By: CBC News
The Minister of Natural Resources and Forestry in Ontario is looking to her federal counterpart for help with the current uncertainty in the softwood lumber industry.
Last week Kathryn McGarry wrote a letter to federal Natural Resources Minister Jim Carr asking for the creation of a temporary loan program to help forestry companies.
It’s likely these softwood producers will be paying higher import duties at the American border starting this May.
Canadian lumber producers paid $5 billion in duties
The dispute over the softwood lumber industry has caused one of the largest disputes between Canada and the US, with years of legal proceedings.
The most recent trade deal expired in 2015.
In 2016 the US government launched an investigation into whether softwood lumber imports from Canada are being sold for less than fair value.
During the last round of trade negotiations between the two countries, Canadian softwood producers were forced to pay about $5 billion in duties.
McGarry says the Ontario forestry industry is worth $15.5 billion in revenue to the province, and supports 172,000 direct and indirect jobs across Ontario.
“It’s why I’ve asked the federal government to step up and do their part to help Ontario’s forestry sector if the US imposes import duties.”
Loan program would act as ‘safety net’ for Canadian producers
McGarry says a federal loan program would be a safety net for Canadian producers, while the dispute works its way through the appeals court.
“Companies could eventually run out of the working capitol that they need for day-to-day operations and will look to borrow,” says McGarry, adding that traditional lenders, such as banks may be concerned about the risk of default.
She says a loan guarantee program would assist the industry and allow companies to use the duties to secure these loans, and be guaranteed market rates.
Specific numbers have not been worked out for the loan program. McGarry says that’s because she only just asked the federal government for help. Other provinces have put in similar requests.
McGarry calls the economies for both Canada and US interdependent and she says she is confident the two countries will enjoy a good relationship and strong economies in the future.
“Both countries really benefit from a strong, balanced economic relationship.”
By: CBC News