Nova Scotia softwood lumber exports to U.S. to be hit with 20% tariff

After a day of uncertainty, the Nova Scotia government admitted late Tuesday afternoon it has lost a long-standing exemption from U.S. border taxes on softwood lumber exports from the province, at least for now.

"Needless to say, we are disappointed," said Trade Minister Michel Samson.

Earlier in the day, Samson said the province was awaiting official confirmation on the fate of the exemption from American authorities.

As of May 1, a 19.88 per cent tariff will be imposed on Nova Scotia softwood forest products shipped into the U.S.

The countervailing duty, announced Monday night, ends a three-decades old exemption granted by the U.S. in recognition that Atlantic Canada's forest industry is not subsidized.

Nova Scotia and two other Atlantic provinces even had support from the U.S Lumber Coalition, the industry lobby group pushing for punitive tariffs on Canadian softwood.

On April 3, it amended its petition asking to maintain the exemption for softwood from Nova Scotia, P.E.I. and Newfoundland and Labrador.

The U.S. Commerce Department said Tuesday it is considering the U.S. industry's request for an Atlantic region exemption.

Samson hopes the countervailing duty is temporary.

"There's been a decision to defer consideration of the exemption. We are going to continue all our efforts to again show to the U.S. Lumber Coalition and the Department of Commerce that Nova Scotia producers have been playing by the rules," he said.

Irving not facing same tariff

The region's odd province out is New Brunswick, which the Americans claim is subsidizing its forest industry, dominated by J.D. Irving.

Irving asked to be specifically included in the U.S. Commerce Department's investigation into Canadian softwood. As it turns out, Irving was slapped with a three per cent countervailing duty on Monday night, the lowest for any producer in Canada.

Every other producer in Atlantic Canada is now facing a countervailing duty of nearly 20 per cent.