U.S.-Canada Lumber Deal Upsets Lawmakers

Canadian Prime Minister Stephen Harper announces in the House of Commons in Ottawa, Thursday, April 27, 2006, that a softwood lumber deal with the United States has been reached. The U.S. has been imposing penalty duties on Canadian lumber for a number of years, contending that Canada is unfairly subsidizing its own producers. (AP Photo/CP, Tom Hanson) (Tom Hanson - AP)

Bush administration officials said the fate of the deal, reached Tuesday night but not announced until Thursday, would depend on industry support in both countries.

A similar agreement was reached in 2003, but fell apart after some provinces balked.

Canadian opponents of the deal want all of the tariffs returned to Canadian lumber companies because international trade panels repeatedly have ruled that the U.S. penalties were improper.

Jack Layton, leader of the opposition New Democratic Party, strongly criticized the Conservatives for letting the United States keep $1 billion in penalty duties despite numerous rulings by the World Trade Organization and other panels against the U.S. levies.

"Accepting 80 cents on the dollar _ that's a sellout," Layton shouted, provoking loud jeering by his colleagues against Conservatives across the House floor. "Is the prime minister finally going to stand up to U.S. trade bullying and say no to this slap in the face?"

Ontario Minister of Natural Resources David Ramsay slammed the deal Wednesday as unfair, but by Thursday said the deal had been sufficiently modified.

"We will lend our support to this arrangement as it will help end a long-standing dispute that has severely affected our forest industry," Ramsay said.

Still, many Canadian lumber industry officials were unhappy with the deal.

Roy Nagel of British Columbia's Central Interior Logging Association, said it seemed aimed more at creating peace with Washington than helping the Canadian industry.

"Even though B.C. is going to gain a bit more out of it than Ontario and Quebec will, I don't see this as a deal made in heaven at all," Nagel said.