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Harper wins support of provinces for lumber deal

[PoliticsWatch Updated 5:35 p.m. April 27, 2006]

OTTAWA  —  Canada's three largest lumber producing provinces have agreed to support a softwood lumber deal reached with the U.S. this week, Prime Minister Stephen Harper announced in the House of Commons Thursday.  
  
"I'm happy to announce that British Columbia, Quebec and Ontario, the provinces that represent the vast majority of the softwood lumber industry have given us their support." Harper said in a speech to the House of Commons shortly after 5 p.m.

The deal had been confirmed by Washington earlier in the day and blasted in newspapers stories by members of the Canadian lumber industry. 

"I'm delighted to announce to you that we have reached an agreement," Harper said. "An agreement that will finally put an end to this conflict."

The PM said the U.S. accepted Canada's "key conditions," but the deal will still see the U.S. keep $1 billion of the $5 billion in duties it has collected over the past four years..

"This is what Canada wanted, this is what Canada got. This, colleagues, is a good deal, for all of us."

Harper's ability to gain the support of the three provincial governments is the first of a major hurdle. 

All three opposition party leaders slammed the softwood lumber agreement reached between U.S. and Canadian negotiators in Washington during question period on Thursday.  

"That is a sellout," charged NDP Leader Jack Layton in question period. " New export charges are a sellout. New quotas are a sellout."

Bloc Quebecois Leader Gilles Duceppe accused the government of capitulating to the U.S. administration. 

"This government is focusing solely on the interests of the U.S. That's the reality, Mr. Speaker," he said. 

After question period Layton again raised the possibility of putting an export tax on energy to recover the $5 billion in duties collected by the U.S. 

A copy of the deal obtained by PoliticsWatch puts in place both a quota system of 34 per cent of the U.S. market and an export tax based on lumber prices. 

The deal also gives back Canadian companies 80 per cent of the estimated $5 billion in duties it has paid since 2002. 

It includes an exemption for Atlantic Canadian provinces and a limited export charge on remanufacturered lumber products. And it proposes the creation of a binding dispute resolution mechanism that will be made up of "non-North American commercial arbitrators."

The deal is meeting resistance from producers outside of British Columbia because it is basing its reference period for provincial market share on 2005 levels. 

B.C.'s share of the quota based on its recent surge in export volumes to the U.S. Over the last year of the dispute, British Columbia has seen its share of Canada's lumber exports increase to 58 per cent from around 50 per cent. Quebec's share of Canada's exports over the dispute period has dropped from around 23 per cent to below 19 per cent. 

Liberal trade critic Dominic Leblanc said the Conservatives appear willing to sell out Canadian lumber companies, provinces and communities to appease the White House. 

"The government will simply cut a deal because it will make for a better barbecue at (President Bush's) ranch in Texas," he said. 

NDP trade critic Peter Julian said he believes the Tories are rushing to reach a deal with the U.S. just to "rehabilitate David Emerson's image."

He said one softwood executive he spoke to Thursday told him it was the worst lumber deal he had seen in 25 years. 

: Related Links

> No softwood deal- Emerson

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