US Softwood Lumber Dispute
The continuing softwood lumber dispute between Canada and the US has caused problems for the BC economy. The forestry industry is one of the province's largest employers and revenue bases. Since the duties have been applied, thousand of forestry workers have lost full-time employment and forestry companies have paid millions in duties.
The dispute arose in 2001, when the US accused Canada of unfairly subsidizing its softwood lumber industry through its provincial stumpage fee systems. The US placed a preliminary 19 percent duty on Canadian softwood, later increasing the penalty to an average of 27 percent. On July 26, 2002, the World Trade Organization held that the US incorrectly imposed the original 19 percent duty. However, the US appealed the decision and continued to impose its duty.
Negotiations between the US and Canada recently broke down. Canada had agreed to a temporary export tax to replace the 27 percent duty. However, the sides failed to come to agreement on the amount of export tax and the whether the US will return the $1 billion in duties collected from Canadian lumber companies.
Since the original World Trade Organization ruling, several events have taken place:
Rules on Canadian Softwood Lumber (Aug 2002)