WASHINGTON — U.S. paper product companies and workers claimed a victory with the International Trade Commissioner on unfair trade competition from Canada.

The ITC voted to impose penalties on Canadian paper imports for unfair subsidization.

The ITC action will put a countervailing duty order on Canadian paper imports to hold them accountable for receiving unfair subsidies that are damaging the American paper industry.

A Canadian official said an appeal will be made under the North American Free Trade Agreement.

Eighth District U.S. Rep. Rick Nolan and Sens. Amy Klobuchar and Al Franken — all Democrats — testified before the ITC on the issue in October.

They pushed for a crackdown on Canadian companies that are receiving unfair subsidization of Canadian supercalendered paper imports by imposing duties to offset the significant amount of subsidies that have unfairly benefitted Canadian companies.

“The ITC has voted to protect good American jobs and American workers at the Duluth Paper Mill from unfair competition from Canada — competition in the form of unprecedented amounts of government-subsidized supercalendered paper flooding the U.S. marketplace and depressing domestic prices.,” Nolan said.

“Today’s decision to impose countervailing duties on imports of this product gives hard working Americans and the great company they work for a fair chance to compete and win in the marketplace. And it prevents terrible economic damage from being done to employees of the Duluth Paper Mill, to their families, to the businesses they patronize, and to the entire Duluth community.”

Sen. Klobuchar said the ruling is good news for loggers.

“Our loggers in northern Minnesota and workers across the paper industry have proven that they can compete with anybody in the world on a level playing field,” Klobuchar said. “But when foreign imports receive unfair subsidies, it puts their jobs in jeopardy.

“Today’s action will help crack down on illegal trade practices, and I’ll keep fighting to ensure our businesses are competing on a level playing field that protects American companies, workers and their families,” said Sen. Klobuchar.

Exports of supercalendered paper from Canada to the United States were valued at $959 million last year, the Canadian government said.

Under a decision released last month, the U.S. Department of Commerce said it would impose duties ranging from 17.87 per cent to 20.18 per cent against Canadian mills.

The U.S. ruling affects Nova Scotia’s Port Hawkesbury Paper, which has been hit with a 20.18 per cent duty. As well, Montreal-based Resolute Forest Products will have to pay a duty of 17.87 per cent. Other Canadian supercalendered mills, such as the J.D. Irving mill in New Brunswick and Catalyst Paper of British Columbia, face a duty of 18.85 per cent.

Canada’s international trade minister Chrystia Freeland, issued a statement saying an appeal under the North American Free Trade Agreement will determine if the countervailing duties are being applied in accordance with the laws of the United States, The Canadian News reported.

“Canada believes that the U.S. Department of Commerce erred in calculating subsidy rates on Canadian exports of supercalendered paper,” the minister said. “Canada is exercising its rights under NAFTA Chapter 19 and requesting a panel review in order to defend the Canadian industry.”

The latest decision was greeted with disappointment in Nova Scotia, where the minister responsible for trade called the duties “unfair.”

The Canadian News also reported that Michel Samson said the issue for the Cape Breton mill centers around power rates set by the province’s regulator. The mill is getting electricity at a reduced rate, however, Samson said U.S. officials don’t understand the role of the Utility and Review Board, which is an arms-length organization independent of government.

The Nova Scotia government has said the cheaper power rates from Nova Scotia Power, a privately owned utility, don’t constitute a subsidy because, under U.S. rules, subsidies must come from government entities.

“There continues to be a misunderstanding,” Samson said. “We will be joining Port Hawkesbury Paper and the government of Canada in launching a NAFTA appeal process of this decision.”

Samson said the province had so far spent $2.3 million fighting the ruling and he expects that figure to climb as a result of the NAFTA appeal.

“There will be future costs, yes, and the frustration with the NAFTA process is that it could take up to two or three years,” he said.