U.S. Commerce Department affirms duties against Canadian coated paper products

By on October 14, 2015

The Herbert C. Hoover Building, the headquarters of the U.S. Department of Commerce (Wikipedia photo)
The Herbert C. Hoover Building, the headquarters of the U.S. Department of Commerce (Wikipedia photo)

HALIFAX – Canadian mills that produce glossy paper products will continue to pay costly duties levelled against them last summer by the U.S. Department of Commerce.

In a decision released Wednesday, the department said it has determined that U.S. imports of supercalendered paper from Canada have received countervailable subsidies ranging from 17.87 to 20.18 per cent.

The decision upholds, and in some cases increases the tariffs first put in place after a preliminary ruling in July.

The trade action is the result of a petition filed by two American producers of supercalendered paper that say the Canadian paper goods are unfairly subsidized.

Under the decision, Nova Scotia mill Port Hawkesbury Paper faces a 20.18 per cent duty, while Montreal-based Resolute Forest Products is hit with a duty of 17.87 per cent.

While the duty for Port Hawkesbury Paper remains about the same as in July, Resolute’s duty increased significantly from the two per cent levelled last summer. In Resolute’s case the U.S. department said the increase came, in part, after the company did not fully co-operate with its investigation.

Other Canadian supercalendered mills such as the J.D. Irving mill in New Brunswick and Catalyst Paper of British Columbia now face a duty of 18.85 per cent, an increase over the originally imposed rate of 11.19 per cent.

In a statement released Wednesday, Port Hawkesbury Paper said it plans to vigorously challenge a ruling it says is “unsupported by the facts or the law.”

The mill said it would appeal the decision and is in the process of exploring options, including through the U.S. courts, the World Trade Organization and the North American Free Trade Agreement.

“We are only part way through a long process and we are intent on proving that the imposition of duties is not supported by the facts or the law and is unfair to other Canadian mills in addition to ours,” said Marc Dube, the Nova Scotia mill’s business development manager.

Dube said the mill would focus on business as usual and would continue to make capital investments.

The federal government also expressed its disappointment through an emailed statement, saying it is concerned by an investigation that was not a “thorough and complete process.”

“Our government will appeal this decision and we will do everything we can to protect Canadian jobs,” said Max Moncaster, a spokesman in the office of the minister of international trade.

The Commerce Department said its International Trade Commission is scheduled to make a final decision on whether Canadian exports have materially injured or threaten to injure the U.S. domestic industry in early December.

Supercalendered paper is used to produce a variety of products including magazines, catalogues, corporate brochures and advertising inserts.