OTTAWA -- International Trade Minister Mary Ng says Canada is formally initiating a challenge of "unwarranted and unfair" U.S. duties on Canadian softwood lumber.

The Canadian government filed notice of the challenge today under the U.S.-Mexico-Canada trade agreement's dispute resolution system.

Ng says in a statement that the duties harm Canadian businesses and workers but also serve as a tax on U.S. consumers already dealing with inflation and supply-chain issues.

The U.S. cut its anti-dumping and countervailing duty rate in half earlier this month to 8.59 per cent from 17.61 per cent, but Ng signalled that Canada would still fight the measures.

The crux of the U.S. argument is that the stumpage fees provinces charge for timber harvested from Crown land are akin to subsidies, since U.S. producers must instead pay market rates.

Ng says that Canada is willing to work towards a negotiated solution in the long-running dispute.

This report by The Canadian Press was first published Aug. 29, 2022.