Catalyst Paper and other Canadian newsprint makers are off the hook for substantial American tariffs.
On Aug. 29, the U.S. International Trade Commission overturned duties imposed on some Canadian newsprint, stating that it found that imports of the paper products do not injure U.S. industry.
Earlier this month, the U.S. Commerce Department had decided to impose anti-dumping and countervailing duties totalling 20.26 per cent on Catalyst Paper’s exports of uncoated groundwood paper, used in the production of paper products such as newspapers, flyers and catalogues, to the U.S.
But the ITC’s vote overrules the findings of the Commerce Department.
Catalyst owns the Crofton pulp and paper mill, which employs more than 500 people, and two other mills in Port Alberni and Powell River on Vancouver Island.
Other Canadian producers, including Resolute Forest Product and Kruger Inc., were also facing duties on their newsprint products heading to markets in the U.S.
The duties came about after Washington-based North Pacific Paper Co. complained that Canada was dumping newsprint into the American market and unfairly subsidizing its industry at home.
Catalyst president and CEO New Dwyer said he’s “very pleased” with the unanimous ruling from the ITC.
“We are a global exporter of pulp and paper products and we play by the rules,” he said.
“The facts show that the petitioner’s allegation that Catalyst Paper has harmed the U.S. newsprint industry is false. Due to the negative injury determination, these duties no longer apply after the ITC publishes its final determination at the end of September, and the cash deposits collected to date will be refunded to the company.”
But Dwyer said the industry continues to face a challenging operating environment stemming from increasing costs and declining demand.
“Today’s ruling is a welcome break for Catalyst, our customers, employees, and the communities where we operate,” he said.
“Catalyst would like to recognize and thank Premier John Horgan and his government, along with [federal] Minister [Chrystia] Freeland and the Government of Canada, as well as our local mayors, Unifor, and the PPWC for their defence of our company, our employees and our operating communities in this costly trade dispute.”
Fearing the possible impacts of the tariffs on Catalyst’s operations, the province decided to act last month to ensure the company’s pension plans were protected.
Premier Horgan and Bruce Ralston, minister of Jobs, Trade and Technology, issued a joint statement on Aug. 29 after the decision by the ITC.
“People who work at Catalyst on Vancouver Island, in Powell River and Metro Vancouver can breathe more easily today,” the statement said.
“Today’s ruling means that Catalyst will no longer have to pay these debilitating, unfair duties. We’re very pleased with the outcome and we’re glad the ITC has made the right decision based on the evidence before it. This is good news for people who work in the newsprint industry.”
The statement said that although this case is now over and the duties paid so far will be refunded, the damage it has inflicted on Catalyst and other Canadian producers is disturbing.
“Our government, the federal government, local mayors and councils, the company and workers stood together to protect the jobs and economy of coastal communities, and we will continue to vigorously defend B.C. against future unfair U.S. litigation,” the statement said.
“The governments of B.C. and Canada demonstrated clearly during the investigation that they had not been subsidizing Catalyst’s operations, and we’re satisfied by today’s decision by the ITC.”
It’s not the first time Catalyst has had duties imposed on it by the U.S. Department of Commerce that had to be eventually rescinded.
In November, 2016, the DOC decided after a review that Catalyst’s exports of supercalendered paper into the U.S. market would not be subject to countervailing duties because the company received a negligible amount of subsidies during the applicable period of review.
Catalyst requested the review, which looked specifically at its production during 2014, after the DOC imposed countervailing duties on imports of supercalendered paper from Canada in December, 2015.
Catalyst was saddled with a countervailing duties rate of 18.85 per cent, and paid more than $18 million in duties and legal costs before the countervailing duties on the company were suspended.