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NDP accuses Liberals of tinkering with timber prices |
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Written by GORDON HOEKSTRA
Citizen staff
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Friday, 16 May 2008 |
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VANCOUVER ISLANDCAMPBELL RIVER
The NDP are accusing the Liberal government of favouritism and tinkering with timber pricing after they uncovered a cabinet order that set the price of timber feeding Canfor's Tackama plywood mill at 25 cents a cubic metre, the lowest level possible.
The Liberal government, however, says the changes are an interim measure that reflect a change in transportation costs.
Canfor had announced last January it was shutting down the plywood plant in remote Fort Nelson, 800 kilometres north of Prince George, as well as its sister oriented strand board panel plant.
However, at the end of February Canfor said it had decided not to close the Tackama plant, saving 200 jobs, but would still shutter the OSB plant, a loss of 200 jobs.
In keeping the plywood plant open, Canfor cited savings from wages, contractors, suppliers and timber cost reductions, but would not reveal the magnitude of any of the cost cutting.
The order in council from the Liberal government went into effect on March 3, and set stumpage at 25 cents for three months for 26 timber marks, most of which are held by Canfor.
The province's on-line harvest billing system shows that most of that timber was already set at 25 cents a cubic metre, but in one instance, the timber pricing had been set at $10.97 a cubic metre.
The 562 loads that Canfor brought into Tackama under that timber mark after March 3, now at 25 cents a cubic metre, saved the company about $250,000, according to a tabulation by The Citizen based on the harvest billing data from the province's on-line system.
NDP forestry critic Bob Simpson said the order in council smacks of "special intervention."
He points out that the provincial government didn't take such action in communities like Mackenzie and Fort St. James in northern B.C., Midway in southern B.C. or Campbell River on Vancouver Island, communities he noted that are in the same dire-straits. "Why that particular instance where the people got the minister's attention, and he goes and actually does something, when we've been asking him to do something across the province," said Simpson, the North Cariboo MLA who is from Quesnel.
Fort Nelson, like other communities in north and central B.C., are reeling from a collapse in the U.S. housing market and a strong Canadian dollar.
The Citizen has estimated that more than 3,500 workers are off the job in northern B.C.
There are mills closed in Terrace, Fort St. James, Mackenzie and Chetwynd. Many companies have also cut shifts and moved to a reduced work week.
A survey of timber pricing from the province's on-line billing system for other plywood plants in Prince George, Williams Lake and Lumby show that rates vary between 64 cents to $22.
Simpson said the government's action also calls into question whether the province has a market-based timber pricing system. The system, introduced in the Interior of B.C. in the summer of 2006, was meant to use 20 per cent of Crown timber put up for auction to set prices on the remaining 80 per cent.
Simpson said this kind of provincial government intervention -- in the form of a cabinet order -- just invites closer scrutiny from the Americans, which have long contended B.C.'s pricing system subsidizes industry.
Forests Minister Rich Coleman said the reason the timber was priced at 25 cents for the Tackama plywood plant is there has been no sawmill there for four years, which normally would be the point of appraisal for setting transportation costs for timber pricing.
In this case, he said, the nearest sawmills are in Prince George. "That is quite a ways away which would bring the cost down to 25 cents," explained Coleman. (In fact, there are sawmills that are closer: In Fort St. John, Chetwynd and Mackenzie).
Coleman said the measure is meant to be temporary, in part, while a review of the timber pricing appraisal system is undertaken. "It was a short-term decision, not taken lightly quite frankly and, certainly, we did advise the U.S. about it, and they haven't had had blow back on it," he said.
Coleman noted that after a sawmill has been closed for five years, the point of appraisal can change, which takes place this May for Tackama's former lumber plant. He also said the point of appraisal has not been an issue in other areas.
"If you take for instance in the (Prince George) area, most of them are getting a lot of 25 cent wood now, so it really doesn't have an affect," said Coleman. "And you have sawmills there, so there's not point of appraisal to change because have the mills in the communities."
However, it is not clear why the point of appraisal would simply not be the Tackama plywood plant itself. All the timber harvested under the timber marks listed in the order in council of March 3 went to the plywood plant.
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Last Updated ( Friday, 16 May 2008 )
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Or at leasts shuts their eyes to them as long as the taxes get to the proper place at the proper time.
I.M.H.O.