Written by GORDON HOEKSTRA
Citizen staff
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Thursday, 20 November 2008 |
The Forest Products Association of Canada is warning the federal government not to bail out forest companies even in the midst of the severe downturn companies across Canada are experiencing.
These types of measures simply do not work and will only prolong the pain and will not help the industry emerge from the downturn on a competitive footing, Forest Products Association of Canada president Avrim Lazar said Thursday.
"Our basic view is that government has to know what its role is and the government's role is not hands off but it's not bailouts -- it is looking at every piece of government policy that effects our competitiveness and trying to create world-class competitiveness conditions," said Lazar.
He stressed there is a role for government in research, new technology, helping convert to green energy, making the tax regime competitive, access to wood fibre, transportation and infrastructure.
These measures will be available to the entire industry without it helping one more than another, said Lazar, who met with association member Canfor Pulp in Prince George on his Western Canada visit.
Lazar also said he's concerned that politics of Ontario and Quebec -- with its focus on the auto and aerospace manufacturing sectors, where both industries are asking for government monetary assistance -- eclipse the forest sector. There are more jobs in the forest sector than the other two industries combined, noted Lazar.
The forest association, the lobbying arm of industry in Canada, represents nearly 20 companies across Canada, also including West Fraser Timber, AbitibiBowater, Tolko, Louisiana Pacific and Tembec, all of which have operations in northern B.C.
The industry has been hit hard by a collapse in the U.S. housing market, but also a tightening in the credit market, which has slowed the global economy and as a result the demand for paper and pulp.
Lazar said what is needed to help the forest sector is to get the fundamentals right.
The federal government should address the crisis in financial markets by ensuring that the credit system works, as credit is like the oxygen that allows the economy to breath, he said.
Other elements include:
- Allowing accelerated depreciation for new capital investment, which would make it easier to attract money to modernize mills. Ottawa could could change the tax credit for research investment to also allow companies not making a profit to use it as well. "When someone is not making a profit that is exactly when you want to innovate their way out of trouble," said Lazar.
- And asking the federal government to carry out the rail service review they have promised. Lazar noted that 80 per cent of his members use on rail line. "Good companies that are monopolies treat their customers very badly. Their responsibility is to maximize profit, so they don't take care of us. Service is undependable and surcharges are over the top," he said.
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Last Updated ( Thursday, 20 November 2008 )
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