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Port Hawksbury Paper Protests U.S. Trade Action

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As reported by OTW last week, Catalyst Paper, Richmond, B.C., Canada, immediately protested the U.S. decision to impose tariffs on Canadian paper makers it believes are unfairly receiving subsidies on the grounds that their particular company was not part of the direct investigation. Shortly after, Port Hawksbury Paper, Port Hawksbury, N.S., Canada, announced it was also opposed to the decision to impose an interim duty of 20.33%

"We are very confident in our ability to reduce these interim duties substantially, or eliminate them entirely, as part of the process," said Marc Dube, development manager of Port Hawkesbury Paper to the Globe and Mail, Toronto, Qué., Canada.

This is the highest duty rate on Canadian mills. J.D. Irving mill in St. John, N.B., and Catalyst Paper are facing an 11.9% duty. Resolute Forest Products in Montreal, Qué., is facing a 2% tariff. The action is the result of a petition filed by two U.S. producers of supercalendered paper. 

In what may account for the higher duty, the Cape Breton mill received a rescue package from the former NDP government in 2012 valued at $124.5 million to help it re-open. The assistance came on top of another $36.8 million the province spent to keep the mill in usable condition before private investor Ron Stern purchased it from bankruptcy. A portion of the high duty comes as a result of a power deal the mill argues was, upon completion, indirectly received through their private market. Mill management argues that a rescue package shouldn’t be considered a subsidy under free trade rules because a portion is in loans that can still be repaid, and about half of the funds, according to the company, came from sale of land to the province. 

Management also estimated and reported to the newspaper that the U.S. government expects to make about $4 million per month in duties as the trade action continues.

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