Nfld. & Labrador

New tariffs will cost Corner Brook Pulp and Paper $30M a year

Corner Brook Pulp and Paper is facing another new tax from the U.S. government, just two months after it was hit by an export duty of nearly 10 per cent.

The American government is imposing more anti-dumping duties on Canadian newsprint

It's the second time in a few months that the Newfoundland paper mill has been hit with American duties. (Colleen Connors/CBC)

Premier Dwight Ball is worried about the impact of huge tariffs on newsprint from Corner Brook Pulp and Paper, following the introduction of another new tarriff by the United States.

Just two months after the mill was hit by an export duty of nearly 10 per cent, the U.S. Department of Commerce on Tuesday announced an anti-dumping duty of 22.16 per cent — the result, it says, of a preliminary investigation that found Canadian exporters underpriced uncoated groundwood paper by up to that amount.

The total tariffs will now add 32 per cent to the cost of newsprint — the highest duties of any mill in Canada.

Ball says that will cost the Kruger owned mill about $30 million annually.

"I spoke to Mr. Kruger [chairman and CEO of Kruger Inc.] this morning and I can tell you he's not giving up on Corner Brook that's for sure, and neither are we as a government," he said.

The Premier added that Kruger hasn't asked for financial help to weather the new tarrifs, but he isn't ruling that out. 

The government held a briefing at Confederation Building on Wednesday afternoon, where Ball maintained his commitment to working with Kruger, and further criticized the Trump administration's protectionist actions.

"It doesn't seem fair to me, but then again I see and point to, and all of us in the room would agree, that we've seen a lot of policies coming out of Trump that would seem unfair to us as Canadians," said Ball.

Corner Brook mill hit hardest

Uncoated groundwood paper includes newsprint, as well as paper for book publishing, printing and writing.

The U.S. Department of Commerce said it calculated a dumping rate of 22.16 per cent for most of the Canadian paper companies, including Corner Brook.

Two mills, Resolute Forest Products and White Birch, were found to have dumping rates of zero per cent.

The department of commerce said it's instructing U.S. Customs and Border Protection to collect cash deposits from Canadian newsprint importers based on the findings.

Premier Dwight Ball says his government is not turning its back on the Corner Brook Pulp and Paper Mill. (Sherry Vivian/CBC)

The department's investigation into the alleged dumping began in August 2017, and an International Trade Commission investigation began the following month.

This is the second round of U.S. antidumping duties on Canadian newsprint this year. 

In January, the U.S. Department of Commerce slapped an overall tariff of 6.53 per cent on about 25 Canadian plants, mostly in Quebec and Ontario, following an investigation that began in August 2017.

Corner Brook Pulp and Paper was harder hit, with a 9.93 per cent duty imposed.

Kruger denies dumping, calls decision "unfair"

In a statement issued Wednesday afternoon, Kruger Inc., which also owns two mills in Quebec that will be affected by the tariffs, called the newest one unfair and unfounded.

The company wrote that it was a victim of the "current environment of broader trade disputes and is subject to rulings that are inconsistent with its business practices." 

Kruger wasn't allowed to enter any evidence to prove it doesn't engage in illegal dumping, and said it would use all legal options available to defend its position to the U.S. Department of Commerce and U.S. International Trade Commission.

The company also urged the Canadian government to meet with both departments and work to reverse this decision. 

Opposition criticizes Ball's response to tariffs

​Opposition leader Paul Davis was quick to sharply criticize Ball's response to the tariffs.

He wants to see the premier get a seat at the table with Prime Minister Justin Trudeau, who Davis said has gone to bat for other industries facing tariffs from the United States.

Davis said he'd also like to see Ball reach out to Washington.

Opposition leader Paul Davis didn't mince words when discussing how unsatisfied he was with the province's response to the new tariffs. (Sherry Vivian/CBC)
"This calls for swift fast action, a coordinated effort, a political intervention, not only by the province but our seven MPs and the federal government," said Davis.

"This is right in the premier's backyard, and just to simply say he's going to work with Mr. Kruger simply isn't enough." 

The tarriffs are expected to go into effect next week. 

With files from the Canadian Press and Peter Cowan