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An alternative for the forest industry is possible

THE federal government's aid package for the softwood lumber industry announced on October 8, 2002 does not address the problem that the industry exists primarily on exports. Under current arrangements those exports are at the whim and vagaries of the United States and Japan. With the prolonged economic downturn in Japan and the attacks of the American lumber monopolies, the Canadian industry is in the grip of a serious crisis of overproduction. How can the government bring some stability and security to the industry and in particular to the lumber workers and their communities? Sales and production must be harmonized. How can we do that without a vigorous guaranteed internal market for softwood lumber and legally binding bilateral contracts with foreign buyers?

The North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) have proven in practice to be useless and only serve the interests of the most powerful monopolies, mostly American. NAFTA and the WTO with their endless expensive legal challenges do nothing to ease crises and insecurity over export markets and price. When an economic downturn hits a foreign market such as Japan, the market simply dries up. When competing monopolies in the U.S. use their state to attack Canadian competitors, NAFTA and the WTO are useless to resolve the situation. Bilateral long-term export agreements can assist to stabilize the industry. The production capacity of the lumber industry can be adjusted rationally if it knows the approximate size and value of the export market over the long-term. However, even with such agreements in place, the focus must be on the internal Canadian economy.

The reliance on the export market and the anarchy and hostility that presently exists, especially with the U.S. government and the U.S. lumber monopolies, are dangerous and will only lead to more insecurity and disruption to the lives of forest workers and their communities. The time is now for the federal and provincial governments to support wholeheartedly the forest workers and their communities and release their energy and resourcefulness to develop a stable forest industry owned and run by the people who work and live in the timber communities; an integrated forest industry that thrives by serving primarily the Canadian economy; an independent industry not subject to the ups and downs and hostile competition of the export market. A national forest investment and marketing board could be established to stimulate alternate uses and markets for softwood lumber in Canada such as participating in solving the social housing crisis.

In previous issues, TML has proposed that the Canadian government should immediately establish a Canadian Softwood Lumber Board (CSLB) similar to the Canadian Wheat Board or Zespri, the New Zealand marketing board for all Kiwi fruit grown in the country. All softwood lumber sold abroad must be sold by the CSLB, which would purchase from Canadian producers all softwood lumber destined for export. The CSLB would enter into contracts with Japanese and U.S. purchasers of Canadian softwood lumber at an agreed price and for an agreed quantity over a certain period of time. If the Japanese government or U.S. government were to demand a purchasing tax from the local consumer, that would be an issue between consumers and their government but should not involve the CSLB directly. If the American government charged a ridiculous tax on CSLB product that could only mean they do not want Canadian lumber and we would have to accept that extremely unfriendly fact of life.

To establish a Canadian Softwood Lumber Board would require withdrawing from NAFTA as it contravenes its regulations. The Canadian government should immediately give notice of withdrawing from NAFTA. Membership in the WTO also poses a problem.

All ownership in softwood lumber mills should be frozen. No change in ownership of mills should be allowed without government approval and no new foreign ownership should even be considered at this time of upheaval in the industry. All loans and bankruptcy proceedings against mills should also be frozen pending government investigation and possible assistance. All possible support should be given to communities to establish local cooperative ownership of mills involving the actual producers, First Nations and local businesspeople. Federal investment money should be made available at attractive terms for local community groups especially collectives that want to establish ownership of mills. Government ownership should also be considered.

Raw softwood timber sales must be part of the CSLB's mandate and should be carefully regulated. The greatest consideration should be given to the health of the forests and sustainability of the forest industry by using the most advanced science. Part of the mandate of the newly formed CSLB would be to determine the amount of softwood lumber that can be reasonably sold abroad. That figure in large measure would be determined by the attitude of the U.S. government whether it would allow Canadian softwood lumber into the U.S. or not. We cannot force them to take our lumber and we cannot be forced to hand over our timber industry and raw timber to them. During this interim period until things settle down with the U.S. government, everything should be done to assist the logging and milling communities regain some stability. No timber workers or their families or local businesspeople should be allowed to suffer from this dispute. Alternative economic projects using the vast renewable resources of the forests should be jointly considered by governments, the local communities and cooperatives of workers. No one should be left without a livelihood.

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