UPDATED WEDNESDAY, MARCH 21 AT 11:25 AM
United States Department of Commerce has slapped a preliminary 22.16 per cent protectionist tariff on exports of Catalyst Paper Corporation’s newsprint products made at its Powell River mill.
The announcement on Wednesday, March 14, is a critical cost challenge for Catalyst, according to company president and chief executive officer Ned Dwyer.
“They pose a threat to our competitiveness and the sustainability of our business and we will continue to vigorously defend ourselves against them,” stated Dwyer in a media release.
The penalized paper amounts to 60 per cent of the Powell River mill’s production and the company faces $6 million dollars per month in dumping fees, according to Powell River mayor Dave Formosa.
“The worst case scenario is the end of Catalyst,” said Formosa. “It’s a scary situation.”
The Powell River mill is worth approximately $125 million to Powell River’s economy per year, including $40 million in direct payroll, more than $5 million in taxes and another $80 million in indirect expenditures, according to City of Powell River councillor and finance committee chair Russell Brewer.
“This is not good news today,” said Brewer. “Not good at all.”
The provincial government is extremely disappointed in the latest developments, according to BC minister of jobs, trade and technology Bruce Ralston.
“Workers in Catalyst mills can be sure that the government of British Columbia will be standing shoulder to shoulder with them,” stated Ralston in a media release. “We will fight for their jobs, their industry and their communities. We will not be bullied. We will not be pushed around.”
The anti-dumping duty has been imposed on the company’s exports of uncoated grounded paper products made at all of its Canadian mills, including Powell River.
The paper is used for newspapers, directories, flyers, catalogues and books.
The commerce department investigation accuses Catalyst of unfair trade practices and dumping its newsprint on the American market below what it is sold for domestically. It found Catalyst’s sales of its newsprint in the United States are as much as 22.16 per cent less than fair value.
The latest announcement marks the second time this year Canadian newsprint manufacturers have been targets of the Trump administration’s protectionist trade measures.
In January, Canadian newsprint producers were hit with an overall tariff of 6.53 per cent.
