Jan 28, 2005. /Lesprom Network/. The Department of Commerce (DOC) dramatically lowered its subsidy margin on Tuesday, January 25, 2005 in response to an earlier NAFTA panel ruling that had found the DOC methodology for calculating alleged timber subsidies in Canada flawed in multiple respects. For British Columbia, the DOC finally complied with the Panel’s prior rulings and found no subsidy at all, the only conclusion the evidence and law permitted. For Canada overall, the DOC found a mere 1.8% subsidy, or less then 10% of the subsidy it originally found in May of 2002 based on illegal U.S. benchmarks. For British Columbia, the new rate is 0.0%. In this particular phase of the litigation a finding of less than 1% for all of Canada would result in the subsidy order being rescinded. However, since British Columbia must pay the all-Canada rate, the duty order remains in place. “In May of 2002, the DOC said BC’s rate was 15% using an illegal US benchmark, in December the DOC said BC’s rate was 23%, again using an illegal U.S. benchmark. Finally, when they are forced to use a legal benchmark, they now say BC’s rate is 0.0% which we have maintained all along – that British Columbia timber is not subsidized,” said John Allan, president of the BC Lumber Trade Council. “What this means is that when the DOC is left unattended, new methodologies and rates are simply made up on an ongoing basis,” said Allan. “But when a NAFTA panel is looking over the DOC’s shoulder, then subsidy is impossible to prove.” “Regardless of the latest mathematical maneuverings, I am confident we will get the margin for all of Canada down to less than 1% upon further review by the NAFTA Panel,” Allan said. “The allegations of subsidy have been bogus from day one and this just underlines the erroneous and arbitrary nature of the US case.”