Canada May Accept Interim Tax On Softwood Exports

by Mike Godfrey, Tax-News.com, Washington

05 February 2003

Canadian Trade Minister, Pierre Pettigrew has hinted at the possibility that an export tax on Canadian softwood lumber could be imposed as a temporary solution to the country's trade dispute with the United States, although he admitted this week that the prospect is not one that he welcomes.

'I could be open to it,' he announced on Monday, prior to a two day visit to Washington to meet with US trade and commerce officials, but added that: 'It is not something I relish...If our industry and the provinces support it, that could be part of a resolution. But I am not suggesting it.'

The Canadian Press quoted Mr Pettigrew as observing, an export tax imposed by the Ottawan authorities would need to be a temporary measure 'with exit ramps clearly identified'.

Currently, the Canadian softwood industry labours under 27.2% import duties imposed by the United States. Although an export tax imposed in Canada might provide a suitable temporary solution to the long-running dispute, it has been criticised by opposition parties in Canada for weakening the country's position in its long-term struggle against the duties through NAFTA and the World Trade Organisation.

'He's certainly leaving a very unclear message and weakening our negotiating position,' Canadian Alliance MP, John Duncan told the CP.

Recommended