“The Conservative government’s extension of the Canada-US Softwood Lumber Agreement is the latest betrayal in a long list of actions that have damaged the Canadian forest industry”, says United Steelworkers (USW) Canadian Director Ken Neumann. “Extending the softwood lumber agreement, while failing to even attempt to address many of the problems it has worsened, or even consult with forestry workers who have been impacted by job loss in the sector, adds insult to injury to an industry that has been hard hit in recent years”.
“The softwood agreement does provide stability and predictability in terms of getting access to our most important market, the United States,” says the President and CEO of FPAC, Avrim Lazar. “The industry is of the view that at a time of ongoing market uncertainty, it is a good idea to extend the deal by another two years to provide a degree of certainty in market access to the U.S.”
Lazar notes that Canadian forest companies have gone through an economically challenging time with mill closures and the job loss in the face of the global recession and the changing marketplace. The sector has had significant success in diversifying their markets especially in Asia. Wood exports to China have increased by 46 times since 2000 and the sector is now the largest Canadian exporting industry to both India and China. However the U.S. still accounts for about two-thirds of the exports of Canadian forest products.
“The truth of the matter is that by renewing this deal, the government has got it right,” says Lazar.
In 2010, softwood lumber exports to the US were 9 billion board feet down from over 21.5 billion board feet in 2005.
“According to the Forest Sector Council, the Canadian Forest Industry has lost about 100,000 jobs between 2004 and 2010. Already faced with a lack of capital investment in operations, sawmills in British Columbia and across Canada have seen their competitive advantage chipped away by the government’s softwood lumber agreement,” added Steve Hunt, USW District Director for Western Canada.
Since being signed in 2006, the agreement has imposed a 15% border tax on Canadian companies exporting lumber to the United States. In addition, the agreement’s so-called “surge mechanism” discourages operational investment by penalizing all lumber producers in a region that exceeds its U.S. bound lumber quota, thereby encouraging productivity enhancing investment in non-Canadian sawmills.
“The decline of forest industry across this country has devastated communities, hurt families and led to thousands of job losses. By extending an agreement that makes an already challenging situation even worse, the Conservative government has demonstrated where their priorities lie – and it’s not with Canadian workers or communities,” Neumann concluded.