by GORDON HOEKSTRA Citizen staff

Northern Interior B.C. lumber producers are waiting to see what the final outcome might be from its provincial government's position that a softwood deal signed last weekend is not good enough.

However, at the same time, a pair of Northern Interior lumber producers say the B.C. government needs to select an export tax-only option as a border measure if the deal is implemented.

The Canadian government has given every indications it intends to carry forward with the deal, despite opposition in B.C., Alberta, Ontario and Quebec. Both Prime Minister Stephen Harper and International Trade Minister David Emerson have said so.

Under the seven-year agreement, two options are offered to regions: The export tax, which would run between 0-15 per cent has lumber prices slid, or a reduced export tax of 0-7.5 per cent and quota caps.

It's been anticipated that British Columbia would select the export only option for the Interior, in part because it's dealing with an expanding mountain pine beetle epidemic.

Carrier Lumber president Bill Kordyban said Thursday he's now head rumblings some companies may want to go with the quota option.

"Our biggest thing is that we do not want to see a quota arise out of this," said Kordyban. "We'll compete, whatever scenario it is, as long as it's a level playing field."

A export tax alone means each company competes on the same basis, however, as soon a quota is introduced, it means some system must be devised to determine who gets quota and how much, noted Kordyban. "The moment that somebody has chosen how to allocate the quota, that person, politicians or bureaucrats, or whoever it is, will have determined who will succeed and will fail," he said.

It won't be the market or business ability that determines success, he added.

Carrier Lumber, one of a handful of privately-owned, independent lumber companies in the Interior, has operations in Prince George and Prince Alberta, Sask., as well as a joint ventures near Quesnel and Burns Lake,

Kordyban said he could be supportive of the deal if B.C. selects the export-only option.

However, that doesn't necessarily mean he's pleased with the negotiated settlement.

He said if Carrier Lumber had negotiated the agreement it would look different. He wouldn't elaborate on what those differences were.

Brink Forest Products president John Brink said Thursday it's imperative that the province elect an export-tax only option for the Interior. If it doesn't, he says there will be mill closures, and it will destroy the lumber remanufacturing sector.

Brink, who also has concerns about the deal, is waiting to see a final version to determine exactly what impact it will have on his business. Lumber remanufacturers turn low-grade lumber and trim ends into higher-value lumber products. The sector had been seeking to be charged export measures based on the material they buy from sawmills, not on the value of their finished product. There is some recognition for the first-mill price, as its called, in the 80-page final text of the deal, but lumber remanufacturers with Crown timber licences are excluded.

Until he finds out exactly how the measure will be interpreted, Brink says a planned sawmill project in Prince George is on hold.

Brink operates lumber remanufacturing plants in Prince George and Houston.

The B.C. Liberal government has said this week that its demands must be met before it can support the deal initialled on the weekend.

The province's concerns include a termination clause in the seven-year deal which allows the agreement to be killed by either country after two years. B.C. wanted that extended to three years. Critics have said the escape clause waters down the seven-years of trade peace which was paid for in part with the $1 billion in tariffs left behind in the U.S. The remaining $4 billion is being returned to Canadian companies.

B.C. is also seeking a border measure exemption for lumber produced from logs on private land in the province, better provisions for the lumber remanufacturing sector and more workable running rules.

B.C. Forests Minister Rich Coleman has said the province has enough producers opposed to the deal to block it. In order for the agreement to be implemented, lumber producers holding 95 per cent of the tariffs collected by the U.S. must agree.

Companies also must drop their legal cases.

Both the provincial and federal NDP say they believe that Conservative MPs will break ranks and vote against the deal when it reaches Parliament this fall.

However, University of Victoria political scientist Norman Ruff thinks that's unlikely.

Given the popularity of Harper's government, the disarray of the leaderless Liberals and the stagnating New Democrats, it's unlikely MPs will choose to bring down the government on the softwood issue, said Ruff.

While initially he believed the minority Conservative government would be typical, lasting 18 months, Ruff said it now looks like the government will be much longer-lived.

Harper has said there will be a confidence vote on the deal in the fall.

It was expected that Harper and Bush would have some kind of softwood signing ceremony during their meeting Thursday in Washington, D.C., however there was little mention of the deal.

©Copyright 2006 Prince George Citizen