Canada to challenge U.S. softwood lumber duties

OTTAWA, Aug 22 (Reuters) - Canada will challenge what Ottawa described as “unfair, unjust and illegal” U.S. duties on Canadian softwood lumber products, the trade ministry said on Tuesday.

The softwood lumber tariffs are the legacy of a decades-long trade dispute over the structure of Canada’s timber sector that could not be resolved when a quota agreement expired in 2015.

U.S. producers say the Canadian exports are unfairly subsidized and in July, the country’s commerce department ruled that most Canadian softwood lumber would be subject to a 7.99% tax.

Canada on Monday filed notices of intent to commence judicial review regarding those duties, the trade ministry said in a statement, adding that Ottawa remained willing to discuss a negotiated outcome with Washington.

“For years, the United States has imposed unfair, unjust and illegal duties on Canadian softwood lumber, hurting Canadian industry and increasing housing costs in both countries,” Trade Minister Mary Ng said in the statement.

“Canada is taking the necessary steps to actively defend the interests of our softwood lumber industry and the workers and communities that rely on it.”

The United States has said that Canadian timber harvested from federal and provincial lands with low government-set stumpage fees constitutes an unfair subsidy, while most U.S. timber is harvested from private land at market rates.

The U.S. Commerce Department did not immediately respond to a request for comment.

Reporting by Ismail Shakil in Ottawa and Urvi Dugar in Bengaluru; editing by Susan Heavey and Devika Syamnath