. duty move part of the "U.S. strategy to try and divide us." Last month, the United States slapped a preliminary 19.3-per-cent duty on Canadian softwood lumber, alleging that the wood is unfairly subsidized.