ANNOUNCEMENT 01 Jun 2017

Canada is providing a Can.$867 million support package for its foresty sector, the largest component of which consists of loans and loan guarantees. According to the U.S. Lumber Coalition, the assistance provided through Export Development Canada and the Business Development Bank of Canada “only further tilts the trade scale in Canada's favor, threatening more than 350,000 jobs in communities across the United States.”

NUMBER OF INTERVENTIONS

4

  • 4 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 01 Jun 2017 | Removal date: open ended
Still in force

State loan

Responding to the threat of countervailing duties imposed by the United States, the government of Canada announced on June 1, 2017 a Can.$867 million (U.S.$654 million) assistance plan for the country’s forest sector. Unveiled by Natural Resources Minister Jim Carr, the package includes expanded loan guarantees, financing support, and employment-insurance. The largest component of the package is up to Can.$605 million (US$458 million) in loans and loan guarantees provided by the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).

 

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
Inception date: 01 Jun 2017 | Removal date: open ended
Still in force

Other export incentive

Also among the larger components of the package is Can.$45 million (US$34 million) over three years (US$11 million/year) in Natural Resources Canada’s (NRCan's) Expanding Market Opportunities (EMO) program that “will increase and diversify market opportunities for Canada’s forest products industry in offshore markets and expand wood use in non-residential and mid-rise construction.”

 

Created in 2012, and funded with Can.$43 million (US$33 million) in 2015-16 (US$16.5 million/year), the EMO program has two components. The goal of the Offshore Markets component is to maintain and grow international forest product markets while promoting Canadian forest products as an environmentally responsible choice, and the goal of the North American component is to expand wood use in the North American non-residential and mid-rise construction market and position Canada as a world leader in sustainable forest management and a preferred source of sustainable forest products. Most projects funded under EMO are cost-shared with industry and other partners (see http://www.nrcan.gc.ca/forests/federal-programs/13133).

 

 

Inception date: 01 Jun 2017 | Removal date: open ended
Still in force

Financial grant

A further component of the package is Can.$55 million (US$42 million) over three years in the Investments in Forest Industry Transformation (IFIT) program. Created in 2010, the IFIT program offers non-repayable contributions to successful applicants in the Canadian forestry industry to implement innovative, first-in-kind technologies in their facilities. The goal of the program is to provide funding for projects at the pilot to commercialization phase, with the intent of helping these technologies get to market. The average annual funding prior to this latest announcement was Can.$21 million (US$16 million).

Inception date: 01 Jun 2017 | Removal date: open ended
Still in force

State aid, nes

The final component of the package is Can.$63 million (US$48 million) over three years (US$16 million per year) in the Forest Innovation Program (FIP). Originally created in 2012 with a federal government investment of Can.$105 million (US$79 million), and most recently funded at Can$92 million over two years (US$35 million per year), the FIP is targeted at fostering innovation and expanding market opportunities for the sector. It directly supports the Transformative Technologies Program, which supports pre-commercial research and development and technology transfer for innovative technologies and processes in the forest sector, and the work of the Canadian Wood Fibre Centre (see http://www.nrcan.gc.ca/forests/federal-programs/13137).