Written by GORDON HOEKSTRA
Citizen staff
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Thursday, 27 November 2008 |
B.C. must blunt the impact of the softwood lumber agreement with creative policies that help foster a value-added wood sector that is not subject to the trade penalties under the deal, says a report released Thursday by the Canadian Centre for Policy Alternatives.
The seven-year agreement signed in late 2006 subjects lumber exports to the U.S. to an increasing tax as lumber prices slide. The export tax, which is currently set at 15 per cent, has cost the B.C. forest industry more than $540 million so far.
Report author Ben Parfitt suggests the province encourage production of higher value forest products including wood windows and door frames and help the industry find new markets for its products outside the U.S.
He also recommends the province allocate more publicly-owned forest resources to First Nations, which could then use those resources to secure business loans and/or enter into new partnerships with forest companies.
"None of these runs counter to the softwood lumber agreement," said Parfitt, whose report was backed by unions and the Endswell Fund of Tides Canada Foundation. "It's high time the province actively pursued them because the status quo clearly isn't working," he said.
Parfitt acknowledged it would be a challenge to grow the value-added sector, but stressed the province does have tools that don't run afoul of the softwood lumber agreement's rules.
The province already directly awarded timber rights to create new oriented strand board plants in the Northern Interior.
"No OSB mills have materialized but that's beside the point. The point is there is a mechanism open to the province to encourage valued-added production," said Parfitt.
The report argues the softwood lumber export tax has also led some companies to invest outside the province.
Under the softwood agreement, the U.S. reimbursed about $4.3 billion in duties paid by Canadian companies on U.S.-bound lumber shipments during a 54-month trade dispute. But following the return of the tariffs, Canfor, West Fraser and Interfor spent $620 million US to purchase or upgrade U.S. sawmills.
The B.C. Liberal government has been investing in opening markets other than the United States. Forests Minister Pat Bell just returned from a trade mission to China, which included senior executives from Canfor and West Fraser.
The province is also reviewing First Nations timber rights tenures.
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Last Updated ( Thursday, 27 November 2008 )
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