With less than 48 hours until the softwood lumber agreement expires between Canada and the United States, chances of a last-minute resolution look increasingly slim. 
International Trade Minister Pierre Pettigrew told the House of Commons Friday that Canada would not negotiate a new pact with the U.S. by the March 31 midnight deadline. 
"The government of Canada will stand behind its industry and will challenge the wrong allegations of the U.S. producers that we are subsidizing," Pettigrew said. 
U.S. lumber companies are demanding protection. They have complained the Canadian government unfairly subsidizes its lumber industry because the wood comes largely from Crown land, making it much cheaper. 
When the deal expires, softwood will be traded under the North American Free Trade Agreement, and cheaper Canadian wood is expected to flood the U.S. market but not for long. 
The U.S. industry plans to launch a legal battle to slap a steep border tax as high as 40 per cent in tariffs on Canadian shipments of softwood lumber. 
to argue its case before international trade panels. "We are into a protracted fight and it's going to be an expensive one and the only people who are going to benefit out of that are going to be the trade lawyers," says B.C. Forestry Minister Gordon Wilson. 
Roughly $10 billion in softwood lumber is exported annually from Canada to the U.S., amounting to about one-third of the U.S. softwood lumber market. 
Written by CBC News Online staff