Buried in the middle of the province’s new plan for making the forest industry more competitive is a commitment to make the so-called value-added sector exempt from export duties that might come in a new softwood lumber trade agreement with the U.S.
“That’s the thing we’re really, really pleased that (Forests Minister Steve Thomson) is acknowledging,” said Russ Cameron, president of the Independent Wood Processors Association of B.C., “because that’s the thing that’s going to kill us if we have to once again pay a tax.”
It was a small measure in the overall plan, unveiled last week as the province comes under pressure to bolster what remains a key industry in many regions, but is being squeezed by uncertainties including the renewal of the U.S. trade dispute and the decline in timber supplies caused by the mountain pine beetle infestation.
NDP forestry critic Harry Bains wrote the plan off as a “series of half-measures” that sounded more like electioneering by the Liberal government rather than policy changes that will help the industry.
However, the government’s comment on export taxes was more than a small victory for the secondary manufacturers that Cameron’s organization represents. His group has long argued that its members were unfairly burdened duties under the previous Canada-U.S. softwood lumber agreement since they typically don’t have secure access to timber under tenure arrangements with government, but have to buy it at market prices.
Over the past 15 years, Cameron said, the part of the value-added industry — companies such as cedar-siding manufacturers and makers of indoor wooden mouldings — that the his group represents has shrunk almost by half.
“If we’re exempted (from trade taxes), we’re hopeful that will provide an incentive for big (timber) licensees to make more wood available to us,” Cameron said.
Thomson’s document lists 49 “strategic actions,” many of which require further consultation or mean adding to existing programs, such as the promoting B.C. wood products in other markets and developing non-traditional uses for wood and wood-pulp fibres.
In unveiling the document, government said it’s “focused on maintaining the forest sector’s position” as a key part of the economy, especially in rural B.C.
The forest industry was hit with a deep round of consolidation through the late 1990s and then the downturn of the U.S. housing market, with the closure of dozens of mills and thousands of job losses.
However, forestry remains a mainstay of the province’s outlying regions, employing some 65,500 people directly and accounting for about $8.8 billion of the province’s economy as measured by gross domestic product, according to provincial figures.
Thomson’s plan encompasses three broad themes: forest health, maintaining competitive conditions for the industry and supporting communities and First Nations.
The value-added sector factors heavily in the program that Thomson is rolling out.
“Access to timber is definitely one of the challenges facing the value-added sector,” Thomson said Tuesday in an emailed statement to Postmedia News.
And while he unveiled no new programs to direct more timber their way, Thomson suggested producers could get into joint ventures with First Nations and community forest licensees. Another measure, he added, was a $200,000 commitment to a marketing program for the value-added sector’s smaller producers that lack such expertise.
Industry representatives for the large forest licensees also like the plan.
“Ensuring that we have the conditions in our province that allow our industry to compete successfully is critical if we are going to sustain our sector and attract investment,” said Susan Yurkovich, CEO of the Council of Forest Industries, which represents the Interior’s large lumber producers.
Forestry critic Bains, however, argued that the plan only deals partly with long-standing problems with poorly managed reforestation and the lack of timber supply for the value-added sector.
“Now we’re just getting closer to the election and I think they need to say something (about the forest industry),” Bains said.
Government should be making bigger investments in reforestation and silviculture, Bains said, and work more on encouraging companies, particularly those on the coast that export logs, to make more B.C. timber available to companies that can create jobs here.
“It’s about showing leadership and saying ‘look, this is a public asset, we want to create more jobs with that public asset,’” Bains said “That isn’t happening.”