Canada is launching a challenge under the North American Free Trade Agreement against recently announced U.S. duties against Canadian softwood lumber imports.

The Canadian government filed a formal notice on Tuesday of intent to request the establishment of a binational panel under NAFTA to review the U.S. Department of Commerce's recent final determination on countervailing duties on the lumber.

The Commerce Department said on Nov. 2 that it had determined that Canada was providing unfair subsidies to its producers of softwood lumber at rates from 3.34 per cent to 18.19 per cent. It said it would instruct U.S. Customs and Border Protection to collect cash deposits from importers of softwood lumber from Canada based on the final rates.

The U.S. also imposed anti-dumping duties against Canadian lumber.

Canada said it is requesting the panel under NAFTA's Chapter 19, which deals with reviews and dispute resolution related to countervailing and anti-dumping duties.

"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," according to a statement issued Tuesday from the office of the foreign affairs minister.

"As our government has said publicly for some time, we will forcefully defend Canada's softwood lumber industry, including through litigation, which we are launching today," the statement said.

The Commerce Department's determination must still be approved by the U.S. International Trade Commission, which is scheduled to make its final determinations by Dec. 18, 2017.

If the ITC agrees with the government's decision, the Commerce Department will issue orders to collect the duties. If the ITC finds that U.S. producers were not injured by Canadian softwood imports, the Commerce Department's case will be terminated.