Ontario following B.C. over deal for softwood

VANCOUVER, OTTAWA -- Support appeared to be building yesterday for a controversial deal to end the Canada-U.S. softwood lumber dispute.

After talking with forest industry executives in the province, Ontario Natural Resources Minister David Ramsay said he is optimistic that most forestry producers involved in the long-running trade wrangle will agree to support the proposed softwood agreement, which would see the United States retain $1-billion (U.S.) of the $5-billion in punitive tariffs it collected on Canadian softwood imports since May, 2002.

"I feel that a lot of our companies begrudgingly support this," Mr. Ramsay in an interview yesterday. Ontario timber producers are facing challenging times, he said, adding that most are keen to retrieve 80 per cent of the punitive trade duties they have been paying on U.S.-bound lumber shipments.

Similar challenges confront members of the Quebec Forest Industry Council, who are set to meet in Quebec City today to discuss the softwood deal.

Ontario's assessment comes as the clock ticks down to a deadline set by International Trade Minister David Emerson.

The minister wants to know by Monday if there is enough industry backing to take the deal to Parliament for a vote.

The draft agreement got a boost on Wednesday when B.C. Premier Gordon Campbell said improvements made to a framework deal reached in April were sufficient to draw the province's support. His endorsement is seen as critical because B.C. accounts for more than 50 per cent of Canada's softwood shipments to the United States. By comparison, Ontario accounts for roughly 10 per cent.

"We wanted to let our industry know where we stand,'' said B.C. Forests Minister Rich Coleman, who estimated that more than 90 per cent of the lumber producers in B.C. are now behind the deal.

With time running out, however, it's still unclear what threshold of support will be required across the country to let Mr. Emerson proceed with the deal.

Still facing opposition from some lumber companies, Mr. Emerson is no longer requiring that producers representing 95 per cent of the duties owed to Canada back the accord, Bloomberg News reported yesterday. Instead, he's seeking only "substantial" support.

"Whatever percentage of industry buys into it, they'll call it a deal," Bill Reedy, president of Gorman Bros. Ltd., a Westbank, B.C.-based wood boards maker, told Bloomberg.

Ontario Lumber Manufacturers Association president David Milton said yesterday that many of his members could well be influenced by B.C.'s apparent support for the Canada-U.S. softwood deal. "That may change the view of some of those in the east," he said in an interview.

The proposed agreement, reached July 1, would replace punitive U.S. timber duties with a Canadian-collected export tax and shipment restrictions.

On paper, the industry has a veto because the deal can't go through unless Canadian companies involved in softwood-related litigation against the United States drop their suits.

However, B.C.'s Mr. Coleman expects Mr. Emerson to weigh the level of support for the deal on Monday, then make a decision on whether to take it to Parliament. He would deal with outstanding litigation later.

Robert Klager, Mr. Emerson's spokesman, has refused to describe the process for tallying the industry's reaction, in particular whether the views of softwood exporters will be weighted evenly, or whether they'll be weighted by export volumes.

"I can tell you that the government remains in close consultation with forestry companies regarding the important decision now before them," Mr. Klager wrote in an e-mail when asked for details about the proceed.