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Softwood Lumber Deal Should Be Priority for Government

October 20, 2015

By: 250 News

Prince George, B.C.- While the talks are underway for a new softwood lumber agreement,  former Minister of Forests for B.C., Pat Bell, says there  are some different things in play this time round.“First of all there is a standstill  period now for a year, where  no litigation can be brought forth.  Canada is free to ship lumber on an unrestricted basis  into the U.S.  so that puts us in a position of strength for the next   year or so”  says Bell.

Another significant difference is  what  Bell calls a  ” time of transition ”   as  the amount of timber available for the sawmills in B.C. has been reduced. “There’s a lot more  southern yellow pine that is mature now and   available to the market than there was   ten years ago when this was last negotiated, so log prices in the  U.S. are considerably lower and log prices in Canada are   going higher, so there are a number of fundamental   shifts.”

Then there’s the fact Canfor, West Fraser and Interfor  have all  purchased  mill properties in the United States “In some cases they own more sawmills in the U.S. than the do in Canada” says Bell.

Bell  says  he is concerned that the  softwood lumber agreement has not been mentioned  as an issue in the federal election and  has not  been mentioned as part of the Trans  Pacific Partnership  “There is nothing  mentioned to provide relief to the softwood lumber  industry in terms of reduced options for the American  softwood industry to litigate.”   Federal  Minister of International Trade, Ed Fast  told 250News the  softwood  lumber agreement  with the US stands alone  but trade barriers for softwood lumber  to the Asia Pacific have been eased under the TPP.

Following  the crash of the U.S. housing market, B.C. worked hard to boost its softwood shipments to  Asia.  It was hoped that when the  softwood  lumber agreement  with the States expired,  Canada would be in a much stronger position  with  decreased reliance on its  exports to the U.S. “Last time , when we  went into the softwood lumber agreement  1 or 2% of our total lumber exports were  going  to China” says Bell “today it’s still about 25% despite the fact the Chinese market has gone through a bit of a  downturn.  I expect it will be much tougher for the Americans to try  and prove that Canada is a subsidized industry, but that doesn’t really  matter because they can  simply launch an action and  that immediately  brings tariffs to bear, so we’re guilty until proven innocent under American Trade laws  and that’s a real problem.”

Bell,  who  also  served as a Vice President for Conifex,  says there are a few key things that can work in Canada’s favour in this round of  negotiations “First,  we have the one year standstill period, so the Americans  are facing unrestricted flow of lumber for the next 12 months.  So once the federal election is resolved,   whoever becomes the next Prime Minister, if it goes to the top of their agenda,   I think they have 3 to five months  to negotiate a new deal in a position  of strength.  You might be lucky  to get Obama’s attention during that  time.  So I think there is a possibility  we could get a  deal as soon  as the federal election is over if  it becomes a top priority issue for the  Prime Minister.”

But the Americans  are also  heading  into an election period,  (Presidential election is November 8th 2016) and getting  Obama’s  attention sooner than later is a must  “I think if it’s delayed  past four or five months,  I think we’re into litigation a year from now for sure.”     Bell adds  It’s a big issue,   “and if it’s not included in the TPP I think that’s very problematic for  B.C, Quebec and Ontario.”

By: 250 News

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