Catalyst Paper, which owns three pulp and paper mills on Vancouver Island, is disappointed with American tariffs on its products announced on Aug. 2.
The U.S. Department of Commerce’s final determination sets Catalyst’s countervailing duty rate at 3.38 per cent, and anti-dumping duty rate at 16.88 per cent on its exports of uncoated groundwood paper to the U.S., along with other Canadian producers.
While the duties were reduced from the preliminary rates, the combined duties on Catalyst’s exports total a significant 20.26 per cent.
The U.S. Department of Commerce’s final determination follows its announcement on Jan. 9 that required Catalyst to pay a 6.09 per cent countervailing duty deposit, and its decision on March 14 to impose a 22.16 per cent anti-dumping duty deposit.
“While not surprised, we’re disappointed with the U.S. Department of Commerce’s decision to keep these unwarranted duties in place, albeit at a lower rate,” says Ned Dwyer, Catalyst’s president and CEO.
“These duties are punitive and without merit. The allegation that we are subsidized and engage in dumping activities is wrong and does not adhere to the facts.”
Dwyer said the U.S. trade action directly affects the competitiveness of Catalyst, which sells much of its products to American markets.
“While our mills have provided newsprint to the U.S. for more than 100 years, we’re now changing our customer base to minimize the impact of these duties because of one U.S. mill, but this isn’t sustainable over the long-term,” he said.
Fearing the impacts of the tariffs on Catalyst’s operations, the province decided to act last month to ensure the company’s pension plans are protected.
Following the decision by the U.S. Department of Commerce, the U.S. International Trade Commission will consider whether imports of uncoated groundwood paper from Canada have injured the U.S. industry, as was alleged in the petition by only one mill, North Pacific Paper Company, located in Longview, Washington.
If the ITC reaches an affirmative determination at the end of August, the DOC is expected to issue a final order on the case in mid- September.
“We would like to see the ITC pursue an objective evaluation of the facts and eliminate these egregious duties before they do further harm to our U.S. customers,” Dwyer said.
Bruce Ralston, Minister of Jobs, Trade and Technology, said B.C. is very frustrated and concerned about the continued effect these unwarranted punitive duties will have on B.C.’s forest sector and on the families in communities across B.C. whose livelihoods rely on it.
“These unfair U.S. duties, while lower than the preliminary duties of 28.25 per cent, are affecting companies like Catalyst that support about 6,500 jobs in the province,” he said.
“We are committed to fighting for workers, industry and our communities, and to maintaining B.C.’s strong exports of pulp and paper. Our government and the Government of Canada have repeatedly raised this issue with our U.S. counterparts in hopes that common sense will prevail. Although these duties have been confirmed by the Department of Commerce, we know there has been an unprecedented level of opposition from across the U.S. political spectrum and industry.”
Ralston said the B.C. government urges the International Trade Commission to do what is right and determine that the U.S. industry has not been injured, and overturn the decision.
“Should the ITC ignore all evidence before it and find that U.S. industry has been injured in this case, we will work with the Government of Canada to pursue all appeals,” he said.
In 2015, Catalyst was saddled with a countervailing duties rate of 18.85 per cent when the U.S. imposed tariffs on imports of supercalendered paper from Canada, and paid more than $18 million in duties and legal costs before the countervailing duties on the company were suspended.