Maritime Lumber Bureau dismisses U.S. complaint over loan to N.B. mill

THE CANADIAN PRESS
SAINT JOHN, N.B. - The Maritime Lumber Bureau dismissed Monday a U.S. lumber lobby group's complaint that government aid to Miramichi Lumber Products violates a bilateral softwood lumber agreement.
Diana Blenkhorn, president and CEO of the Amherst, N.S.-based industry association, said she plans to reach out to Washington's U.S. Coalition for Fair Lumber Imports to ensure the organization understands her group's position.
The province said last week it would be giving a $1.5-million loan, a $1.5-million loan guarantee and an increase in Crown wood allocation to help Miramichi Lumber Products, which went into receivership last May, restart operations with 100 employees.
"We don't view that as being a subsidy or inconsistent with the SLA (softwood lumber agreement)," Blenkhorn said in an interview.
The Washington group said in a release that "government support programs" for the Miramichi firm, formerly known as Newcastle Lumber Co. Ltd., are in direct contravention of the U.S.-Canada Softwood Lumber Agreement of 2006.
The group said that by using "subsidies" to open production facilities that otherwise could not have obtained financing, New Brunswick's actions will prolong the depression in the North American lumber market.
Blenkhorn said Business New Brunswick has, for years before and after the bilateral agreement was signed, provided loans to companies and these should not be seen as subsidies.
"They are only one investor," she said of the department. "There are a number of accomplished investors who have invested in Newcastle Lumber."
The U.S. group did not return requests for comment Monday. The release did not indicate whether the group would be taking any further action on the issue.
Atlantic provinces are exempt from export duties, provided that the products exported to the United States are accompanied by an original Maritime Lumber Bureau certificate of origin.
"I would classify it as a hard-fought acknowledgment of the unique circumstances that exist in Atlantic Canada," Blenkhorn said, pointing to a few factors that contribute to the exclusion.
The region's industry has been deemed market-based for a several reasons, primarily because of the significant private ownership of timber lands.
"And when compared to the rest of Canada, we are considered fairly small," Blenkhorn said.
She said that industry in Atlantic Canada hasn't particularly benefited from the 2006 deal, since it doesn't address poor markets for lumber and currency fluctuation.
"With the poor market conditions, the high value of the Canadian dollar, we're down 70 per cent (in production) even with that exclusion," Blenkhorn said.
Business New Brunswick Minister Victor Boudreau said his department ensured its assistance to Miramichi Lumber Products would not contravene any bilateral agreement on lumber.
"In this case ... this is an interest-bearing loan with a full guarantee in place so there's no subsidy, there's no break being given," Boudreau said.