:
Let's call the meeting to order.
I would like to thank everybody for arriving. We're a few minutes late.
The minister is here for an hour, but I think we'll go past two o'clock to make up the time we lost.
I want to welcome the minister.
As she pointed out, she was a member of this committee in the last Parliament. I enjoyed working with her then.
I should note that was one of the better sound checks. I have thoughts of music, monologue and doughnuts on my mind now. Thank you to those who were unique today.
I'm going to spare everybody the usual introduction about process, because there isn't a single person here today who doesn't know it. In the interest of time, I'll move on.
We are here today with Minister Ng, as a result of a motion by Mr. Zimmer that was tabled some time ago. So that we are reminded, as it gives us some context for today's discussion, the motion read as follows:
That, the Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade...be invited to appear before the committee as part of its ongoing study on Economic Recovery in the Forestry Sector...to provide critical information relating to the recent World Trade Organization ruling, as the government official who appeared...on Friday, October 30, 2020 was not able to respond to the question and suggested that Global Affairs Canada appear and answer that question at a future meeting.
That's just to contextualize our discussion today.
I will turn the floor over to you, Minister. Thank you once again for taking the time to be here.
:
Thank you so much, Mr. Chair.
Thank you all for the opportunity to appear today and provide you with an update on Canadian softwood lumber.
It is really terrific to be back here at the Standing Committee on Natural Resources. As I said earlier during the sound check, in 2018, I served on this committee as a member of Parliament and took part in a study on the forestry sector. It was clear to me then the importance of the forestry sector to our economy, for our workers and our environment, and that is just as true today.
The forestry sector supports over 200,000 jobs in communities across the country. In 2019, it contributed $23.7 billion to our economy, or 1% of Canada's total GDP.
Today I would like to touch on a few things: the ongoing softwood lumber litigation with the United States, our efforts to create greater opportunities abroad for Canada's softwood lumber and wood product exporters, and the role that this industry is playing in our trade diversification strategy.
Let me begin my appearance today by stating unequivocally that the duties imposed by the United States on Canadian softwood lumber are unwarranted and unfair, and they hurt workers and industry on both sides of the border.
Earlier this week, in Canada's first meeting with President Biden, , my ministerial colleagues and our cabinet counterparts in the United States, I raised the issue of softwood lumber duties directly with the president.
I will also be speaking with my American counterpart, the U.S. Trade Representative, directly about this in our first meeting, once she's officially confirmed. The importance of this issue will be front and centre as we work with the new American administration in the months and years ahead.
Canada continues to strongly believe that a negotiated agreement with the U.S. is in both countries' best interests.
[Translation]
Canada continues to strongly believe that a negotiated agreement with the United States is in both countries' best interests.
[English]
We are not sitting idly by. We're taking a team Canada approach, working hand in hand with the softwood lumber industry and provincial and territorial partners on all fronts. We have launched a series of challenges against the initial U.S. duties on softwood lumber through both the WTO and the new NAFTA.
Throughout the multiple iterations of this dispute, we have consistently been awarded legal victories that clearly show our softwood industry is in full compliance with trade rules. While we will continue to pursue these legal avenues, considering our successful track record, we believe our U.S. counterparts will once again find that the most effective resolution to this dispute is a negotiated agreement.
I want all of you to know that our government's efforts go far beyond just the WTO to protect Canadian access to the U.S. softwood lumber market. In addition to U.S. softwood duties, the industry was facing other significant challenges, including fibre supply issues due to pine beetle damage and forest fires. When the pandemic struck, like many industries, the sector also saw a number of shutdowns.
Supporting the industry across government is what we had been doing over this last year. Like many other industries, the forestry sector has had to cope with challenges and restrictions. Yet through these challenges it has demonstrated its resilience and its importance for workers, the economy and, indeed, all Canadians.
It has been vital to our supply chains, producing components for essential household products, including PPE that Canadians have relied on throughout the pandemic, like medical gowns and non-medical masks.
It is heartening to know that the Canadian softwood lumber industry has almost fully recovered from the early challenges of COVID-19. Nearly all the 98 sawmills that closed last year as a result of the pandemic have restarted operations, restoring 96% of the more than 12,000 jobs affected.
Just as it stood by Canadians, our government has always stood by the sector, from emergency support measures like the business credit availability program to the softwood lumber action plan, which is an investment of $867 million to support our softwood lumber industry in response to U.S. import duties. This program has strengthened our Canadian forest sector firms, helping grow innovative technologies, boosting diversification and supporting thousands of good jobs from coast to coast to coast.
The swift actions of this government have allowed the forest sector to better weather the challenges they are facing today.
Trade diversification is an important commitment. It's our government's commitment to the forestry industry that goes far beyond the emergency supports I just talked about.
[Translation]
Our government's commitment to the forestry industry goes far beyond emergency supports.
[English]
As the Minister of Small Business, Export Promotion and International Trade, I'm determined to ensure that our industry and businesses have the tools they need to scale up and to grow across Canada and around the world.
As we lay the groundwork for an inclusive and sustainable long-term recovery, strengthening trade ties and supporting diversification in forestry and all our sectors will be key to generating clean growth and creating jobs.
Canada is proud to be the only G7 country holding a trade agreement with all other G7 partners. Through these agreements and others around the world, our businesses have preferential access to 1.5 billion customers globally.
Our trade diversification strategy maximizes opportunities for Canadian industry created by strengthening existing trade agreements while pursuing new ones. This strategy has set a goal of increasing Canadian exports by 50% by 2025.
For our industry partners, this means finding new and creative ways for them to forge new relationships and opportunities for growth. Through the trade diversification strategy, our government has invested $290 million over five years to help Canadian businesses export and grow in new markets by strengthening the trade commissioner service and enhancing the support it provides to Canadian exporters, including those in the forestry sector.
This isn't just about diversifying what we trade, but also who we trade with. Diversification and inclusive trade is creating opportunities for our world-class forestry sector to access those global markets while ensuring that all Canadians can benefit from its success.
We understand the reality of the forestry-based businesses, which are actively diversifying production towards innovative products such as biofuels and sustainable packaging made from fibre. This is about strengthening traditional forestry-based products and investing in innovation.
:
Thank you so much, Mr. Chair. I'll pick up where I left off.
We are committed to supporting Canadian businesses as they develop partnerships for commercial applications of their innovations, raise capital, and tap into the new global value chains for their products.
Canada's ambitious and comprehensive trade policies are bringing Canadian industry to the world and bringing the world's investment to Canada. We are working to increase international competitiveness of our natural resource industries, including forestry.
Since 2015, the trade commissioner service has facilitated numerous forest-related investment projects to Canada, including into Quebec, Ontario, Alberta, New Brunswick and British Columbia.
[Translation]
Companies are helping generate growth and create jobs. They're leaders in achieving our goals for a more sustainable future.
[English]
Take for example, Sinar Mas from Indonesia. It has invested hundreds of millions of dollars to modernize paper mills in British Columbia, Saskatchewan and Nova Scotia, employing 3,000 Canadians. There is the SONAE Group from Portugal, which announced last year that they are investing $23 million to modernize its facility in Quebec, home of North America's largest particle board manufacturing facility.
These investments are coming from around the globe, from Finland, Japan, Belgium and Indonesia. The entire world is investing in Canadian softwood lumber and its innovative by-products.
The investments we are attracting from around the world and the growth those investments are bringing with them are no surprise. Canada's forestry sector's reputation is world renowned for its versatility and innovation, and perhaps most notably, in our current context, for its leadership in sustainability. Canada's forestry sector is the most sustainable in the world.
As I said earlier, and it bears repeating, the economy and the environment go hand in hand. Our government is committed to supporting our softwood lumber industry and protecting and promoting its reputation.
Our softwood lumber industry takes great pride in being a global leader in sustainable forest management and environmentally responsible forestry. Its commitment to sustainable development and environmental standards is going a long way to secure a more sustainable future for all Canadians. Working together, we will be able to reach our environmental target of net zero emissions by 2050.
Our forestry sector knows what we all know. The time to take action to protect the environment is now. It is not just the right thing to do; it is the smart thing to do.
A great example is the leadership in British Columbia. It has the tall wood building at UBC, the first mass wood, steel and concrete hybrid project in the world. It is taller than 14 storeys.
[Translation]
Another example is in Quebec, where the provincial government is the first in North America to support the construction of a tall mass timber building.
[English]
These kinds of projects offer incredible economic and environmental benefits. This project alone was equivalent to taking 500 cars off the road.
In conclusion, it is clear that we have so much to be proud of with our forestry sector and softwood lumber. Our industry shows leadership on so many fronts, from environmental stewardship to innovation and global trade, while supporting hard-working Canadians and economic growth.
Through all of the challenges facing the industry, our government has committed to continuing our work supporting this vital industry and standing up for the interests of Canadian workers.
We will continue to work closely with provinces, territories, industry and other stakeholders to support and grow the Canadian forestry sector.
Finally, allow me to reiterate here my personal commitment to use every opportunity to raise softwood lumber with my U.S. interlocutors and defend the interests of the Canadian forestry sector, forestry workers and industry supports across the country.
Thank you so much again for the invitation to appear today. I'm looking forward to your questions.
[Translation]
Thank you.
:
Okay. I'll get right to my questions, then. Thank you, Minister.
It's been a long time coming since my initial questions in October 2020 were unanswered regarding the softwood lumber agreement. In 2015, your government stated it was going to get a softwood lumber agreement signed within its first 100 days. We then saw then-president Obama attend our Parliament, but there was no agreement. We have since seen record tariffs on our Canadian lumber producers of up to 20%—and over 20%, actually.
From an article in December 2019, that inaction cost Canada over 140,000 jobs. That was pre-COVID. They're logging, trucking and mill jobs, including many in my own northern B.C. communities of Mackenzie, Prince George, Fort St. John and many others. It cost $4 billion in revenue for B.C. alone. We saw that in August 2020, which you referred to, the WTO unanimously ruled with Canada, then the U.S. appealed that decision in September 2020.
I questioned the bureaucrats in October 2020 if they could update us on this important file. Now I'm going to be more specific, understanding that you recently had a bilateral meeting with the new Biden administration. Was the softwood lumber agreement or tariffs on softwood lumber specifically brought up in the bilateral meeting between you, the and President Biden? There was no public mention of that, or that our forest sector at all had been discussed publicly, for that matter.
:
Thank you so much to the honourable member for that important question.
All the way along, our government has been absolutely steadfast at standing up for the softwood lumber industry. It is a positive result that we have seen where consistently it's been reaffirmed that Canada is trade compliant. We will need to continue to vigorously defend the industry, but at the same time, we also want to create the right conditions to support, to invest and to attract investment to this important sector and many of the new small and medium-sized businesses that absolutely are being created.
Through the trade commissioner service, we're working with business certainly in British Columbia and across the country, where they're finding markets to export into. We are finding some really promising opportunities in countries where we already have trade agreements, like in Japan or in Vietnam through the CPTPP, in Germany though CETA, as well as South Korea, where we have a bilateral agreement with that country for our extraordinary wood products, for our innovative forestry products.
We're going to continue doing that work in investing in our Canadian businesses so that we can help them diversify and help them grow, anchored with jobs in Canada so that we can have that continued vibrant forestry sector, while at the same time, defending them through the other channels, whether it be through the dispute settlement mechanisms or at the WTO.
:
Absolutely, I'm happy to.
They are Canada's best business development and sales force all around the world, operating in a total of 1,100 offices. For this sector in particular, let me just share with you some of the activities they've already pursued in an effort to open up markets for Canadian businesses in the forestry sector.
They have had to pivot, just as many businesses and industries have, and have gone virtual. The trade commissioner service has taken businesses to Spain, actually attending the wood-building and bioeconomy webinar and showcasing Canadian low-carbon energy-friendly wood-building solutions and bioproduct development. We've also gone virtually into Brazil, attending the international workshop on a bioeconomy. This is helping some of the most advanced and promising bioproducts and bioprocessing technologies—Canadian innovations, Canadian forestry and wood product innovations—into commercialization and deployment in Brazil and elsewhere in South America. We are also going to Japan in March of this year to promote the use of wood-building systems in hotel construction in that country.
These are but a few things. If I had more time, I would keep talking about the terrific work that our trade Canada team is doing to help Canadian businesses start up, scale up and access those new markets.
Thank you, Minister Ng, for your presentation.
Honestly, I get the impression that softwood lumber is often used as a bargaining chip in trade agreement negotiations. I'll tell you why I get that impression.
Not too long ago, as part of the Canada-U.S.-Mexico agreement, or CUSMA, Canada's chief negotiator appeared before our committee. I asked him why the softwood lumber issue hadn't been addressed. He told us that it wasn't a priority for them at that time. Canada's chief negotiator told us this.
Also not too long ago, when I was talking to him about softwood lumber, the Parliamentary Secretary to the Leader of the Government in the House of Commons, as part of the study of Bill , told me personally that trade agreements involve compromises. This leads me to believe that, when Canada negotiates trade agreements with the United States, compromises are often made with regard to softwood lumber.
I get the impression that you've never really fought to ensure that our American neighbours respect this industry. I'd like you to tell us more about this.
:
Thank you, Minister Ng.
I want you to express your wishes. However, I don't want wishes, I want measures. Measures can be introduced immediately.
In 2006, there was a completely unacceptable ransom demand, where $1 billion in the agreement with the United States was left on the table. This $1 billion was paid by Quebec's forest industries.
However, the forestry sector is now calling for a better liquidity program. Unfortunately, right now, the major players must be close to technical bankruptcy to access the program in place. All the forest industry representatives that I've met with have told me that this program is almost obsolete.
Without getting into negotiations with the United States, you can implement measures right now. I'm wondering why you aren't doing this.
The forestry sector is legitimately calling for a proper liquidity system. Why aren't you getting this done?
:
Thank you for that question.
During the pandemic, we know that the forestry sector has been hit, just like others. The broad-based programs have been available. Certainly, the liquidity program in the business credit availability program is available to the sector. The wage subsidy program, which is saving hundreds of thousands of jobs—well, millions of jobs—across the country, certainly including the forestry sector, is there and available.
I would also point out that this government is absolutely supporting the forestry sector in Quebec with, this year alone, almost $13 million for the forest innovation program, almost a million dollars for the strategic partnerships initiative and more than $2.3 million through the expanding market opportunities. We are supporting the Quebec sector, and we continue to support Quebec's workers—very, very important.
As I said earlier, our commitment, my commitment, to raise this with the U.S. interlocutor will be done once my counterpart is confirmed. I'm looking forward to that conversation.
:
Thank you, Minister Ng, for coming back to the natural resources committee. It's like old times. It's good to see you here.
As you mentioned, the forestry industry is so important. It's important in my riding, in my province of British Columbia, and of course, across the country. This softwood lumber dispute has been going on, I wouldn't say all my life, but for a long, long time. In 2017, I went down to Washington, D.C., with Tracey Ramsey, who was the NDP's critic for international trade at the time. We met with a lot of senators and congressional representatives about this. What struck me, first of all, was that some of the strongest, most strident voices of protectionism down there came from Democrats, so I'm wondering what difference, if any, this new administration can make.
I also heard from representatives who were concerned about the softwood lumber dispute because it was hurting their industries, as you mentioned. Right now we have lumber prices north of a thousand dollars per thousand board feet. That's hurting not just Canadians—I have a friend who's building a house and the price just went up dramatically—but it's also hurting American businesses, retail businesses, wholesalers and consumers. John Fowke, who's the chair of the U.S. National Association of Home Builders, said that these prices are just unsustainable. He's really pressing the administration down there to get this solved.
This would be my first question. What pressure are you exerting on the administration, using those people who are with us in the United States, to solve this?
:
Thank you so much for that question.
As the minister responsible also for small business, I have an absolute commitment and priority to ensure the viability of Canada's small businesses in all sectors, and particularly here in the forestry sector, to ensure that, certainly during COVID-19, they have the supports they need.
Underlying that, we have an opportunity to also help those businesses grow and anchor that growth in Canada, to create really good jobs in Canada and to access those international markets.
Yes, we have a commitment to work with the United States so that we can pursue a negotiated settlement, defend the interests of Canadian softwood lumber with vigour, and certainly help with that diversification in supporting the growth of this incredible Canadian technology and environmentally sustainable capability for these Canadian small businesses.
I think it's all of those things that will ensure a competitive and vibrant sector. That can only be good for Canadian workers.
[English]
Thank you Minister, for being here. I'm happy you were able to join us.
I'm the MP for Sudbury, which is in mining, obviously. I'm from Kapuskasing, a pulp and paper town. My dad was a welder there. I'm a bit like Mr. Cannings in that I grew up with trade disputes with the U.S. being something that affected us very often.
It's a challenging file. As we all know, we need a partner on the other side to sit down with. When they're not there it's hard to negotiate with an absent partner. I know that's what happened in the last four years. I know we were ready, willing and able to engage, but when there's no partner to engage with it's quite impossible.
I want to congratulate you and thank you for your trade diversification strategy. We understand that because of the challenges, certainly with the one major trading partner, we need to diversify. That's something I've been hearing for a long time.
The measures and the team you put in place are very promising. I think really good things will come from that for all of Canada.
I want you to touch on your views of the importance of this trade diversification strategy, the significant amount of funding and supports that you have put in, and why you believe this will give us the results we're looking for.
:
Thank you so much for that important question.
This sector is really important to so many communities coast to coast to coast across Canada, including Kapuskasing and northern Ontario. We know this sector is also an incredible leader in responsible forest management and sustainable products.
Canadian businesses, particularly small and medium-sized businesses of which there are many in this sector, especially those that are emerging, make up 99% of all businesses in Canada. Today, 12% of those businesses are exporting. There is the opportunity not only to export more, but also to grow more into those markets we have access to. Canada is very enviable as the only G7 country with a free trade agreement with the other seven countries, and has access to a billion and a half customers around the globe.
We need to help our businesses and make the investments in them for this growth. Whether it's getting access to capital, or access to the supports and market research into where they may grow, is what team trade Canada is doing. Whether it is the trade commissioner service and the investments of $290 million, whether it's CanExport....
We have pivoted, by the way, as well, during the course of COVID-19 to make sure that businesses have access to that support to help them grow. This means attending virtual trade shows. It's dealing with some of the barriers that might have come up as a result of exporting in this COVID environment and helping them deal with those kinds of costs. It's for the innovative forestry sector with the IP they are developing, and paying for their IP and their patents.
There is a range of supports to help our businesses grow into those international markets.
:
I can do even better. I can share some examples.
There's a great New Brunswick company that is commercializing its wood biocomposite solutions in packaging. It's substituting plastic, so it's sustainable packaging. They use e-commerce platforms, and the trade commissioner service is helping them get into the U.S. and the European markets.
Another manufacturer of wood-sourced polymer from Alberta is benefiting from the trade commissioner service. They're helping them look for commercial partners in European companies so they can integrate some of those materials into car parts and interior finishing in manufacturing.
There are B.C. companies that are specializing in wood construction, like the ones in Richard's riding. They're innovating. The TCS is helping them get into markets not only in North America, but also in Taiwan, Japan, the Philippines and Australia.
Wood pellet manufacturers in Quebec are being helped to expand their distribution into Italy.
These are only a handful of opportunities. We know that markets in Japan, Vietnam, Germany, South Korea, Indonesia.... These investments are coming into Canada, but they're also opportunities for growth for exactly those companies that are going to create jobs anchored in Canada, and help to grow middle-class jobs.
This is the road to recovery, but it's actually long-term growth in this very important sector of our economy.
:
On a point of order, Mr. Chair, out of respect for the minister's time, I wanted to wait until the minister was gone to address this issue. I am a bit concerned about a decorum issue in relation to Mr. Weiler's intervention and interruption of Mr. Patzer's line of questioning.
I have been consulting O'Brien and Bosc on committee procedures on this matter. It says that it is the sole prerogative of the chair to interrupt members if their observations or their questions are off topic.
Mr. Chair, I would encourage you to state to the committee that it is not the job of other members to use points of order, and in this case, the inappropriate use of a point of order. The purpose of a point of order is to raise an issue regarding the violation of a standing order of a committee, or not usual practice of the committee.
However, it is the practice of a committee that if somebody is asking a question that's off topic or making an observation, that is the sole prerogative of the chair. I would not want to see any member of this committee usurping the role of the chair in making that decision. You can imagine a situation where any member of this committee could raise repetitive points of order about members stating things off topic. The Speaker of the House of Commons has granted a great deal of leeway in speeches on topics to get back to the point.
I would encourage you, Mr. Chair, to not allow your position to be usurped by members. Maybe in this case, it was an honest intervention, but it is your role, Mr. Chair, not the role of members, to interrupt our fellow members when they have very limited time to ask questions.
:
Thank you, and thank you, honourable member, for your question.
Mr. Chair and members of the committee, I'm Rosaline Kwan, the director general for trade sectors at Global Affairs Canada. I myself am a trade commissioner and part of the trade commissioner service. I'll quickly say thank you to those of you who have expressed your appreciation for our service in your work with us and in the work of your companies with us. We're always very happy and committed to supporting Canadian companies in the forestry sector.
As my colleague, Arun Alexander, mentioned, trade diversification is our priority, and as very well elaborated by , we look at trade diversification in a number of ways. She mentioned the markets, whether they're in Europe or Asia or elsewhere. We also work with Canadian companies to look at the wonderful and new innovations that they have and that they're working on to help them take advantage of those opportunities in the marketplace globally. I should also mention that as part of the trade commissioner service, we have regional offices across Canada as well as over 160 missions around the world. Our regional offices across Canada work with companies in their regions to be able to support their businesses.
In the forestry sector, of course, our trade commissioners work very closely with those you might know in the sector from your areas or constituencies. That's more general on trade diversification in terms of markets.
I also wanted to touch a little bit on looking at new and innovative products using Canada's innovation capacity through our forestry sector, which has been impressive, as the minister mentioned, not only through the pandemic but also in terms of looking at biopolymers and bio-based composites, biofuels, to be able to take advantage of the growing opportunities around the world. Part of our job is to help support them to identify those opportunities and to be able to tap into those opportunities so they themselves can get into the supply chains of opportunities around the world.
Through that, the also talked about some of the work that we do, whether it's virtual trade missions, whether it's working directly with companies, whether it's through the CanExport program, through a number of tools that we have to be able to help further the objectives and support the important companies in this sector across Canada. Of course, we continue to place this as a priority, as it was clearly stated, in terms of how we help to support trade diversification for the forestry sector regarding Canadian companies.
:
Thank you, honourable member. Perhaps I will begin, and then I might turn to my colleagues to add to my response.
I understand your point that it seems as though there has been an interminable cycle of lumber disputes with the United States. I think softwood lumber one goes back to the early 1980s and we're now in the fifth iteration. I've been involved, and I know Michael Owen has been involved, at least since the early days of softwood lumber six. It is a difficult issue.
What I can say is that, in negotiations, Canada is always open and willing to enter into discussions and negotiations with the United States for any agreement that is fair to our industry and which will bring benefits to our industry, our workers and our communities.
In negotiating such an agreement, we would put everything on the table, including the possibility of recognizing Canada's stumpage system, which as you say is based on public lands, as a key priority. We would like to end these interminable softwood lumber disputes as well, so anything we can do to resolve this issue on a longer term basis is a key priority for the government.
Maybe I'll ask my colleague, Mike Owen, the lead litigator, to add to this.
It's a great question. It's something that the department has thought about over numerous cycles of softwood lumber, since I've been involved in the file, since 2001.
I can tell you that it's very difficult, what we're doing here, with our U.S. domestic proceedings, the countervailing duty investigations, the anti-dumping investigations that any U.S. industry has a right under U.S. law to bring.
I think one of the impediments we face in coming to a final conclusion is that the U.S. coalition, the U.S. lumber industry, has a right to sue under U.S. law. In order to even reach a softwood lumber agreement like the one we had the last time, they have to suspend that right or at least come to the table and indicate perhaps that there's going to be no injury or that they're not going to move forward with duties.
That has always been one particular difficulty in trying to reach a final solution where we wouldn't have to go back to softwood lumber six or softwood lumber seven. I don't even like thinking of that.
To answer your question, it's one of the key problems—
Thank you, everyone, for being here. This has been very informative, and it's great to have the expertise you're bringing to the table as we conclude the study.
Mr. Owen, you said that you've been involved with this file since 2001. That's the year I graduated from law school, and I'm now 47 years old. It has been a long haul for you to work on that file. It's pretty much like a job for life. I'm sure you're trying it not to be, but that's the reality. What I'm getting at is that the context you provided us was very important, which is that the system they've made in the U.S., the laws they've passed and the structure they have, has made it so that the industry can sue any time it wants and stop the process.
It's extremely difficult for us as Canada, no matter what political party, to really put a structure in place so that we don't need to deal with this and you can move on to another file. For the purposes of this study, where do you think it ends, and does it? If it doesn't, how do you see this unfolding in the next five to ten years?
:
I was going to pass it to Mike, but I'll try it quickly.
As I alluded to earlier, British Columbia adopted an auction system, which was partially adopted in an effort to make reforms that were hoped would reduce the potency of U.S. arguments that the B.C. system is providing a subsidy.
Mike and his team did an excellent job at the WTO to show that the B.C. system offers fair prices when compared to a reasonably comparable benchmark. That is why we were ultimately largely successful, both at the WTO and using those same arguments as part of the annual review process to have the duties cut by more than half in that first annual review.
Certainly, it's very important that the provinces are cognizant of this issue when formulating their forestry practices. Obviously, they still have broad leeway in how they do that, and we work with them to make sure we understand it fully so that we can bring the best arguments forward in our dispute settlement.
As I said, I think Mike and his team had some great success, both at the WTO and with respect to the current duty.