Thank you.
The softwood lumber agreement provides a framework, and within that framework is a process that's very important for industry and governments—the Canadian, the U.S., and provincial governments—in a period, as you pointed out, of great instability for markets, industries, workers, and communities. It does it this way. It was anticipated, in negotiating and drafting the agreement, that there would be disputes under the agreement. This morning we received the first report from the London Court of International Arbitration on the first arbitration filed under the agreement. It was a decision that went in favour of Canada on the one hand and in favour of the U.S. on the other hand. There were two issues—Canada won one of the arguments and lost one.
Having said that, the arbitration process under the agreement is a very efficient process. It provides results in a very objective and timely manner. The alternative would be court litigation within or outside the agreement, and that is not a very efficient and objective process. If we did not have the agreement, my premise to the group today is that we would be in litigation, and that litigation would drive import duties in the U.S. far in excess of the current border measures we have in place today. Alberta and B.C. pay a 15% export tax; Ontario, Quebec, Manitoba, and Saskatchewan have a 30% market share quota and a 5% tax. If we were in litigation, given where the dollar is, given where markets are, I expect those litigation rates would be in excess of 30%. So it's a matter of which alternative you want to live under.
My recommendation to this committee is that the federal government, the provincial governments, and industry—it's up to industry as well—not participate in what I would call behaviour that would threaten the longevity of the agreement.