Canada plans $1 bln forestry aid package: paper

Thu Jun 11, 2009 3:08am EDT
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(Reuters) - Canada is planning a $1 billion aid package for its forest industry, to help Canadian pulp producers from the effect of subsidies Washington gives to their U.S. rivals, the Globe and Mail reported on its website.

The Canadian government is looking to offset the impact of up to $8 billion in "black liquor" subsidies that U.S. pulp producers get.

The package will also attempt to prevent potential retaliatory trade action prompted by the U.S. softwood lumber lobby, according to the paper.

Ottawa's focus will be on ways to help forest companies become more environmentally efficient, including green power projects and cogeneration plants that produce both heat and electricity, the paper said.

Steve Outhouse, acting director of communications for Canada's Natural Resources Minister Lisa Raitt, told the paper that he could not comment on "any specific plans that may be in the works."

Canada's Natural Resources Ministry could not be immediately reached for comment by Reuters.