Canada has come out on top in the first softwood lumber case to go to arbitration since a lumber deal was struck between the US and Canada in 2006.
The London Court of International Arbitration threw out the US government’s claim that Canada had violated the accord by not factoring reduced American softwood consumption into British Columbia’s and Alberta’s sliding scale of export duties.
The court declared that Canada had not breached terms of the Softwood Lumber Agreement and dismissed the case. If it had lost, Canada faced paying out tens of millions of dollars to the US in tax revenue.
However, the court did find that other provinces operating a quota system under the agreement had failed to calculate the duties correctly.
Canadian international trade minister David Emerson said the governmment was pleased about the outcome with regard to British Columbia and Alberta.
“Today’s decision provides clarity with respect to the implementation of the Softwod Lumber Agreement in the future,” he said.
Both sides have a month to submit comments or an agreement on how to proceed following the ruling.
“We will continue to defend Canadian interests throughout this process,” added Mr Emerson.
