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Port Hawkesbury Paper ruling could see mill paying millions in duty

Port Hawkesbury Paper ruling could see mill paying millions in duty

HAWKESBURY: United States Commerce Department will release a significant decision on whether exports from the Port Hawkesbury Paper mill will have to pay duty of 20 per cent. The investigation flows from an unfair competition complaint brought under the North American Free Trade Agreement (NAFTA) by a few American mills.
It sets the way to levy duties on supercalendered paper, glossy paper used for magazines and catalogues. Port Hawkesbury Paper has been setting aside money to pay duty which could cost up to $50 million a year. A preliminary ruling this July said the mill received subsidies in the form of discounted power rates and a $124-million provincial aid package when it changed hands three years ago.
Both the mill and the province have challenged the ruling, arguing power rates — which account for 70 per cent of the duty — are not a government subsidy. Port Hawkesbury Paper says the commerce department miscalculated its electricity costs, and included subsidies given to the previous mill owner. The final word on the dispute is expected to come from the International Trade Commission in late November.