The one BC forest company I've paid attention to over the years, took their settlement and promptly bought a couple companies south of the line. They had to. It was obvious the BC industry was toast, immediately on the coast and with the first downturn for the interior companies. Most are running on fumes now.
Softwood lumber pact hurts industry, study finds
Ailing sector, burdened with higher export taxes, prevented from joining auto and aerospace firms in seeking federal help
Article Comments (2) JUSTINE HUNTER
From Thursday's Globe and Mail
November 27, 2008 at 4:26 AM EST
VICTORIA — Nora Wilkins's employment insurance benefits run out on Jan. 12.
That is the anniversary of
the day she and nearly 600 of her co-workers were laid off at AbitibiBowater's sawmill in Mackenzie.
As she listened this week to politicians debate what they can or cannot do for her industry - hamstrung as they are by the terms of the Canada-U.S. Softwood Lumber Agreement - Ms. Wilkins was unimpressed.
"It's not a good agreement if you can't help your own people," she said.
The terms of the deal preclude forest companies from joining the lineup of auto and aerospace industries looking to Ottawa for a bailout.
Now a new study, obtained by The Globe and Mail, concludes the softwood lumber agreement has undermined the Canadian industry it was supposed to help.
Since the deal was signed in October of 2006, struggling B.C. forest companies have paid more than half a billion dollars in export taxes under the deal.
"The added taxes came at the worst possible time. With lumber prices plummeting due to a rapidly deteriorating U.S. housing market, B.C. forest companies were awash in red ink," wrote forestry analyst Ben Parfitt for the Canadian Centre of Policy Alternatives. "The result was numerous mill closures in B.C."
The amount paid in export taxes to date is still outweighed by the roughly $2.5-billion that B.C. forest companies received in cash when the deal was settled.
That sum was repayment of a portion of the duties they had to shell out during the long trade negotiations.
But Mr. Parfitt said a significant portion of that money ended up creating jobs in the United States, not Canada.
"Companies like Canfor, Interfor and West Fraser got huge amounts of money back, but some of that flowed back to purchase or upgrade U.S. sawmills," he said in an interview yesterday.
In his report, entitled After the Windfall, Mr. Parfitt tallied up $620-million (U.S.) invested in U.S. sawmill operations by those three B.C.-based companies in 2006 and 2007.
Earlier this week, Premier Gordon Campbell said Canadian forestry workers should get assistance from the federal government equal to any bailout of the auto and aerospace industries.
Forestry officials have stressed they don't want a direct bailout because that would likely trigger another trade war with the U.S.
John Allan, president of the Council of Forest Industries, said yesterday the softwood lumber deal means Canadian forestry companies cannot get direct assistance from government.
"The debate that is going on between the politicians ... should be limited to assistance to workers getting out of the industry and getting on with their lives," he said in an interview. "Recovery is a couple of years away and the industry is going to continue to shrink."
But he said the agreement itself is not to blame: "In retrospect, it was a good thing," he maintained. "Anyone who points to the lumber agreement as part of our problems is dead wrong."
Bob Simpson, the New Democratic Party critic for forestry, disagreed. "Their hands are tied because of this agreement," he said. But he added there are things government can do to help the industry. Extend EI benefits for people like Ms. Wilkins, for one. Help restructure the industry to take advantage of new and emerging spinoffs like ethanol production, for another.
Ms. Wilkins has lived most of her life in the town of Mackenzie and she doesn't want to leave. She is currently training for a career in a medical laboratory, but she has few prospects if she stays. "There is no opportunity here," she said.
What will she do when her benefits run out in January? "Try to live on my savings, I guess." She paused. "It's not realistic. I don't know what I'm going to do. It's a crunch, and no one is listening." |
