U.S. Presses Canada on Softwood Lumber

(American Shipper)

The United States on Friday requested consultations with Canada under the 2006 Softwood Lumber Agreement (SLA) regarding alleged unfair under-pricing of timber harvested from public lands of British Columbia.

The consultations provide an opportunity for the United States and Canada to exchange views and attempt to resolve their differences. If the matter cannot be resolved this way, then either the United States or Canada may request arbitration.

“The decision to move to consultations is intended to emphasize the importance of resolving this matter,” said U.S. Trade Representative Ron Kirk, in a statement.

To the United States, it appears that British Columbia is providing softwood lumber producers a low-cost input for their products and circumventing the SLA export measures. Read more here.

Related: Canada Says U.S. Softwood Complaint Unjustified (Reuters)

Manitoba Premier to Lead Trade Mission to China and Philippines

(Canada-Asia News – Government of Manitoba)

Manitoba Premier Greg Selinger and Lt.-Gov. Philip Lee will lead a trade mission of 40 individuals representing almost 30 companies and organizations to the Asia-Pacific region later this month to promote trade and tourism. The 11-day mission will include stops in Beijing, Shanghai, Hong Kong and Manila.

Premier Selinger noted the province’s new inland port, CentrePort Canada, is attracting a lot of attention in China. “One of the ways Manitoba is building its trading relationships with China and other markets is through its support for CentrePort, Manitoba’s new 20,000-acre inland port and multi-modal transportation hub, which is part of Canada’s Asia-Pacific Gateway and offers supply-chain options for companies doing business in international and North American markets.”

In 2009, Manitoba’s total trade with the Asia-Pacific region was $2 billion.

Governments of Canada and BC Launch Asia Trade Program

(Canada Asia News – BC Ministry of Small Business, Technology and Economic Development)

Joint funding of $2,030,000 for the BC Economic Innovation Partnership Program, a program to boost trade and investment with Asia, was announced by the Government of Canada and the Province of BC. The BC Economic Innovation Partnership Program supports activities that promote trade and investment between Asia and BC such as seminars, inbound and outbound trade missions and online marketing initiatives.

The program involves businesses, academia, industry associations and various levels of government. One element of the program is an initial business accelerator pilot project operating out of the Province’s Trade and Investment Representative Office in Bangalore, India. Through this pilot project, companies from BC can temporarily set-up shop at the trade office and tap the staff’s on-the-ground expertise and network of contacts while exploring the Indian market, developing partnerships and creating business opportunities.

Nova Scotia Harmonized Sales Tax Rate Change

(CBSA)

Effective July 1, 2010, the Harmonized Sales Tax (HST) rate in Nova Scotia will increase from 13% to 15%, 5% of which is the federal portion and 10% of which is the provincial portion.

Impact on Imported Goods

Starting July 1, 2010, the CBSA will apply the new HST rate to all non-commercial goods imported into Canada by or for a consumer who is a resident of Nova Scotia. Please note that the HST applies to non-commercial goods destined for Nova Scotia regardless of where the goods enter into Canada.

“Non-commercial goods” means all goods other than goods imported into Canada for sale or for any commercial, industrial, occupational, institutional, or other like use.

Tobacco taxes and provincial alcohol markups will continue to be collected according to the province of entry.

As is the case today, the provincial component of the HST will not generally apply to commercial goods that are imported by an HST registrant for consumption, use, or supply exclusively in the course of the commercial activities of the registrant.

Although the provincial portion of the HST is not payable when commercial goods are imported into Canada and destined for a participating HST province, the goods may be subject to self-assessment rules. For more information about the self-assessment rules, please consult the Canada Revenue Agency (CRA) Website.

Goods Exempted from the Provincial Portion of the Nova Scotia HST

The province of Nova Scotia has expanded its list of goods that will be eligible for a point-of-sale rebate of the provincial portion (10%) of the HST. The list now includes:

• children’s diapers;
• children’s clothing;
• children’s footwear;
• feminine hygiene products; and
• books.

The CBSA will automatically apply the rebate to qualifying goods being imported into Canada and destined for Nova Scotia.

To obtain a complete list of these exemptions, please refer to the exemption table.

‘Silly Rules’ Cost Canadian Economy $8B Each Year

(Brian Lilley — Toronto Sun)

It’s illegal for a Canadian to take a bottle of wine across a provincial border or for a hairdresser to set up shop in another province without undergoing testing.

A new report says these and other goofy rules cost the Canadian economy $8 billion each year.

While the Harper government pursues free trade agreements overseas and has put stopping protectionist measures at the heart of the G8 and G20 meetings, a paper issued Monday by the Macdonald-Laurier Institute says it is time for the federal government to put an end to what one author describes as silly rules. […]

International Trade Minister Peter Van Loan met with his provincial and territorial counterparts in Ottawa on Monday; the issue of trade within Canada was not on the agenda.

“Canada is a free trade leader. Our economic success depends on free trade, not protectionism,” Van Loan said in a press release.

“He’s right,” said Robson. “Now let’s do it at home.”

Read more here. Find out more about the report “Citizen of One, Citizen of the Whole: How Ottawa can strengthen our nation by eliminating provincial trade barriers with a charter of economic rights” by Brian Lee Crowley, Robert Knox and John Robson” here.

Related: Report urges more power for Ottawa (Toronto Star)

Coalition for Fair Lumber Imports Reiterates Concerns Regarding Changes to British Columbia’s Interior Stumpage Pricing System

(PRNewswire)

The Province of British Columbia has begun to implement changes to its pricing system for public timber which are likely to permanently lock in recent timber pricing abuses that are in direct violation of the U.S.-Canada softwood lumber trade agreement. The Coalition for Fair Lumber Imports maintains that correcting and remedying B.C. stumpage pricing abuses that were, and continue to be, in violation of the SLA is essential to preserving the integrity of the trade agreement.

“British Columbia’s abusive stumpage pricing practices have been harmful to the entire North American lumber industry outside Interior B.C.,” said Steve Swanson, chairman of the Coalition and president of the family-run Swanson Group in Oregon. “But these abuses have been a lifeline thrown to the B.C. industry by the provincial government, so it is not surprising that the B.C. industry spokesperson, Mr. John Allan, believes all is well under the SLA. However, all is not well when B.C. has been violating the SLA for the last three years. The Coalition will continue to press for full retroactive compliance with the SLA,” stated Mr. Swanson. Read more here.

Supreme Court of Canada Decision a Wake-Up Call for Tardy Victors in International Arbitration Proceedings

(McCarthy Tétrault – Orlando E. Silva)

Arbitration as an option for dispute resolution in international commercial transactions presents a unique set of issues that are often not given the attention and due care they deserve. The primary attraction of international arbitration is that an award rendered pursuant to a valid arbitration clause has virtual finality and international currency in terms of enforcement. It will therefore not be subject to appeal as are court judgments. The intention is that the parties will be able to enforce an arbitration award with minimal court intervention….

[Based on a recent Supreme Court decision,] “… Successful arbitration parties with awards in hand, wishing to enforce an award in a given province, should take careful note of the provincial legislation that applies to international commercial arbitration awards and any provincial limitation period legislation that may be applicable when the award is presented to the court for recognition and enforcement.”

Read the complete article here.

Anti-HST Campaign Grows in Strength

(Justine Hunter — Globe & Mail)

Petitioners say they have enough signatures in 83 of 85 ridings to force Campbell to back down

British Columbia’s map is increasingly painted in “No HST” colours, but Premier Gordon Campbell vowed Tuesday to press ahead with the tax change despite the political price he is paying.

“I think there's probably only one thing in the province less popular than the HST and that's potentially me at this particular moment,” Mr. Campbell said.

Earlier in the day, organizers of a petition to repeal the new tax under B.C.’s citizen-driven initiative process announced they have already gathered enough signatures in 83 of the province’s 85 ridings to meet the requirements to force Mr. Campbell’s government into retreat. Read more here.

Western Premiers on Asian Trade Quest

(CBC News)

Three western premiers are leaving for Asia on Thursday, with an eye to promoting investment in their provinces from China and Japan and touting the region as Canada’s “economic powerhouse.”

Saskatchewan Premier Brad Wall, Alberta’s Ed Stelmach and British Columbia’s Gordon Campbell are making the trek as part of their recently signed New West Partnership agreement, which commits them to work together promoting trade and reducing trade barriers.

Wall said the three provinces may establish a trade office in China.

“There’s a cost issue, to be sure, if we were to do this,” said Wall. “There’s also a branding issue.

“Because it’s one thing for the Saskatchewan brand to be known in a market that big and that far away. It’s a little bit better to leverage the western Canadian brand or the Canadian brand, and so if we were to do something like that – that would be the rationale – yes, cost and also the branding issue of the ‘Canadian brand.’”

“The recent economic downturn has proven that we are stronger if we work together,” said Campbell. Read more here.

Western Provinces Sign Economic Deal

(CBC News)

The premiers of B.C., Alberta and Saskatchewan have signed a deal designed to help the three provinces remove barriers to economic development and function more as a single economic zone. Under the New West Partnership agreement, which was signed Friday in Regina by B.C.’s Gordon Campbell, Alberta’s Ed Stelmach and Saskatchewan’s Brad Wall, professional qualifications and business licences obtained in one province will be recognized by each of the partners.

“We signed an agreement today that creates an amazing economic force: the New West, an economic region of 9 million people strong and $555 billion in GDP,” Wall said. “It is an economic region that is home to a number of industries the world is very interested in right now.”

The deal means, for example, a teacher who’s certified in Saskatchewan will also gain certification in the other two provinces.

The provinces also agree to promote the region together. The three premiers will start doing that next month when they travel together on a trade mission to Japan and China.

They also say they’ll try to use the provinces’ joint purchasing power to get better deals from suppliers for things like prescription drugs. That should save all of them money, Campbell said. “If we jointly procure equipment for our schools or we jointly procure textbooks or pharmaceuticals, there are substantial savings for British Columbians, Albertans and people from Saskatchewan,” Campbell said. Read more here.

Governors Endorse Freer Trade

(National Post-Canwest News Service)

Meet with premiers; Gathering hailed as ‘huge step forward’

Canadian politicians have long complained about the challenges of getting their voices heard in U.S. halls of power. But for seven Canadian premiers, there’s no longer any reason to complain.

Armed with arguments and statistics in favour of free trade, and employing a bit of Canuck charm, Canada’s provincial leaders got an enthusiastic welcome this weekend from U.S. state governors who generally endorsed calls for stronger cross-border ties and commerce.

By the end of the premiers’ first-ever meeting on Saturday with the National Governors Association, Pennsylvania Governor Ed Rendell was singing a gravelly voiced rendition of O Canada. Mississippi Governor Haley Barbour proclaimed the Canada-U.S. relationship as “breathtaking” and unique to the world. Read more here.

U.S. Governors to Host Canada's Premiers at Influential Event

(The Canadian Press - Lee-Anne Goodman)

Amid increasing U.S. trade protectionism, Canada's premiers will get a moment in the spotlight at the influential National Governors' Association winter meeting, a gathering that often serves as a guiding policy light for both Congress and the White House.

Saskatchewan Premier Brad Wall is co-hosting an event during the meeting entitled Common Border, Common Ground, focusing on touchy Canada-U.S. issues that include trade, border security and energy. It's the first-ever meeting between the association and its Canadian counterpart, the Council of the Federation.

“This historic meeting between NGA and COF is an opportunity to build lasting relationships,” reads the invitation from Wall and Jim Douglas, governor of Vermont and chairman of the association. It goes on to “strongly encourage” all governors to attend the February 20 event. Read more here.

Deal Close on ‘Buy USA — With Strings

(Toronto Star)

There has been a breakthrough in talks between Ottawa and Washington aimed at resolving a dispute over a protectionist U.S. policy known as Buy America, according to a source close to the negotiations.

A tentative deal is ready to go to the desks of Prime Minister Stephen Harper and President Barack Obama, the source said, but both could still face significant political obstacles in winning support for the deal. […]

The compromise would for the first time guarantee that U.S. manufacturers could bid on supply contracts being awarded by provincial and municipal governments in Canada, the source said. Read more here.

Path to Recovery Challenging for Canada’s Regions

(Export Development Canada – Peter G. Hall)

This year has already made history. As far back as the records go, Canadian exporters have not seen a worse year than 2009 – by a factor of five, no less. Canada’s recession was indeed an imported one, and the decline in activity is so dramatic that no single province but the smallest has escaped its effects. Even so, there are differences in each province’s experience, and in the outlook for 2010.

Pan across estimated performance for 2009, and export losses in certain provinces seem impossibly severe. Declines of 29% in New Brunswick, Saskatchewan and British Columbia, topped by a 36% plunge in Alberta, and an unthinkable 44% drubbing in Newfoundland. The magnitude almost seems impossible, until put in proper context. By and large, this year’s big losers saw banner performances in 2008 – for Newfoundland, a 27% increase, a stunning 34% gain in Alberta. But nothing matched the drama of Saskatchewan’s explosive 55% surge. These gyrations reflected movements in the prices of key commodity exports, which settled down again this year after their late-boom spike.

Unfortunately, not all provinces had such well-padded declines. Prior to this year’s plunge, British Columbia saw just 5% growth in 2008, as overall performance was weighed down by the front-running plight of the lumber industry. Nova Scotia’s 24% drop this year was preceded by a relatively slim 7.6% gain in 2008, which itself reflected early weakness in the lumber and fishing industries. Quebec’s growth was stunted in 2008 by a sharp drop in aluminum exports. However, Ontario entered the downturn in the weakest position. The early woes of the auto sector led to a 7.7% drop in exports last year, the weakest performance among the provinces, and the only region to post a decline.

Read the article or watch the video here.

Ontario and British Columbia HST

(CSCB)

The Canada Revenue Agency (CRA) has published GST/HST Notice 247. This notice provides additional information on the collection of HST in Ontario and British Columbia, scheduled to come into effect on July 1, 2010.

Pages 6 and 7 of this notice include information on imported goods and services, and a lengthy question and answer section is included at the end of the notice.

In particular, it should be noted that the provincial part of the HST generally applies to non-commercial goods, that is, it is generally collected on casual goods only. This is the same practice as in the three provinces that currently collect HST.

Canada’s Mayors Drop Anti-‘Buy American’ Plan

(CBC News)

Canada’s mayors have shelved, for now, a resolution that had threatened to block U.S. companies from bidding on city contracts in response to the “Buy American” push in the United States.

Reports of progress between the U.S and Canada over the controversial provision in the U.S. stimulus package prompted the Federation of Canadian Municipalities to withdraw the threat. “We are encouraged by the talks now underway between Canadian and U.S. officials and want to give them the time and space to reach a successful outcome,” federation president Basil Stewart said Saturday. “These talks can and should lead to a fair and mutually beneficial agreement.”

The move follows a CBC News report that a deal is in the works to exempt Canada from the provision. In return, Canada would announce its provincial and municipal doors are wide open to U.S. companies.

The resolution was passed in June at the Federation of Canadian Municipalities’ conference in Whistler, B.C., by a vote of 189-175. It said the federation should support cities that adopt policies allowing them to buy only from companies whose home countries don’t impose trade restrictions against Canadian goods. The action was to take effect Sunday.

Federation vice-president Berry Vrbanovic said he does not believe suspension of the deadline will remove pressure on the U.S. as the mayors are leaving the door open to reconsider it if a deal is not reached.

The “Buy American” provision gives priority to U.S. iron, steel and other manufactured goods for use in state-level and municipal public works and building projects funded with taxpayer stimulus money.

Canadian governments and businesses have railed against the policy, arguing it violates the North American Free Trade Agreement.

U.S. Trade Waiver ‘No Silver Bullet’

(Toronto Star – Joanna Smith)

Ottawa’s request for `Buy American’ exemption might not stem local protectionism, observers say

Asking that Canada be exempt from the “Buy American” provision in the U.S. federal stimulus bill is just the first step to more cross-border business, says International Trade Minister Stockwell Day. But while observers say a waiver would be a step in the right direction, they question whether it will be enough to stem the tide of protectionism at the state and local levels.

Day sent a letter last Thursday to U.S. Trade Representative Ron Kirk offering “time-limited” guaranteed access to purchases by provincial and territorial governments and major municipalities in exchange for a speedy waiver of “Buy American” provisions. Day said he and Kirk have agreed to meet soon.

“I’m not sure the extent to which a waiver at the federal level is going to go down, especially when the people at the state and local levels are much closer to the electorate,” said Walid Hejazi, an associate professor of international business at the Rotman School of Management in Toronto. “It’s not going to hurt, but it’s not the silver bullet that is going to make this go away.” Read more here.

Canada Offers Trade Promises to U.S. in Exchange for Buy American Waiver

(Campbell Clark — Globe & Mail)

Ottawa, provinces offer ‘time-limited' proposal that would give American firms ‘guaranteed access' to contracts

The Canadian government has offered the U.S. guaranteed access to the provinces’ public purchases in exchange for a quick waiver of Buy American provisions that have frozen Canadian companies out of lucrative American stimulus-spending contracts.

In a letter to U.S. Trade Representative Ron Kirk, Canadian trade minister Stockwell Day said such a deal would address Canada’s immediate concerns about Buy American, and could serve as a prelude to a permanent deal that would open cross-border access to provincial, state, and city contracts.

The letter, dated Thursday and obtained by The Globe and Mail, refers to a proposal that Canada submitted at the same time, after lengthy talks with the provinces.

“Through this proposal, Canada is offering time-limited guarantees to an ambitious package of sub-federal procurement in an exchange for a waiver from the “Buy American” requirements in the Recovery Act and any similar requirements in new federal U.S. legislation.

The U.S. Recovery Act, the $860-billion stimulus package pass early this year, sends about $260-billion to state and local governments in the U.S. for spending projects, but requires that all steel and manufactured goods be U.S. made. Similar provisions are included in several bills winding through the U.S. Congress.

The U.S. has down played the impact, even Canadian companies say they have been frozen out of lucrative contracts. But earlier this month, U.S. President Barack Obama brushed off the concerns.

“I do think it’s important to keep this in perspective. This in no way has endangered the billions of dollars of trade taking place between our two countries,” Mr. Obama said as he, Prime Minister Stephen Harper and Mexican President Felipe Calderon wrapped up their so-called Three Amigos summit.

“I want to assure you your Prime Minister raises this with me every time we see each other,” he had said. “[But] I think it’s also important to keep it in perspective, that in fact we have not seen some sweeping steps toward protectionism,” he said.

Spending by states, provinces, and cities is not covered by the NAFTA – Canadian provinces wanted it left out when the trade pact was signed – but Canadian provinces have agreed to negotiate some guarantees in exchange for a Canadian exception to buy American.

“This offer is ambitious in its coverage of all Canadian provinces, territories and major municipalities as well as coverage comparable to that under NAFTA for all goods and services, including construction services,” Mr. Day wrote in the letter. Read more here.

Persuasion Key to Countering U.S. Protectionism, McGuinty Argues

(Toronto Star – Joanna Smith)

Ontario Premier Dalton McGuinty is encouraging municipal governments to combat “Buy American” policies by reaching out to their neighbours below the border instead of adopting protectionist measures of their own.

“We are kidding ourselves if we think we can be safe by building a lifeboat just for the people in our communities,” McGuinty told the annual conference of the Association of Municipalities of Ontario this afternoon according to an advance copy of his speech. “In an age of globalization, at a time when our jobs depend on strong trade, what's called for is not a lifeboat for a select few. We need an ark, for all of us.”

McGuinty said the best way to recover from the economic downturn is by working together. “I want to thank all of you who have spoken out against 'Buy American' protectionism and reached out to your counterparts across the border,” McGuinty said, adding that he and other premiers have endorsed efforts by Prime Minister Stephen Harper to ask the U.S. to exempt Canada from the protectionist provision in its federal stimulus bill. “I strongly encourage you to do the same,” McGuinty said. Read more here.

‘Buy American’ Hard to Halt: Harper

(CBC News)

Prime Minister Stephen Harper warned Canadians on Thursday that discouraging protectionist trade policies in the United States might not be a straightforward task.

Speaking at a news conference announcing a new economic agency for southern Ontario in Kitchener, Harper touched on the subject of how Canada could best discourage a growing call for trade protectionism by its southern neighbour.

Protectionism in the face of moribund local economies featured prominently in discussions in Guadalajara, Mexico earlier this week among Harper, U.S. President Barack Obama and Mexican President Felipe Calderon.

There are global fears that the “Buy American” provisions slipped into the $787-billion US stimulus package by the U.S. Congress last February and designed to stimulate job creation in the United States will cut off any nascent economic recovery in Canada at its knees.

Ottawa is confident that an agreement on the issue can be reached, Harper said, but he cautioned that won’t simply being a case of getting a pledge from Obama on the issue. Read more here.

Related: Canada, U.S. business groups unite against Buy American (Calgary Herald)