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Lumber Producers Pan Return to Quota
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By Gordon Hoekstra, Prince George Citizen – June 6, 2003
There’s little appetite for a return to a quota system to resolve the softwood dispute among Prince George lumber producers, but they also believe the U.S. won’t be satisfied until Canada’s market share is controlled in some way.
Still, that’s no reason to cave in to the Americans, Sinclar Enterprises official Gordon Andersen said Thursday.
Sinclar continues to operate their sawmills in Prince George – The Pas Lumber and Lakeland Mills - as well as in Vanderhoof and Fort St. James despite the 27% tariffs on U.S. bound lumber, low lumber prices and the rising value of the Canadian dollar.
“The fundamentals are that Canada has a big share of the U.S. market which they don’t want us to have,” said Andersen, referring to Canada’s one-third share. “Well, we’re not just going to arbitrarily shout our operations. Why should we? We have efficient operations. We have customers that want our product. Why do have to take the hit?”
Although there have been recent exchanges between the two sides, there has been no agreement on the level of an export tax. Canada’s latest proposal would see Ottawa collect a three-tiered export duty on shipments exceeding 17 billion board feet. However, the quota system appears similar to a much maligned five year deal that ended in 2001. Andersen said he sees many problems returning to a quota deal, including how it pits Canadian producers against each other, a sentiment echoed by another Prince George producer, Carrier Lumber. Canfor, which operates six area sawmills, has also said it’s not in favour of a return to a quota system.
Given Canada and the U.S. have such diametrically opposing views on the trade war, Andersen said he doesn’t know how to build consensus. But Andersen does like that the Canadian government is not capitulating to the U. S. – that it is fighting the tariffs at the World Trade Organization and under the North American free Trade Agreement. “I’m glad to see we’re not just going to roll over,” he said.
Brink Forest Products owner John Brink is also not a fan of the quota system, but says it might be the only way to get interim peace while B. C. creates a more market-based timber pricing system demanded by the U.S. in exchange for duty-free access to their market.
“The reality is, unless a deal addresses the volume of lumber shipped to the U.S., there will be no resolution,” he said. It’s imperative, however, that lumber remanufacturers have a say in how quota is allocated, he said. Under the last quota deal, Brink received quota for 27 mullion board feet of lumber, a fraction of his 150 million to 200 million board feet production capacity.
Despite the continuing trade war and still no resolution, Brink has not put a stop to his plans to open another lumber remanufacturing plant this summer.
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