Prince George Free Press

Aug 23 2006

The softwood lumber agreement between Canada and the U.S. could result in more secondary manufacturing in the province, Brink Forest Products founder John Brink said.

Ottawa was expected to announce, Tuesday, whether the proposed deal has enough support from the industry to move ahead. If so, the agreement would still have to be put before parliament to be made into law.

Speaking late on Monday, Brink said a change in the way tariffs are collected under the deal would provide an incentive for Canadians to make more with our lumber resources than two-by-fours.

"For secondary manufacturers, the duty is not on the finished product but on the raw material," Brink said. "That I view as a huge benefit. It will stimulate the sector."

Brink Forest Products produces finger-joint boards using short board ends that would otherwise be wasted.

The current situation, which requires secondary manufacturers like Brink pay duties on the finished product, has traditionally hurt the competitiveness of Canadian wood manufacturers.

The seven-year deal includes a two-year extension clause and a one-year grace period before any changes can be made after the deal ends.

"For all intents and purposes, it is a 10-year deal. That is huge because it creates certainty," Brink said.

"There is nothing worse than uncertainty. Up to now it’s been a never-ending cycle of litigation. Considering that, I think this deal will be good for forestry companies – primary and secondary – and communities."

Without the deal, there is no foreseeable end to the cycle of tariffs and litigation, he added.

In addition, Canadian producers will receive approximately 80 per cent of their duties paid to date back from the U.S. government, he added.

With B.C.’s interior being a major portion of the Canadian forestry industry, Brink said, he expects billions will be returned to companies operating in the region.

Brink said he and others will likely be using some of that money to reinvest in their operations, which boost local economic activity.

While the deal hasn’t pleased everyone, he said, it gives companies a stable framework to move forward.

"Is it perfect? No. Is there other things we would have liked to have seen? Yes," Brink said.

"[But] the alternatives would have been much, much worse. We knew we would not end up in the utopia of free trade. We can now start looking forward to what the region will look like in the future."