The Government of Canada has a pot of money the province and Corner Brook Pulp and Paper can tap into for support, as new U.S. tariffs hit the company and the larger Canadian forestry sector.
At the start of June 2017, Natural Resources Minister Jim Carr announced $867 million in supports for softwood lumber producers and the communities put at risk of financial harm in the ongoing trade dispute with the United States.
With another dispute now started — and new, preliminary tariffs on uncoated groundwood paper products (including newsprint) — MP Gudie Hutchings stood in the House of Commons Thursday calling for the offers of financial support to extend beyond softwood lumber producers.
The pulp and paper mill in Corner Brook is in Hutchings’ riding. As reported, it is now trying to manage over 32 per cent in combined anti-dumping and countervailing duties that have come down in two separate decisions to date in 2018.
“This government is defending the interests of softwood lumber workers by providing nearly a billion dollars to support workers, communities, and companies,” she said, in a member’s statement in the House of Commons. “However, today I am calling on our government to do more to stand up for pulp and paper workers by extending supports to help this industry.”
She said the mill in Corner Brook supports middle-class jobs while playing a key role in the province’s entire forestry sector.
The Telegram followed up with the federal Department of Natural Resources, asking if anything similar to what’s on offer for softwood lumber producers is available to companies like Kruger Inc. and Corner Brook Pulp and Paper, if required.
“We have made available $867 million through the Softwood Lumber Action Plan to support forest workers across Canada. Many of these supports, including loans and loan guarantees, and market and product diversification funding, are available to companies affected by the uncoated groundwood duties,” read an emailed response to questions, credited to Laurel Munroe, the department’s director of communications.
The statement also said the federal government is ready to support the forestry sector and the jobs it supplies for Canadian families.
“We will always be here to support Canadian workers and will do everything in our power to defend them against unfair and unjustified duties that seek to undermine their prosperity,” it said.
In addition to offering dedicated loans and diversification funds to companies, the “softwood lumber action plan” includes $9.5 million over four years under Employment and Social Development Canada for a “work-sharing” program.
“This is not a wage subsidy program, but an existing program supplementing the income of Employment Insurance eligible workers who work temporarily reduced hours; it is a temporary measure to extend the maximum duration of work-sharing agreements from 38 to 76 weeks to reduce layoffs and retain skilled workers,” notes a description from government available online.
There is a separate piece for affected communities, with $80 million on offer over two years to the provinces affected by U.S. tariffs, with the support funneled through amended Labour Market Development Agreements. The feds suggest that money can be used to help transition workers to new jobs when they are in positions with suddenly reduced hours or cut altogether.
Next steps, future plans
The decision on the U.S. tariffs on softwood lumber has moved beyond the preliminary stages and the Government of Canada has already triggered the North American Free Trade Agreement’s (NAFTA) mechanism for trade dispute resolution, under Chapter 19.
According to a report from Reuters on March 16, Canada will be asking the World Trade Organization to establish a panel to adjudicate the softwood lumber dispute. A meeting on the matter is set before the end of the month.
For newsprint, the decision from the U.S. Department of Commerce is considered preliminary. If it is ultimately found by the U.S. that Canadian newsprint was unfairly subsidized and/or dumped into the market (there are two U.S. Commerce decisions now under review), a NAFTA challenge could follow.
The trouble is preliminary tariffs are already in effect. Kruger Inc. is expected to take a hit of an estimated $30 million in the next year, leaving the question of what might come next.
On Friday, Premier Dwight Ball was in Grand Falls-Windsor announcing the forestry sector as an area of focus for economic development in the next year, along with the mining and community sectors. As part of the event, the province announced a new partnership with the Newfoundland and Labrador Forest Industry Association, with plans to push diversification and up the amount of harvesting in the province.
“Recognizing that 90 per cent of our commercially available forest resource is allocated every year, yet less than 60 per cent is harvested, we have plenty of room to grow, as industry and government join together and work towards our ambitious goal to increase timber allocations and harvest levels by 20 per cent by 2020,” said association executive director Bill Dawson, in a statement.
The premier has said the provincial and federal governments stand ready to support Corner Brook Pulp and Paper, as a backbone of the provincial forest industry.
“Premier Ball has spoken with Minister Carr on this important matter and to relay the challenges that are being experienced by Kruger, and in particular Corner Brook Pulp and Paper,” read a statement from the premier’s office Thursday night, in response to questions on the funds available under the softwood lumber action plan. “These conversations will continue as we identify and explore all options to assist the company and the forestry industry.”
Government of Canada: Softwood Lumber Action Plan