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UPDATE 1-Canada opens WTO case against United States over lumber duties

(Adds background on case)

OTTAWA, Nov 28 (Reuters) - Canada on Tuesday formally opened a case against the United States at the World Trade Organization over a recent Commerce Department decision to impose duties on Canadian lumber exports, the foreign ministry said.

A ministry statement said Canada would forcefully defend the lumber industry against the "unfair, unwarranted and deeply troubling" decision. Earlier this month Canada launched a NAFTA trade challenge against the duties.

The U.S. Commerce Department accuses Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in the construction of homes. Canada denies it is dumping the lumber.

The disagreement centers on the fees paid by Canadian lumber mills for timber cut largely from government-owned land. They are lower than fees paid on U.S. timber, which comes largely from private land.

Earlier this month, the U.S. Commerce Department set duties that would impose anti-dumping and anti-subsidy duties affecting about $5.66 billion worth of imports.

(Reporting by David Ljunggren; additional reporting by Rod Nickel in Winnipeg; Editing by Andrew Hay)