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Nova Scotia questions U.S. definition of what constitutes a subsidy

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HALIFAX The Nova Scotia government says a U.S. Commerce Department decision to continue imposing tariffs on a Cape Breton paper mill is based on an erroneous assumption about what constitutes a subsidy.

Provincial cabinet minister Andrew Younger says while it’s true Port Hawkesbury Paper is getting electricity at a reduced rate from Nova Scotia Power, that does not amount to a subsidy.

On Wednesday, U.S. authorities issued a decision saying Canadian mills that produce glossy paper products will continue to pay duties levelled against them last summer by the U.S. Commerce Department.

The department says 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.

Younger, speaking on behalf of Trade Minister Michel Samson, says the cheaper power rates from the privately owned utility don’t constitute a subsidy because, under U.S. rules, subsidies must come from government entities.

The environment minister also says the province is pleased the federal government is getting involved in the file, and he’s hoping Ottawa will launch a formal challenge through the World Trade Organization.

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