Prime Minister Justin Trudeau is pledging a co-ordinated offensive with the provinces to fight new U.S. duties against Canadian softwood lumber exports while opening the door to retaliation against American coal.
On Friday, Mr. Trudeau wrote B.C. Premier Christy Clark to assure her that he will stick up for Canada's forestry industry. He also said the federal government will be examining Ms. Clark's request that Ottawa ban exports of thermal coal from B.C. ports.
"We disagree strongly with the U.S. Department of Commerce's decision to impose an unfair and punitive duty on Canadian softwood lumber products. The accusations are without merit, as we have made clear to the U.S. administration," Mr. Trudeau said in the letter, which Ms. Clark made public. "I look forward to continuing to working with all Premiers, as we stand up for jobs, our industry, and to strengthen the Canada-U.S. relationship that is a model to the world."
In her April 26 letter to the Prime Minister, Ms. Clark linked her request for a ban on thermal-coal exports to the U.S. decision to slap duties of up to 24.12 per cent on Canadian lumber shipments south of the border.
Her request covers not only U.S. coal producers, but also asks Ottawa to halt thermal-coal exports that originate from Canadian mines. Coal Valley Resources Inc., owned by Colorado-based Westmoreland Coal Co., runs an Alberta coal mine 100 kilometres south of Edson.
Industry experts say Coal Valley's operation accounted for all of the 2.2 million tons of Alberta thermal coal exported last year through federally owned Ridley Terminals Inc. in the Port of Prince Rupert in northwestern British Columbia.
Last year, privately owned Westshore Terminals Investment Corp.'s facility south of Vancouver had almost 6.6 million tonnes of thermal coal exported to Asia. The bulk of that coal originated from mines in Montana, said Clark Williams-Derry, director of energy finance at the Sightline Institute, a Seattle-based environmental think tank.
Vancouver-based Teck Resources Ltd. uses the Westshore facility primarily to export steel-making metallurgical coal – a commodity that is not being targeted by Ms. Clark's BC Liberals.
Despite the BC Liberal Leader's request for a federal ban on all thermal coal exports from the West Coast, Alberta Premier Rachel Notley was given verbal assurances on Friday that her province's coal would not be targeted in such an action, said Cheryl Oates, Ms. Notley's spokeswoman.
The Prime Minister's Office "gave us a head's up that this letter was coming, and wanted us to know that Alberta coal would be exempt, and this would be aimed only at U.S. coal," Ms. Oates said.
Coal has been a hot-button issue in the province because of the Alberta NDP Premier's policies for combatting climate change, which includes phasing out coal-fired electricity by 2030.
Mr. Trudeau didn't mention Alberta thermal coal in his letter, but he told Ms. Clark that Ottawa is studying her request for an export ban.
"We share the commitment to fighting climate change and protecting our environment," the Prime Minister wrote. "The Government of Canada is considering this request carefully and seriously. I have asked federal trade officials to further examine the request to inform our Government's next steps."
The BC Liberals, if re-elected, promise to slap a hefty $70-a-ton carbon levy on exports of thermal coal from B.C. ports, if Ottawa doesn't take action with a federal ban. Ms. Clark released a statement on Friday as she campaigned for the May 9 provincial election in a close race against the BC NDP led by John Horgan. Ms. Clark said she is pleased that Ottawa is reviewing both the softwood dispute and the proposed ban on thermal coal.
"Prime Minister Trudeau and I share a commitment to securing a new, long-lasting softwood agreement that protects jobs and workers in B.C.," Ms. Clark said. "We also share a desire to reduce global reliance on dirty thermal coal as a source of electricity. Banning thermal coal exports through B.C. ports stands up for forest workers and helps fight climate change."
With a report from Jeffrey Jones in Calgary