Canada to Seek Judicial Review of Latest US Decision on Softwood Lumber Duties

Trade Minister Mary Ng, shown on June 15, 2023 file photo, says Canada plans a judicial review of last month’s Treasury Department assessment of the levies, which she calls unfair, unjust and illegal. The Canadian Press/Lars Hagberg

The federal government in Ottawa is pushing back against the latest U.S. decision to keep imposing duties on Canadian softwood lumber.

Canada has filed for a judicial review of last month’s Commerce Department assessment of the levies, which International Trade Minister Mary Ng described in a statement as “unfair, unjust and illegal.”

Ng framed the move as an effort to escalate the concerns of exporters while adding an impetus on the U.S. to consider a negotiated solution to a dispute that has plagued Canada-U.S. relations for decades.

“We have to continue to explore new ways (to resolve it), because the industry expects us, expects me and expects my government to—(and) so do their workers,” she said Tuesday during a cabinet retreat in Charlottetown.

“It would be much, much more preferable that we get to the negotiating table, and let’s come together and let’s have a deal. But in the meantime, we’re going to use all the tools at our disposal to stand up for the industry.”

The latest administrative review by the U.S. Commerce Department resulted in a modest decrease in the so-called “all others” combined duty rate, but kept it in place at 7.99 percent.

In Canada, lumber-producing provinces set so-called stumpage fees for timber harvested from Crown land, a system that U.S. producers—forced to pay market rates—say amounts to an unfair subsidy.

It’s not the first time Ng has pushed her U.S. counterparts to help hammer out a solution. But U.S. Trade Representative Katherine Tai has said negotiations can only happen once Canada does away with its stumpage fee regime.

“We continue to share with the Canadians that we are committed to the robust enforcement of U.S. trade remedy laws,” Tai’s office said in a statement.

Pushing back against “unfairly traded Canadian imports” remains a priority for the Biden administration, it added.

“We are prepared to discuss another softwood lumber agreement when Canada is ready to address the underlying issues related to subsidization and fair competition so that Canadian lumber imports do not injure the U.S. industry.”

Canada, meanwhile, has successfully argued at World Trade Organization dispute panels in the past that its stumpage-fee system is not a subsidy, which is exactly why the government feels it remains in the right, Ng said.

“I mean, it has ruled exactly that conclusion to Canada, which is why it’s so important that Canada continues to defend our interests against these tariffs.”

The Commerce Department’s fourth administrative review of the duties, announced last month, established a combined rate of 7.99 percent, only slightly less than the 8.59 percent established after its previous review.

That decision was cheered by U.S. lumber producers, who say the duties keep the playing field level south of the border and allow the domestic forestry and construction industries to thrive.

Such enforcement “is exactly what must happen for enduring expansion of U.S. lumber manufacturing and availability to meet demand to build more American homes,” said Andrew Miller, chairman of the U.S. Lumber Coalition.

“Failure to fully enforce the trade laws would only undermine long-term confidence in expanding U.S. sawmilling capacity and jobs in the American softwood lumber industry.”

The U.S. industry “remains open” to a new agreement on softwood lumber, but Canadian producers have yet to agree on a “unified position” that would allow the two governments to negotiate one, the coalition says.