The Globe and Mail reports in its Wednesday edition that Ottawa has rejected an industry request for payouts to softwood producers in Canada on the hook for U.S. duties, fearing that direct intervention would further irritate the United States.
The Globe's Brent Jang writes that Canadian softwood producers have paid more than $10-billion since 2017 in accumulated U.S. duties, which are cash deposits held in trust by the U.S. that collect interest. The producers expect the U.S. to refund a portion of the duties if and when the trade dispute over Canadian softwood shipments is resolved.
Meantime, two unnamed sources say the industry has suggested that the Canadian government make payouts to reflect the present value of anticipated refunds.
Under this approach, Ottawa would have received any future refunds in return for injecting much-needed liquidity into the struggling industry.
However, Ottawa rejected the idea because of fears that such payouts would be viewed as subsidies and become a serious irritant during the wider U.S. trade war, according to a senior government official.
The official said Ottawa has carefully designed supports for Canada's lumber industry to remain compliant with international trade laws.
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