Resolute Forest Products Inc., Montreal, Que., Canada, this week announced that it is disappointed with the decision by the U.S. Department of Commerce to impose countervailing duties against Resolute in connection with its investigation of imports of supercalendered paper from Canada. Commerce determined a subsidy rate of 17.87% for Resolute, and rates of 20.18% for Port Hawkesbury Paper LP and 18.85% for all other producers/exporters in Canada. On July 29, 2015, Commerce calculated a preliminary rate of 2.04% for Resolute. Resolute believes that Commerce's justification for Resolute's significant increase is based on a failure to consider all the relevant factors and an incorrect application of the statute.

According to Resolute, all but 0.77% of the 17.87% subsidy rate is based on two specific programs Commerce said it discovered during its on-site verification of the company's submission, based on records provided in the extensive disclosure. These programs relate to modest amounts received by Fibrek Inc., a subsidiary of the company since 2012, for the Saint-Félicien mill in Quebec. This facility produces kraft pulp, only a very small portion of which is sold internally to add strength to mechanical supercalendered paper manufactured at the Dolbeau and Kénogami mills in Quebec.

Resolute contends that it is unreasonable to conclude that the two programs in question represent a subsidy of any significance, if at all, for supercalendered paper production. But for these two programs, the subsidy rate applicable for Resolute would have been de minimis, and Resolute would be excluded from a possible countervailing duty order. It is important to note that in establishing Resolute's subsidy rate, Commerce did not attempt to quantify the financial significance of the purported subsidies; it relied instead on rates set in an unrelated 1997 administrative review concerning imports of pure and alloy magnesium.

The company is especially discouraged by the suggestion that it "did not fully cooperate with the investigation," based on commerce's contention that it did not act "to the best of its ability" and precluded verification of this ostensibly unreported assistance. The company strongly disputes this suggestion: 

Resolute has complied with every request for information and went beyond any reasonable standard for a respondent to act to the best of its ability, it notes, adding that Resolute is proud of its reputation for good governance and transparency, and it firmly believes that it fully cooperated with Commerce's investigation, committing significant resources and management time to provide Commerce with all of the information required for a fair and credible investigation. The company said that it will continue to strongly defend its position in this matter. 

Resolute produces supercalendered paper in Canada for export to the U.S. at its Dolbeau and Kénogami mills in Quebec.