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Softwood Dispute: Province against province, mill against mill

Canada and the United States are the world's largest trading partners, but there's one thing they've never agreed on: softwood lumber. The dispute dates back hundreds of years, but in the 1980s it turned nasty. The U.S. has slapped billions of dollars of fines on Canadian wood, jeopardizing thousands of jobs. The dispute raises serious questions about trade, sovereignty, and the real nature of Canada-U.S. relations.

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Finally, a solution. After three years of fighting before international panels and another two years of negotiation, the softwood war is over... for now. Canada has bought five years of peace by agreeing to national limits to softwood exports. But how to divide up the quota? Already the lobbying and infighting has begun. As we hear in this clip from The World at Six, every province, lumber company and exporter is fighting for a piece of the pie. 
• On May 29, 1996 Canada and the United States finalized the Softwood Lumber Agreement (SLA), which would last until March 31, 2001. The SLA allowed a limited quantity of softwood (based on 1995 export levels) to enter the United States without a duty or tax. A two-tiered tax would be imposed on exports exceeding that limit.

The SLA allowed tax-free exports of 14.7 billion board feet per year from British Columbia, Alberta, Ontario and Quebec (the Maritimes were exempt). If exports exceeded that level, the Canadian government was to collect fees as follows:
• $68 Cdn per thousand board feet for the first 650 million board feet
• $136 Cdn per thousand board feet for greater quantities

• The initial quotas were allocated to lumber companies in the major exporting provinces as follows: British Columbia, 59 per cent; Quebec, 23 per cent; Ontario, 10.3 per cent; Alberta, 7.7 per cent.

• The deal bought five years of peace in the 15-year-old trade war. Minister for International Trade Art Eggleton, who announced the plan, called it "the best deal in a bad situation."
Medium: Radio
Program: The World At Six
Broadcast Date: Aug. 19, 1996
Guests: Frank Dottori, Brad Johansen, David Mitchell
Host: Karen Gross, Raphi Vigod
Reporter: Joanne Bayly
Duration: 2:45

Last updated: December 10, 2013

Page consulted on September 10, 2014

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