Mr. Speaker, as hon. members are aware, yesterday the London Court of International Arbitration tribunal issued its final decision with respect to use of the adjustment factor in the calculation of the volume of exports to the United States.
In March 2009, the tribunal had ruled that Canada had breached the adjustment factor of the softwood lumber agreement. Canada applied the adjustment factor to some provinces beginning in July 2007, but the tribunal ruled that it should have been applied since January 2007.
In April 2009, Canada offered the United States a payment of $46.7 million to cure the breach. This payment was rejected by the United States, at which point Canada requested that the tribunal rule on whether the proposed payment in fact would cure the breach.
Yesterday, Canada's proposed lump sum payment was rejected by the tribunal and Canada was ordered to impose compensatory adjustments to Canada's export charges, in effect to collect that back tax.
The tribunal sent a strong message that the export charge should be collected on a first-to-ship basis, and should be applied to Quebec, Ontario, Manitoba and Saskatchewan until the amount of $68.26 million has been collected.
As members are no doubt aware, the United States is currently imposing an import tax of 10% at the border. In order for this tax to be removed, Canada must comply with the tribunal's ruling.
The Government of Canada is disappointed that the tribunal did not accept Canada's proposed solution to cure the breach. We continue to believe that our offer to pay $46.7 million was fair. However, there is no further route for appeal.
I have consulted with the provinces and have received their support to comply with the tribunal's decision.
We remain committed to the success of the softwood lumber agreement. This agreement has brought stability and has returned nearly $5 billion to the industry.