Newspaper article The Canadian Press

U.S. Newsprint Duties Will Accelerate Shift to Digital, Says Industry

Newspaper article The Canadian Press

U.S. Newsprint Duties Will Accelerate Shift to Digital, Says Industry

Article excerpt

U.S. hits Canadian newsprint with duties


MONTREAL - The imposition of duties on U.S. imports of Canadian newsprint will accelerate the transition from print to digital and threaten thousands of jobs on both sides of the border, say industry players including North America's largest newsprint producer.

"There are 600,000 workers in the newspaper publishing sector as well as the commercial printing sector who are at risk," said Resolute Forest Products spokesman Seth Kursman.

Newsprint demand has decreased by 75 per cent since 2000 and is falling by about 10 per cent a year.

Anything that further reduces demand is a blow to the newspaper industry, say trade associations in Canada and the U.S.

"We've seen papers like La Presse move to full digital and if the cost of newsprint goes up it's one of those factors that's going to accelerate a move to digital," said John Hinds, CEO of News Media Canada.

Paul Boyle of News Media Alliance said higher newsprint costs will be devastating for the industry.

"There's some really attractive options for readers to just go online and this is going to facilitate that. The problem is that in many small communities, local towns, newspapers still rely on print subscriptions and distribution," he said in an interview.

Boyle said he's hopeful that duties will eventually be overturned because they would result in "massive job losses" in the tens of thousands.

"If there's one message I do want to get to our friends in Canada is that the U.S. newspaper publishing industry is going to fight this."

The U.S. Department of Commerce slapped an overall preliminary countervailing tariff of 6.53 per cent on about 25 Canadian plants, mostly in Quebec and Ontario, following an investigation that began in August 2017.

Canada is the largest exporter of newsprint in the world, exporting product valued at $1.6 billion in 2016. It is a market dominated by Resolute Forest Products (TSX:RFP), Kruger and Catalyst Paper Corp. of British Columbia.

Resolute faces a preliminary duty of 4.42 per cent while the Catalyst Paper duty is 6.09 per cent. The duty against Kruger is 9.93 per cent and the preliminary penalty against White Birch is 0.65 per cent.

It's the third time the U.S. has slapped duties on Resolute. The Montreal-based company expects to pay a total of US$190 million in duty deposits by the end of 2018 from trade disputes over softwood lumber, supercalendered paper and newsprint.

The U.S. Department of Commerce will make another decision on anti-dumping duties in March and the U.S. International Trade Commission will be asked to rule on the two measures in August.

The U.S. government began investigating Canada's newsprint industry after Washington-based North Pacific Paper Co., complained Canada was dumping newsprint into the American market and unfairly subsidizing its industry at home.

It is the same argument made regarding Canada's softwood industry, which led to the imposition of both countervailing and anti-dumping duties on most Canadian softwood exports to the United States. …

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