Christy Clark at odds with Ottawa on approach to lumber dispute

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Canada is looking to settle the softwood-lumber dispute with the United States "peacefully, through negotiations," a federal minister says, taking a measured tone in contrast to the combative position of campaigning Liberal Leader Christy Clark, who has promised to retaliate by banning or taxing thermal coal moving through B.C. ports.

A negotiated settlement "is the only way that we can in the long term come to terms with this repeating irritant, that is as a result of the United States repeatedly imposing punitive, and we believe unfair, tariffs against the Canadian industry," Natural Resources Minister Jim Carr told a Commons committee on Thursday.

Mr. Carr is leading a federal-provincial group co-ordinating a response to the softwood duties, while Foreign Affairs Minister Chrystia Freeland is negotiating with the U.S. administration.

Most of the thermal coal that passes through B.C. ports is from the United States, though some does come from Alberta. Ms. Clark has said she believes stopping thermal-coal exports is the right thing to do, but she's made it clear the timing of her request is in direct response to the softwood dispute.

Ms. Clark defended her strategy while campaigning on Thursday and played down Alberta Premier Rachel Notley's suggestion that B.C. may lack the legal authority to impose a levy on thermal coal.

"We have been working on this for several months," Ms. Clark told a news conference in Vancouver.

"I am sure the people who are desperate to move dirty coal around the world will fight tooth and nail to make sure they get the chance to continue to do that. I am equally determined to make sure that they don't," Ms. Clark added.

The different approaches of the B.C. and federal governments to the softwood-lumber file are playing out days before a provincial election in B.C., where coal has emerged as a last-minute policy concern and a potential irritant between B.C. and Alberta.

The two provinces have previously sparred over B.C.'s demand for a "fair share" of benefits from the Kinder Morgan Trans Mountain expansion project. Ms. Clark's Liberal government approved the project in January, winning praise from Ms. Notley, who has championed the pipeline.

Now, thermal coal – including some that is mined in Alberta and shipped through B.C. ports – could become another source of tension.

In announcing her desire to stop thermal coal moving through B.C. ports, Ms. Clark has focused primarily on U.S.-mined coal shipped through Westshore Terminals, a coal-transport facility south of Vancouver.

But B.C. thermal-coal shipments also include coal mined in Alberta and shipped through Ridley Terminals in the Port of Prince Rupert, about 800 kilometres northwest of Vancouver.

Ridley handled 2.2 million tonnes of thermal coal in 2016, accounting for 55 per cent of its total volume, with most of that coming from Alberta.

Ms. Notley on Wednesday said she was "of course" against the proposed tax and questioned whether Ms. Clark even had the authority to impose it.

"I don't know that the particular idea will get very far, because I'm not convinced that the authority actually exists within the provincial government," Ms. Notley said.

Alberta relies on coal for about 50 per cent of its electricity and has announced a plan to phase out coal-fired electricity by 2030.

Ms. Notley spoke at a news conference to mark the one-year anniversary of wildfires in Fort McMurray.

Asked about the potential impacts of a coal tax on jobs and the economy in Prince Rupert, Ms. Clark cited potential LNG projects, a propane plant under development and B.C.-mined metallurgical coal. (It is used primarily for making steel.)

"When space is freed up from thermal coal, that space can be used by our metallurgical coal workers here, creating more jobs and more royalties for British Columbians and help us fight climate change around the world," Ms. Clark said.

In Ottawa, Mr. Carr said the federal government is examining a number of measures to help Canadian forestry workers, companies and communities that will be hurt by the U.S. tariffs, but he said the extent of the damage won't be known until June, when anti-dumping measures are announced.

Among possible relief measures would be loan guarantees for companies who see their revenues impacted by the need to pay retroactive duties, and payment of their legal fees.

"The most important value is to protect workers who will be affected by layoffs," he said.

Over the longer term, the industry must wean itself off dependence on U.S. home builders, he added: by diversifying its export markets to China, Southeast Asia and Latin America; by expanding its own use of wood waste for byproducts and fuel; and by continuing to pioneer the use of wood in high-rise structures.