Canada to seek judicial review of latest U.S. decision on softwood lumber duties

The federal government 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 U.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 encouraging 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 per cent.

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.

Neither Commerce nor officials in Tai's office responded promptly to media queries Tuesday.

Canada has successfully argued at WTO in the past

"For years, the United States has imposed unfair, unjust and illegal duties on Canadian softwood lumber, hurting Canadian industry and increasing housing costs in both countries," Ng said in her statement.

"Canada is taking the necessary steps to actively defend the interests of our softwood lumber industry and the workers and communities that rely on it."

Canada 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 per cent, only slightly less than the 8.59 per cent 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.