Catalyst Paper, which owns the Crofton pulp and paper mill, expects its business will be impacted by the newly announced punitive duties on newsprint sales to the U.S, if the ruling stands.
Company spokeswoman Eduarda Hodgins said Catalyst is “disappointed” with the preliminary decision of the U.S. Department of Commerce on Jan. 9 that Canadian producers of uncoated paper used to print newspapers, directories and catalogues are unfairly subsidized.
That means Catalyst, which exports a significant portion of its Canadian production to the U.S., faces countervailing duties of 6.1 per cent on its shipments to the U.S. as of Jan. 16.
“We believe this decision is unfair and unwarranted , and we will vigorously defend ourselves, our employees and our customers,” Hodgins said.
“We expect the final determination on the punitive duties to be made by the U.S. Department of Commerce in May or June and we intend to work with the Canadian and American governments until then to try to change this ruling.”
The Crofton mill employs more than 570 people, while Catalyst’s Powell River mill has almost 450 workers.
Hodgins said it’s too early to speculate if there will be layoffs and/or shut downs at its mills as a result of the punitive duties, but acknowledged it will likely have consequences on its business if changes aren’t made.
“It’s a very unfortunate trade action, but we fully intend to defend ourselves,” she said.
“We were successful in another recent case regarding punitive duties by the U.S. in which we won and had our money paid in duties returned, and we hope to be successful again.”
In November, 2016, the U.S. Department of Commerce 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.
But Hodgins said yet another anti-dumping duty ruling against Canada is expected in March from the U.S. Department of Commerce which will likely impact Catalyst.
“We’re also concerned about that,” she said.