Energy exports to US enter Canada campaign fight

By Allan Dowd

VANCOUVER, British Columbia (Reuters) – The opposition New
Democratic Party brought a lingering trade dispute into the
Canadian election campaign on Saturday, saying Canada should
slap a duty on energy exports to the United States to force an
end to U.S. sanctions on softwood lumber.

NDP leader Jack Layton, campaigning in British Columbia, a
lumber-producing province that could be vital in the election,
said Prime Minister Paul Martin’s Liberal government had not
been tough enough in the softwood dispute.

Canada is the top energy supplier to the United States,
taking into account both crude oil and natural gas, and Layton
said it should impose duties on its energy exports until the
United States honors its treaty obligations on lumber.

Canada has accused the United States of ignoring North
American Free Trade Agreement rulings against the softwood
tariffs imposed in 2002, and demanded Washington return the
more than $4 billion already collected.

“What we need to do is stand up for ourselves when we’re
unfairly treated,” Layton told reporters in Vancouver.

The United States accused Canada of subsidizing its lumber
industry, a charge the Canadians deny. U.S. officials also say
Canada has misinterpreted the NAFTA panel rulings.

Although the left-leaning NDP is the smallest of Canada’s
four political parties in Parliament, it played a key role in
propping up the minority Liberal government until it collapsed
last month and the election began.

Two polls published on Saturday said Canada was heading for
another minority government, with the Liberals holding a narrow
lead over the main opposition Conservatives. Canadians will
vote on January 23.

Conservative leader Stephen Harper, who was also in British
Columbia on Saturday, said the NDP’s duty threat would only end
up hurting Canada’s energy industry.

“It sounds superficially appealing, but if you think about
it for 30 seconds it’s a ridiculous plan,” Harper told
reporters.

The Conservative campaign focused primarily on law and
order issues on Saturday, with Harper promising to scrap a
government plan to decriminalize possession of small amounts of
marijuana.

Harper also proposed mandatory minimum sentences for all
serious drug crimes, and dismissed reporters’ suggestions the
plan would require a major increase in spending on prisons.

Martin did not campaign on Saturday.