Ontario urges Ottawa to set up loan guarantees for softwood producers

OTTAWA – Ontario has joined Quebec in urging the federal government to set up a loan guarantee program for Canada’s softwood lumber producers who face the threat of tariffs and restrictions on exports to the U.S.

Provincial Forestry Minister Kathryn McGarry has sent a letter to federal Natural Resources Minister Jim Carr, saying it’s likely softwood producers will be paying “unreasonably high duties” by May.

In December, the U.S. government announced it’s launching investigations to determine whether softwood lumber imports from Canada were being dumped into the country and harmed the American forestry sector.

Concerns about layoffs in the forestry sector, an important economic driver in Quebec, prompted Premier Philippe Couillard to commit to providing loan guarantees to help producers pay duties if Ottawa doesn’t.

McGarry says Canadian softwood producers were forced to pay about $5 billion worth of duties during the last round of trade negotiations with the U.S., prior to an agreement in 2006.

A spokeswoman for Natural Resources Canada says the federal government is committed to negotiating an agreement that defends the interests of Canada’s softwood industry, including through litigation under NAFTA and the WTO, if needed.