While the Canadian forestry industry braces for a second wave of U.S. duties expected to hit any time now, the Commerce Department announced today that it has made a preliminary decision to exclude three of the country’s Atlantic provinces from its investigation into whether Canada is dumping or subsidizing exports of softwood lumber.
The decision to exclude Newfoundland and Labrador, Nova Scotia and Prince Edward Island came at the request of U.S industry and the Canadian provinces and had the backing of the U.S. lumber industry, according to a statement by Commerce Secretary Wilbur Ross.
“I am pleased to announce that my staff has determined the exclusion of these products is appropriate,” said Ross. “The U.S. petitioners and other parties support this determination; it of course will be subject to further comment on the record. A final decision on the matter is expected by late summer."
Most of the wood in Atlantic Canada is harvested from private land, and the provincial governments and local producers had argued that they operate under a largely “free-market” model. “The U.S. industry has indicated that it has faith in the certification process and is not being injured by these products,” the Commerce statement said.
It should be noted that the exclusion accounts for just roughly one percent of Canada’s softwood lumber exports and does not include New Brunswick, the biggest producer in the region and home to targeted company J.D. Irving Ltd. Furthermore, as this is a preliminary decision, for now, U.S. Customs will continue to collect countervailing duty cash deposits on imports of lumber from the three excluded provinces.
A final determination is scheduled to be made in September. Should Commerce make a final decision to exclude from the AD and CVD investigations lumber certified to be produced in the Atlantic Provinces (from logs harvested from those provinces), it will cease the collection of cash deposits and instruct Customs to refund all the money collected.