The Canadian government filed its request for a panel review into the softwood lumber dispute on Tuesday, citing the appeal process through the North American free-trade agreement.
The U.S. Commerce Department said Canada subsidizes its lumber because the Canadian provinces own most of the forested land from which the timber is cut, while the American forests are predominately privately held. The ministry went on to say that the tariffs on Canadian lumber exports into the US were "unfair, unwarranted and deeply troubling".
About 360,000 Canadians were employed in the lumber industry in 2013, according to Statistics Canada. The combined tariffs averaging 20.83 per cent against the majority of Canadian softwood imports into the United States compared with 26.75 per cent in the preliminary findings. It said it would instruct U.S. Customs and Border Protection to collect cash deposits from importers of softwood lumber from Canada based on the final rates.
The Commerce Department imposed the countervailing duty as a punitive measure against what the USA sees as subsidized Canadian lumber while the anti-dumping duty is for selling softwood below market value.
Canada said it is requesting the panel under NAFTA's Chapter 19, which deals with reviews and dispute resolution related to countervailing and anti-dumping duties.
The U.S. also imposed anti-dumping duties against Canadian lumber.
"We will forcefully defend Canada's softwood lumber industry, including through litigation, which we are launching today", Canada's foreign ministry said in a statement.