It look a long time for an issue that has been blasted across the front of Canada’s leading newspapers since mid-August to earn a place in one of the United States’ most influential dailies.
On Aug. 27, Joseph Nocera, who happens to own a summer house in Quebec and counts Canadian businessmen among his friends, delivered a wake-up call to readers of his business column in the New York Times.
Referring to an “unusually nasty dispute” between Canada and the United States over softwood lumber, he uncovered a possible energy twist to the lumber feud.
Sen. Pat Carney, of British Columbia, told Nocera that rather than imposing duties on imported American goods — wine and juice have been bandied around — and hurting Canadian consumers, she wants Canada to start “scrutinizing” U.S. investment in Canada.
In particular, she listed Kinder Morgan’s planned takeover of Terasen, which has yet to be approved by the British Columbia Utilities Commission, although Industry Minister David Emerson has indicated federal competitions and investment legislation are not likely to be an obstacle.
Nocera suggests that slowing down the takeover could prompt Kinder Morgan president Richard Kinder to “whisper” in the ear of his close friend President George W. Bush.
Carney had earlier proposed in a Toronto newspaper that Ottawa should stall all future investment in Canada’s energy sector on security concerns.
Other retaliatory measures
Other rumblings about retaliatory measures have also roped in plans to build an Alaska gas pipeline through Canada to the Lower 48.
Nothing official has emerged from the Canadian government, but the idea was planted by Don Whiteley in his Vancouver Sun column.
He suggested the Canadian government might establish a commission to “examine whether it is in Canada’s best interests to allow a country that reneges on its international obligations to have access to a resource corridor through Canadian territory.”
Whiteley also recommended that regulatory processing of the Mackenzie Gas Project pipeline and oil sands pipeline proposals by Enbridge and Terasen should get preferential treatment over the Alaska project.
However, Canada could see some of the wind taken out of its sails. Federal officials confirmed Aug. 30 that a World Trade Organization panel has made a confidential interim ruling that the United States has complied with international trade law in collecting C$5 billion of duties on Canadian softwood to “counter the threat of material injury” to the U.S. lumber sector.
A final ruling, which is not expected to vary from the interim finding, will be made public in October
Whatever steps the government of Prime Minister Paul Martin takes, the bad blood between Ottawa and Washington keeps reaching a new crescendo.
The latest sound of fury occurred Aug. 26 when senior federal cabinet ministers lashed out at U.S. ambassador David Wilkins, who called for a truce in the “emotional tirades” and a return to the negotiating table.
The response from Emerson was almost unmatched in its official fury when he described the United States as “hypocritical” and a “bully.”
A former chief executive officer of a forestry company, Emerson said his experience during five years of attempts to resolve the softwood lumber dispute was that the United States uses “punitive duties and whatever aggressive actions they can take to force us to our knees in a dispute where legal rulings have shown time after time that we are in the right.”
He urged Canadians not to allow “the bully to basically mop the floor with us.”
As a “small trading economy,” Canada must decide whether we are going to “stand together” in the feud, Emerson said.
In an appearance on a TV political panel on Aug. 28 he said Canada has to “make sure our long-term interests are secured and that could involve some short-term pain.”
Special session of Parliament possible
Federal Opposition leader Stephen Harper, a staunch ally of the United States on a wide range of issues, including the Iraq war, said Wilkins was “way out of line” and called on Ottawa to get tougher with the United States without destroying the lines of communication.
Martin said his cabinet is discussing what goods Canada might hit with retaliatory trade tariffs.
A spokesman in Martin’s office said an early recall of Parliament is possible because of the “critical importance to Canada’s national interest” of the softwood dispute.
Jack Layton, leader of the federal New Democratic Party, said a special session of Parliament would “certainly send a strong message to the United States.”
He also said Canada should impose duties on oil exports if the United States refuses to change its position on lumber.
