Mr. Speaker, at the onset of my speech, I want to state that my colleague from the Bloc has worked very tirelessly on this issue, and his constituents back home should be very proud of the work that he has done.
As the hon. member may know, the federal and provincial governments, together with the industry, have worked closely throughout this dispute. Excellent cooperation stems from our mutual commitment to defend the interests of affected Canadian lumber companies and the people they employ and the communities they are located in.
When the U.S. department of commerce imposed 27% countervailing and anti-dumping duties on imports of Canadian softwood lumber in May 2002, following the expiry of the softwood lumber agreement, all levels of government, together with the industry, joined to challenge the U.S. findings as unfounded and protectionist. Together, we have pursued a two-pronged strategy initiating NAFTA and WTO challenges of the U.S. duty actions and engaging in discussions to find a durable resolution to this dispute.
The federal and provincial governments and industry have worked together to challenge the preliminary determination of the subsidy in the WTO, and I am pleased to note that we prevailed in that challenge. We are cooperating in our challenges of the final determinations of the subsidy and the threat of injury before both the WTO and NAFTA, and are confident that we will prevail in these challenges too. Canada is also challenging the final determination of dumping before the WTO, while the Canadian industry has taken the lead in challenging the dumping actions before NAFTA.
In the NAFTA challenges, separate panels have ruled that the dumping, subsidy and threat of injury determinations are inconsistent with U.S. law. The panels have ordered the United States to issue new determinations.
The other half of our strategy has been one of trying to find a way to resolve this dispute once and for all, and again, the level of cooperation between industry and governments has been remarkable.
The government has worked closely with the provinces during discussions with the U.S. government on a department of commerce policy bulletin that would guide changed circumstance reviews of the countervailing duty on Canadian softwood lumber. Throughout these discussions, which focussed on provincial policy, we were able to maintain a united Canadian front, and we are continuing to work together to press the U.S. to include a Quebec example in the policy bulletin.
Forestry largely falls under provincial jurisdiction in this country, and it will be up to the provinces to decide whether reforms in their forest management and timber pricing programs are required and to seek a changed circumstance review.
The government has been working hard to find a resolution to the dispute in the form of an interim measure that would replace U.S. duties pending provincial policy changes and changed circumstance reviews. Throughout these efforts, we have worked closely with provincial governments and the Canadian industry, and we will continue to do so.