Catalyst Paper has fought its way out of what it considers an unfair duty on some of its paper entering the U.S.
The company announced Nov. 21 that the U.S. Department of Commerce issued preliminary results in its expedited review of Catalyst, finding that Catalyst received a negligible amount of subsidies during the applicable period of review.
That means, at least from this early report, Catalyst’s exports of supercalendered paper into the U.S. market would not be subject to countervailing duties.
Joe Nemeth, Catalyst president and CEO, was pleased.
“Today’s decision confirms that Catalyst did not receive any material subsidies from the Government of Canada or Province of British Columbia,” he said.
Catalyst requested the review, which looked specifically at the 2014 period, after the DOC imposed countervailing duties on imports of that paper from Canada in December 2015.
What had concerned the company was that, without individually investigating Catalyst, the DOC put the pulp and paper giant into an “all-others” group, saddling it with a countervailing duties rate of 18.85 per cent, based on what was charged to two other companies.
Having such a rate assigned to Catalyst “painted an inaccurate picture of our business, and the manufacture and export of our high-quality paper products,” Nemeth said. “Catalyst has paid over $18 million in duties and legal costs since the countervailing duties were imposed. These costs have imposed a burden on Catalyst and our effort to improve our financial performance and competitiveness.”
However, the final results, which will come in after comment from all interested parties, will not be issued until February.
Provincial Forests, Lands and Natural Resource Operations Minister Steve Thomson also issued a statement about the findings.
“As we expected, the expedited review revealed that Catalyst did not receive any measurable government subsidies during the year investigated (2014) and if the U.S. Department of Commerce upholds this decision in their final determination, Catalyst will be excluded from further proceedings in this case,” he said.
But, the minister said, Catalyst has been hit as a result of the tariff.
“While we are pleased with the results of the preliminary determination, it does not alleviate the economic hardship Catalyst has endured in paying duties since August 2016, nor the legal expenses participants paid to defend against these unwarranted allegations,” Thomson said, adding that his government is looking forward to February in the hope that Catalyst will see the unfair duties refunded.