B.C. leader could drag Canada into unwanted battle with U.S. on softwood: expert

By on April 28, 2017


A vow by British Columbia's Liberal leader to fight American tariffs on softwood lumber may force the federal government to wage an unwanted battle with the United States, an international trade expert says.  (Photo: University of the Fraser Valley/Flickr)
A vow by British Columbia’s Liberal leader to fight American tariffs on softwood lumber may force the federal government to wage an unwanted battle with the United States, an international trade expert says. (Photo: University of the Fraser Valley/Flickr)

BURNABY, B.C. — A vow by British Columbia’s Liberal leader to fight American tariffs on softwood lumber may force the federal government to wage an unwanted battle with the United States, an international trade expert says.

Christy Clark asked Ottawa to ban thermal U.S. coal shipments passing through B.C. ports after the Americans imposed an average tariff of 20 per cent on Canadian softwood lumber this week.

Clark said Friday on the campaign trail for the May 9 provincial election that if the federal government, which has jurisdiction over ports, fails to stop American coal shipments going from B.C. to countries such as China, she would impose her own measures.

“We can put a levy so onerous on the movement of thermal coal from British Columbia that no one will do it,” she said in Burnaby.

However, Werner Antweiler, an associate professor who teaches international trade at the University of British Columbia’s Sauder School of Business, said Clark’s actions would violate North American Free Trade Agreement rules and “make things worse for the federal government” as it defends the province.

He said that as lead negotiator with the United States on a potential softwood lumber deal, Ottawa is in charge, not the provinces.

“If (the federal government) can’t control what the individual provinces do it diminishes their bargaining power,” Antweiler said.

“Talk is cheap,” he added of assertions by Clark, who said she expects Ottawa will act on her request to keep “filthy American coal” from reaching China in accordance with its climate-change agenda.

Antweiler said a forced dispute by Clark may also leave the federal government vulnerable to financial compensation, such as in previous cases involving other provinces.

Chapter 11, a controversial settlement clause in NAFTA, allows investors to sue foreign governments without first taking court action.

Canada has paid American companies millions of dollars in compensation, including $130 million in 2009 to pulp and paper firm AbitibiBowater Inc., a year after it closed its last mill in Newfoundland and Labrador, a province where it had operated mills since 1905.

The company launched a NAFTA claim after the province enacted legislation to return its timber and water rights to the Crown and expropriate some assets associated with water and hydroelectric rights.

Antweiler said Canadian companies have also been successful in suing American companies under the trade agreement that includes Mexico.

Clark has accused her main rival, NDP Leader John Horgan, of staying mostly silent on the contentious softwood lumber issue until this week when the United States imposed tariffs.

“First of all, it’s a federal responsibility,” Horgan said of Clark’s position on U.S. thermal coal in B.C. ports.

“Christy Clark wants us to think that she cares two weeks before an election,” he said in Victoria.

“She’s been leading the government of British Columbia and only now, when things looks like she is not going to have it her way, does she decide to make provocative statements.”

Horgan has said as premier, Clark should have gone to Washington to address the softwood lumber dispute after President Donald Trump took office, as did the premiers of Alberta and Saskatchewan on their various trade matters.