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Posted November 14, 2010

Log exports a thorn in the side of communities

Jean Crowder - Ladysmith Chronicle, November 8, 2010

Log exports a thorn in the side of communities
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Photo by TJ Watt

While some business owners argue that raw log exports keep lumber companies solvent while they wait for the industry to turn around, others point out that tens of thousands of jobs have been lost in the lumber industry and raw log exports discourage creating new ones.

I have long opposed raw log exports. I’ve heard from too many people who lost their jobs and have seen strong companies like Madill shut down because our local lumber industry was in decline.

Now that the industry seems to be on an uptick with the Western Forest Products mill in Ladysmith starting up again, we still need a national forest strategy to keep the industry healthy and sustainable.

New Democrats have some solid ideas on what a strategy should include. We know that offering one-off programs like the green transformation fund can help immediate problems but we need other cost effective and efficient policies working together to support a long-term revitalization of the forestry sector.

A value-added tax credit program that escalates along with the level of local production would encourage job creation in forestry towns. Companies that ship raw logs would not qualify for this credit but others that use raw logs locally to produce paper, or veneer or other lumber products would.

Loan guarantees for large and small operations with significant business in the forestry sector is another important strategy to improve the industry. Guarantees give banks assurances that they will be paid back and helps release credit into the marketplace.

It is a strange situation that while consumers can access record-low mortgage rates right now, small and medium-sized businesses have had trouble getting credit.

With loan guarantees, lumber companies can re-tool and modernize their operations while maintaining their payroll.

None of these will work without concerted effort to reduce or eliminate the effect of unfair US subsidies for American mills. Providing a similar level of subsidy to Canadian mills could cost between $2 and $5 billion — but that isn’t what stakeholders here want. They want to compete on a level playing field.

So it is up to the federal government to negotiate with the Americans to ensure unfair subsidies are not propping up mills there.

That includes companies here deciding to export raw logs to their American operations to keep them profitable while Canadian mills close for lack of fibre.

Jean Crowder is the NDP Member of Parliament for Nanaimo-Cowichan.


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