On April 1, 2001 the Canada/U.S. Softwood Lumber Agreement expired. In the absence of the Agreement, Canadian lumber companies are now permitted to ship their softwood products to the United States duty- free. In response to what is seen as an unfair competitive advantage, the U.S. lumber industry has filed a suit requesting that the U.S. Government impose countervailing duties on Canadian softwood lumber products.
The American Side
The American lumber industry claims that Canada's low environmental standards (e.g., lack of a federal Endangered Species Act), long-term monopolistic tenure agreements, and low stumpage fees for public timber have made it nearly impossible for them to compete with the flood of cheap Canadian wood into the U.S. market.
The Canadian Side
The Canadian industrial lobby, which includes the federal and provincial governments, is calling for the free trade of softwood lumber and denies that the Canadian forest industry is unfairly subsidized. They also claim that Canadian forest management practices are sustainable and therefore cannot be seen as offering a competitive advantage. While the forest industry has tried to maintain a common front, the western provinces have pushed Canada for a renegotiation of the Softwood Lumber Agreement. However, Quebec is pressuring Canada to challenge the subsidy allegations at the U.S. Department of Commerce.
The Aboriginal Side
For the past two years both the Grand Council of the Crees (Eeyou Istchee) and the B.C. Interior Alliance have been actively lobbying members of the U.S. Government on the softwood lumber issue. Their position has been that provincial governments have granted illegal economic benefits to the lumber industry via their failure to recognize treaty rights, in the case of the Grand Council, or Aboriginal title rights, in the case of the B.C. Interior Alliance.
In May both groups teamed up with the Natural Resource Defense Council (NRDC) and filed a submission with the U.S. Department of Commerce in support of the U.S. industry's petition for countervailing duties to be placed on Canadian softwood lumber imports. The purpose of Grand Council, Interior Alliance and NRDC's joint submission was to supply additional subsidy information that was not included in the U.S. industry's petition and to request that the Department of Commerce investigate these subsidies and apply the appropriate countervailing duties.
On June 15, 2001, the Nishnawbe Aski Nation filed a support letter with the Department of Commerce outlining similar illegal subsidization that is occurring in Ontario's lumber industry.
On June 18, 2001, an American law firm acting on behalf of the Governments of Canada and the provinces and the Canadian forest industry filed a response to the First Nation's submission with the Department of Commerce. Their response, largely, tried to convince the U.S. Department of Commerce that Canadian First Nations have no legal standing within the Department's procedures and that Canadian treaty and title issues were a matter for the Canadian Courts.
On July 4, 2001 the Grand Council, B.C. Interior Alliance and the NRDC responded to Canada's comments in a letter to the Department of Commerce.
The U.S. Department of Commerce was originally supposed to make an initial ruling on the U.S. industry and the First Nations allegations of subsidies on June 27. This decision has been delayed until July 27, 2001. If the First Nations subsidy claims are initially accepted, the Department of Commerce will then conduct a formal investigation to determine if there are subsidies and if countervailing duties should be applied.
For the Nishnawbe Aski Nation see: