The independent thought tax

The CP reports that the Cons will impose a 19% "special tax" on softwood lumber companies who dare to recognize that they can do better in litigation than under the Cons' capitulation:

The federal government plans to levy a 19 per cent special tax on lumber companies that withhold their co-operation with the newly signed softwood lumber deal with the United States, The Canadian Press has learned.

A federal official confirmed Tuesday the tax will be imposed in a way that penalizes lumber exporters who refuse to sign a waiver that allows Ottawa to leave about US$1 billion in lumber duties in American hands after the agreement comes into force...

The deal requires companies that are due refunds to sign waivers allowing Ottawa to kick money back to the Americans because otherwise they would be entitled to a 100 per cent refund...

A posting on International Trade’s softwood website says the special charge will be included in legislation needed to implement the agreement.

Klager said enabling legislation will likely be introduced next week when Parliament resumes sitting but could not say what percentage of companies due duty refunds had formally signed onto the agreement.

The tax is supposedly required to prevent "free riders" from obtaining their refunds without paying their share of the extortion. But on a cursory look, any payment from Export Development Canada under the agreement is limited to companies who complete a set of form documentation which sounds likely to include a commitment to drop all litigation. (I'd confirm that fact, except that the Cons have hidden the actual documents behind a registration wall with access open only to lumber exporters themselves. Openness and accountability, anyone?)

And if a company doesn't sign up for the EDC refund process? Well, one choice would be to try to recoup its partial share of the duties through a two-year-long US Customs process, which would itself presumably require agreement to drop all litigation. And the other choice is not to pursue payment under the capitulation agreement - which means having to pay the "special tax" on top of an exporter's bottom line without receiving anything back.

In sum, the agreements without the tax already ensured that there would be no risk of free riding. Unless, that is, the mere privilege of operating in a country governed by His Big Daddyness is construed as a "benefit" worth imposing some cost to match.

But that doesn't seem to be enough for PMS and company. Instead, the tax turns the Con government into a free rider on the backs of companies who want to continue with litigation, ensuring that those companies pay their proportional cost of the protection money, plus the export tax imposed under the agreement, while receiving nothing back but the Cons' eternal scorn for having the nerve to continue with successful litigation rather than an utter failure of a deal. And in the Cons' world, this apparently counts as "fairness and equity".

With the Bloc already having committed to voting for the Cons' sellout, it seems all too likely that this additional thumb in the eye to the softwood lumber industry will also manage to pass. But the tax should also highlight the Cons' utter spite against anybody who doesn't want to play along with their every whim - and should ensure that all Canadians in danger of facing similar tactics in the future do everything in their power to remove the Cons' opportunity to do any more damage to Canada.