Nova Scotia closer to escaping punishing softwood lumber duties

The American lumber lobby has decided to exempt Nova Scotia from its list of targets for softwood lumber duties but the province isn't out of the woods yet, provincial Trade Minister Michel Samson said Monday.

"While the U.S. Lumber Coalition's recent decision to amend their petition to maintain the exclusion for Nova Scotia was welcome news, it is not clear how Atlantic Canada will be treated in the decision from Commerce tomorrow," Samson said in an emailed response to CBC News.

"We are hopeful that the coalition's recommendation will be accepted."

The U.S. Department of Commerce is expected announce Tuesday it will levy countervailing duties on Canadian softwood lumber.

Producers south of the border have argued that Canadian wood is subsidized because it comes from Crown land, while Canada contends its pricing is not artificially low and timber auctions are designed to reflect market rates.

Why Nova Scotia has been exempted

For decades, the Maritime provinces have been exempted from American duties on imported Canadian lumber because the industry in the United States was satisfied the lumber was not subsidized.

Atlantic Canadian governments say most woodlands in the region are privately owned and the rate charged for trees harvested on government land — what is known as Crown stumpage — is market based.

That argument prevailed during many softwood lumber disputes but the latest agreement has expired and in this round things have changed.

In the past, negotiations for the exemption were handled by the industry-led Maritime Lumber Bureau but now the provincial governments have taken charge.

New Brunswick may not escape tariff

Still, three of the four Atlantic provinces appear be out of the line of fire in the U.S. lumber tariff offensive.

In December 2016, the U.S. Commerce Department omitted the provinces of Nova Scotia, Prince Edward Island, and Newfoundland and Labrador from its lengthy list of federal and provincial governments allegedly subsidizing the lumber industry.

New Brunswick was the regional exception, with the department pointing to that province's provision of stumpage rates, silviculture and licence management fees as government subsidies and potentially subject to tariffs.