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Strategies & Market Trends : Fascist Oligarchs Attack Cute Cuddly Canadians -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (89)	8/27/2001 2:34:10 PM
From: Snowshoe	Read Replies (1) \| Respond to of 1293

Hey, I did we miss this item from August 16? Last Updated: Thursday 16 August 2001 TOP STORIES vancouversun.com Stumpage fees scrapped in bid to counter U.S. Minister says B.C will find a way to charge market rates for Crown timber Petti Fong Vancouver Sun The provincial government will abandon its traditional stumpage system and start charging market rates for Crown timber in an attempt to counter U.S. claims that the current system unfairly subsidizes B.C. companies, Forests Minister Mike de Jong said Wednesday. De Jong said Wednesday the move is an attempt to persuade the U.S. to withdraw the 19.3 per- cent duty on softwood lumber it has imposed on Canadian producers. Under the current system, the government sets a revenue target for stumpage -- the fee it charges for wood cut on Crown land -- and adjusts that target four times a year. A market-based system, according to the industry, could include anything from auctioning off wood to the highest bidder or trading it on a commodity-style exchange. Earlier this year, the Coast Forest and Lumber Association calculated a market-based system could lead to a drastic drop in government revenues from timber sales, from $700 million a year to $300 million. De Jong said the government has not yet worked out how to apply the market-based system -- which it promised in its election platform -- but will consult with industry groups. "We think it makes sense to have a more market-based lumber pricing," de Jong said. "It would be irresponsible of us not to test the American commitment to free trade. "Do we have a market-driven system or not?" In a ruling released Friday, the U.S. commerce department imposed the import duty on softwood products after ruling that Canadian companies get an unfair break on the price they pay for Crown timber. The decision threatens to devastate the B.C. softwood industry, which exports $5 billion worth of products -- half the Canadian total -- to U.S. markets annually. One major forest company, Doman Industries, has already laid off nearly 1,000 workers and says more job losses are coming. De Jong said he believes substituting a market-based pricing system for Crown timber will still enable B.C. producers to compete favourably with U.S. producers while undermining the U.S. producers' argument. "It's ironic that this bastion of free enterprise is catering to special needs interests," he said. "Our objective is not to hurt American companies but have a system that's defensible on a policy basis." Changing the pricing system for wood will force the Canadian industry to reconfigure, de Jong said, but he anticipates it will not lead to job losses. It is too early to tell what impact a market-based pricing system will have on the U.S. duty and the industry, said John Allan, president of B.C. Lumber Trade Council. "We want the minister to be aggressive and pursue policy changes that will make us more competitive," Allan said from Washington, D.C. where he is meeting with lawyers to discuss legal strategy. The U.S. duty is expected to boost U.S. lumber prices and raise the price of housing, which consumer advocates warn will cut thousands of Americans out of the market for new homes. However, industry analyst Charles Widman said he doesn't believe changing the pricing system will get the duty removed. "It's too late to try and placate the Americans," he said. "The department of commerce has made its decision and the pretence of stumpage is just about market share." Since 1991, Canadian softwood has increased its market share in the U.S. from 27 per cent to the current 34 per cent. American producers, especially in the south, who have strong political support in Congress, want Canada's share reduced to 25 per cent, Widman said. "Right now we have an oversupply of lumber in North America and that has reduced prices to 10-year lows."