OTTAWA – The Conservative government must act immediately to ensure the Canadian pulp and paper industry is protected in light of a new $8-billion U.S. tax credit that is putting the competitiveness of the Canadian industry in jeopardy, said Jean-Claude D’Amours, Member of Parliament for Madawaska-Restigouche.
Iggy and co. are complaining about an alternative tax fuel credit contained in the 2005 U.S. highway bill that allows U.S. paper mills to cut production costs by $1,000,000,000s, thus undercutting operations in this country. The release is quite correct in noting that the subsidy could jeopardize Canada's pulp and paper industry.
Now, there are a couple of ways to proceed. One, which the Tory government has been pursuing, is to lobby the Obama administration/U.S. Congress to have the credit rescinded. There is support for this move South of the border, where the credit is seen as a bit of an embarrassment, although the U.S. paper lobby has killed action for the time being.
Another path forward is to replicate the subsidy here, which is an alternative proposed by NDP John Rafferty. Such a move would be lunacy, for the tax credit, though it is touted as a "green measure", actually pays companies to increase their carbon footprint by adding diesel to the cleaner fuels they already use to run their mills. (Although I should say that mirroring the tax credit here is only one of the measures Mr. Rafferty has taken into consideration with his private member's motion.)
So good on the party for bringing this one up. The pulp and paper industry doesn't have a whole lot of friends, and I don't usually count myself among them, but they are in this case getting screwed over in a most perverse manner.
A reader notes that the LPoC began agitating on this issue several weeks ago.