U.S. lumber group takes issue with subsidy plan

The U.S. Coalition for Fair Lumber Imports, which describes itself as an “alliance of sawmill employees and woodland owners united in opposition to Canada's trade practice related to lumber exports,” has announced opposition to a Canadian government plan to subsidize some forestry companies.

The group claims Canadian authorities may use the subsidy plan, announced Jan. 10, to aid the Canadian forestry industry in violation of the U.S.-Canada Softwood Lumber Agreement. The agreement came into effect Oct. 12, 2006, and specifically prohibits new government subsidies to the Canadian lumber industry, the group said.

The subsidy plan is part of an approximately $1 billion government proposal, which will be earmarked to provide relief to the forestry sector during the current difficult market conditions, but will also help fishing and manufacturing companies.

"Lumber industries on both sides of the border are going through difficult circumstances, but now is not the time for the Canadian government to step in with new subsidy [plans] to give its industry unfair advantages in the U.S. market," said Steve Swanson, chairman of the Coalition for Fair Lumber Imports.

Canadian Prime Minister Stephen Harper said the plan is not intended as a sweeping aid package for forestry companies, but for “one-industry” towns facing major layoffs or chronic high unemployment.

The coalition plans to launch a review of the new program outline released last week, according to a press release.