A recent decision by U.S. officials to increase import duties by nearly 20 per cent on glossy paper could signal a change at Catalyst Paper Corporation’s Powell River mill.
Currently in a trade dispute with the U.S. Department of Commerce (DOC), Catalyst may need to move away from selling the glossy product to American buyers and look for new markets and to selling new products, said Fred Chinn, Powell River operations manager.
“The duty costs us a bit under a million dollars every month,” confirmed Chinn at a Catalyst community stakeholders’ meeting earlier this month.
In July, DOC imposed an 11.9 per cent per tonne import duty on the glossy paper, called super-calendered, used in products like magazines, catalogues, corporate brochures and advertising inserts.
U.S. paper companies allege that Canadian provincial governments are helping to subsidize four Canadian paper producers, including Catalyst.
“Catalyst rejects the allegation that we’ve received government subsidies, and we’re confident that a full and fair investigation by the U.S. Department of Commerce will confirm this,” Joe Nemeth, Catalyst CEO, said in a media release.
Following the DOC decision, the B.C. government issued a statement in support of Catalyst.
“We are very disappointed with the continued lack of consideration of Catalyst in this investigation,” International Trade Minister Teresa Watt said. “We are confident that a full investigation of Catalyst will confirm they received no government subsidies.”
The Richmond-based company claimed the DOC did not examine Catalyst individually, instead looking at two mills in eastern Canada, and its rate was an average of the two other mills’ duties.
Catalyst further claimed the DOC again did not examine Catalyst’s operations individually in its Oct. 13 final decision, which resulted in a further seven per cent increase.
The company has requested a review of the DOC decision.
