U.S. trade representative to investigate possible subsidies to Cape Breton mill
HALIFAX - The U.S. trade representative has started an inquiry under the North American Free Trade Agreement to determine if the Nova Scotia government has offered improper subsidies to a Cape Breton paper mill.
Ron Kirk says reports about the province's $124-million financial aid package for the Port Hawkesbury Paper mill have raised "troubling questions" about potential injury to American businesses.
Kirk also says in a letter to Maine congressman Mike Michaud that he will be seeking information from the Canadian government, saying the United States plans to raise the matter at meetings this month at the World Trade Organization.
The inquiry was called in response to a letter earlier this month from Michaud, who released Kirk's reply to him today.
The congressman says the Cape Breton deal, struck last month, could have a significant impact on U.S. paper mills and the small businesses they support.
Nova Scotia Premier Darrell Dexter says the province obtained legal advice regarding a potential NAFTA challenge before the deal was struck, and he argues that American paper mills have long benefited from government subsidies.