NEWS RELEASES

September 13, 2006 (4:30 p.m. EDT)
No. 101

CANADA’S NEW GOVERNMENT DELIVERS A PLAN TO RETURN BILLIONS TO CANADIAN SOFTWOOD PRODUCERS

The Honourable David L. Emerson, Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics, today announced plans to put more than US$4.4 billion into the hands of Canadian softwood producers. The refund of duties to Canadian companies is part of the Softwood Lumber Agreement Minister Emerson signed with U.S. Trade Representative Susan Schwab in Ottawa on September 12, 2006.

“Canada’s New Government is committed to the swift return of duty deposits to individual softwood producers, and to a level playing field for all companies benefiting from the Agreement we have signed with the United States,” said Minister Emerson. “As a next step in the process to implement this Agreement, we have advised companies of the refund registration process and of their individual obligations under the unique mechanism that our government established to get billions of dollars to Canadian companies sooner.”

Foreign Affairs and International Trade Canada this week issued letters to some 1,500 softwood producers, explaining the registration process and industry obligations under the deposit refund mechanism. For companies that participate in the deposit refund mechanism, Export Development Canada (EDC) will purchase the rights to the duties and interest owed to them—eliminating the expected waiting period for U.S. Customs to process refunds, which may take up to two years. Under the EDC refund mechanism, cash will flow within four to eight weeks of the Agreement’s intended coming into force on October 1 to companies that have returned the necessary legal and administrative documents.

In order to ensure equity and fairness to all companies benefiting from the Agreement and to protect Canadian taxpayers from unnecessary financial burden, the Government of Canada will seek to introduce a special charge of approximately 19 percent, which would apply to all refunds. This charge will be payable to the Government of Canada by non-participants in the EDC deposit refund mechanism no later than the end of the month following receipt of a refund from U.S. Customs. By participating in the EDC deposit refund mechanism, companies have already agreed to advance an equivalent share of their refunds.

“In response to industry requests, and in an effort to ensure fairness to the vast majority of companies that support the Agreement, our government has developed a plan that puts money quickly back into the hands of Canadians,” said Minister Emerson. “We intend to recognize companies’ participation in the deposit mechanism as meeting their obligations under the proposed special charge.”

With the support of two national governments, all of the major softwood producing provinces and individual companies representing an overwhelming majority of duty deposits owed from British Columbia to Quebec and Atlantic Canada, the Government of Canada is moving forward and intends to introduce implementing legislation soon after Parliament resumes on September 18.

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For further information, media representatives may contact:

Robert Klager
Director of Communications
Office of the Minister of International Trade and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics
613-996-8605

Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000
http://www.international.gc.ca