OTTAWA — The federal government has made a $950-million initial distribution of close to $5-billion in refunds to Canadian lumber producers hurt by U.S. duties, although no money is expected from Washington for two years.
The refunds follow the Oct. 12 enactment of the Canada-U.S. softwood lumber agreement.
Ottawa designated Export Development Canada to run an accelerated refund mechanism, under which the Crown corporation buys the rights to the duty deposits and interest owed to Canadian companies.
This eliminates their wait for U.S. Customs to process refunds, which Ottawa says will take up to two years.
EDC's costs are covered by Canadian taxpayers.
Under the Canada-U.S. agreement, Washington is to refund about 80 per cent of the estimated $4.4-billion (U.S.) it has collected since May 2002 on behalf of U.S. lumber producers who accused Canada of unfair trade.
“We are pleased to have received these monies in a timely manner,” commented James Lopez, president and CEO of Tembec Inc., which confirmed Monday it received $242-million from EDC.
This amount — substantially all the refund Tembec expects — will “allow us to put even greater focus on the key operational and financial issues that will continue to drive the company's recovery plan,” said Mr. Lopez, whose company announced Oct. 3 it would indefinitely close three sawmills in Quebec, idling 435 workers, because of lower demand and rising costs.
