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Feds offer millions in softwood aid

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OTTAWA—Natural Resources Minister Jim Carr has announced $867 million in financial support to help lumber producers and employees weather the impact of punishing new U.S. tariffs on Canadian softwood exports.

The package announced yesterday includes $605 million in loans and loan guarantees to help cushion the blow for forestry companies, and to help them explore new markets and innovations.

There also is $260 million over the next three years to expand existing programs to help diversify the market base for lumber products, allow the indigenous forestry sector to explore new initiatives, and extend work-sharing agreement limits to minimize layoffs.

Carr said the package isn't just about responding to the U.S. tariffs but to position Canada's industry for the future.

“Our government recognizes the importance of finding new markets for our forest products,” he said at a news conference, where he was flanked by Foreign Affairs minister Chrystia Freeland and International Trade minister Francois-Philippe Champagne.

“By diversifying into a variety of markets, we will be less vulnerable to actions from any one market,” Carr noted.

“And today we stand with softwood companies, their employees, and their communities to support good jobs to create new opportunities and ensure sustainable prosperity for generations to come.”

The loans and loan guarantees come from the Export Development Bank of Canada and the Business Development Bank of Canada to help with things such as building up inventory or improve operational efficiencies.

The package also includes $80 million to support workers who want to upgrade skills and move to a different industry, and almost $10 million to extend an EI work-sharing program which subsidizes the wages of eligible workers who go on reduced hours in order to prevent layoffs.

Another $10 million over three years is available for the Indigenous Forestry Initiative to encourage participation in the forest sector.

Back on April 28, the U.S. Department of Commerce imposed countervailing import duties as high as 24 percent on Canadian softwood, arguing Canada unfairly subsidizes its industry by keeping the cost of logging artificially low.

The rates likely are to go up after June 9, when the U.S. will decide whether to also impose anti-dumping duties on top of the countervailing ones.

The federal support package was well-received by the Canadian industry.

“I think that the message sent by the Canadian forestry industry was heard by the federal government,” said Karl Blackburn, a spokesman for Quebec-based Resolute Forest Products.

"It's a good step in the right direction.

“The Canadian government is sending a strong message to the Americans, who unfortunately use their laws and regulations in an abusive way against the Canadian forestry industry,” he added.

Naomi Christensen, a lumber policy analyst with the Canada West Foundation, said the focus on diversification is key.

“I think that's going to be the biggest benefit in the long run for the sector,” she remarked.

Carr said the package defends the industry against the “unfair and unwarranted” duties.

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