Tax on lumber deal holdouts

[CHIMO]

VANCOUVER — The federal government plans to levy a 19 per cent special tax on lumber companies that withhold their co-operation with the newly signed softwood lumber deal with the United States, The Canadian Press has learned.

A federal official confirmed Tuesday the tax will be imposed in a way that penalizes lumber exporters who refuse to sign a waiver that allows Ottawa to leave about US$1 billion in lumber duties in American hands after the agreement comes into force.

Under the deal, signed Tuesday by International Trade Minister David Emerson and U.S. Trade Representative Susan Schwab in Ottawa, Canadian exporters will get back about 80 per cent of the roughly US$5 billion in punitive duties they’ve paid to U.S. Customs since May 2002.

The deal requires companies that are due refunds to sign waivers allowing Ottawa to kick money back to the Americans because otherwise they would be entitled to a 100 per cent refund.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1158097811749&call_pageid=968332188492&col=968793972154

One inch closer to the Bush slush fund.

Watch out for the blow-back in the future.