"The U.S. Department of Commerce's decision on punitive countervailing and anti-dumping duties against Canada's softwood lumber producers is unfair, unwarranted and deeply troubling", Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr said in a joint statement published on the Vancouver Sun news website.
The anti-dumping and countervailing duties that were announced earlier this year were preliminary rates.
Commerce Secretary Wilbur Ross said in a statement that the United States remains committed to "free, fair and reciprocal trade with Canada", and that the decision is based on "a full and unbiased review of the facts in an open and transparent process".
"The U.S. continues to attack its closest friend, neighbour and ally while domestically the U.S. lumber coalition continues to put the interest of its members ahead of what is good for the American economy and American consumers", Bruce Ralston, minister of Jobs, Trade and Technology, said in a press release. "This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practises".
Commerce Department also determined that Canada is providing unfair subsidies to its producers of softwood lumber at rates from 3.34 percent to 18.19 percent and it has asked USA customs and border protection agency to collect cash deposits from importers based on these rates.
The Commerce Department's determination must still be approved by the U.S. International Trade Commission, which is scheduled to make its final determinations around December 18, 2017. Canadian unions and lumber companies fear the issue will eventually cause layoffs.
The disagreement centers on the fees paid by Canadian lumber mills for timber cut largely from government-owned land.More news: Donald Trump's tax cut won't be the biggest in United States history
The rate for Montreal-based Resolute Forest Products rises marginally to 17.9 per cent from 17.41 per cent and J.D. Irving's rate inches up to 9.92 per cent from 9.89 per cent.
"We are pleased the U.S. government is enforcing our trade laws so that the U.S. lumber industry can compete on a level playing field", U.S. Lumber Coalition co-chair Jason Brochu said in an emailed statement.
About half of Canada's softwood lumber exports to the United States originate from British Columbia, and the United States is B.C.'s largest market for softwood lumber products. The tariffs will take full effect at the border if a USA trade body confirms that the Canadian practices injured the US industry, a decision expected later this month. Canfor rose 0.9 percent to settle at C$25.87, the highest since July 2015, while West Fraser rose 1.9 percent.
Granger MacDonald, chairman of the National Association of Home Builders, said the softwood tariffs come as home builders and homeowners are rebuilding in the aftermath of hurricanes and California wildfire.
The lumber is primarily used in the housing industry.
That ruling also included Newfoundland and Labrador and Prince Edward Island lumber producers. However, it has now said that despite efforts by the USA and Canada, and their respective softwood lumber industries, the parties were unable to reach a mutually acceptable settlement.