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Energy exports to US enter Canada campaign fight

Posted on: Saturday, 3 December 2005, 18:01 CST

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.

Source: REUTERS

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