Is there going to be a softwood deal, or not?

The answer is likely to be clearer today as International Trade Minister David Emerson has invited the CEOs of about two dozen companies to Toronto, ostensibly to sell the deal.

Industry representatives and observers -- those that will talk -- have different views on what may happen, or is even possible.

Free Trade Lumber Council executive vice-president Carl Grenier said Tuesday that Prime Minister Stephen Harper has made his government's position clear: The negotiations are over and the deal will not be re-opened.

Grenier said that means the meeting, to which he, as an industry association representative has not been invited, is about convincing companies to support the deal.

The deal with the U.S., initiated last month, can be blocked by lumber companies which must agree to hand over a portion of their tariffs on deposit in the U.S.

Companies holding a least 95 per cent of the more than $5 billion in tariffs must agree to leave $1 billion to the United States, half of which will go to the American lumber coalition.

The Canadian companies also must drop their legal cases.

The deal also replaces the tariffs with an export tax, or an export tax and quotas, meant to prevent Canada from increasing its share of the U.S. lumber market.

Although a list of changes to the deal -- that differs by region -- has been called for, Grenier said it's too early to tell whether the Canadian government will get enough support for the deal to go ahead.

"It's not up to the associations or provinces to decide, it's up to the individual companies to decide," said Grenier. "So, I think individual companies' circumstances will play a role in this decision."

The Free Trade Lumber Council represents companies in Quebec, Ontario, Alberta and B.C., accounting for about 25 per cent of softwood lumber exports to the U.S.

But Grenier also sees a dual purpose in the meeting.

While, firstly its meant to gauge and elicit support, secondly it's meant to ensure the industry will shoulder the blame, if the deal fails, he said.

But other industry observers believe there still may be room for change.

John Brink, president of Brink Forest Products, said the Canadian government could sweeten the pot by reducing taxes on the money that would be returned to Canadian companies.

The deal could also be tweaked on one issue, increasing the trigger point on when the deal could be terminated, he said.

The seven-year deal can be terminated after two years, after which the U.S. must wait one year to launch another trade action. B.C. has asked to increase that termination trigger to three years.

Brink, who supports the deal as better than the alternative of more legal wrangling, said he believes its appropriate that Emerson is meeting with the CEOs who represent the actual companies.

"There is a lot at stake here," said Brink, who predicts another three to five years of fighting on the issue if the deal is not accepted.

Russ Cameron, president of the Independent Lumber Remanufacturers Association in B.C., also sees no reason that change cannot be made to the deal.

He says it would be in the interest of the American lumber coalition to consider the changes. Cameron said the U.S. lumber coalition wouldn't want the deal to get away from them particularly as Canada continue to mount legal victories.

Forest industry analyst Paul Quinn says he would bet the Canadian government can still pull the deal off.

Although there was some talk last week that some CEOs would boycott the meeting in Toronto, Quinn expects everyone that has been invited will be there.

That includes Canfor, which has supported the deal, and Tolko, which has not, both of which have operations in B.C.'s Northern Interior.

Also expected to be at the meeting are West Fraser, Abitibi, Tembec and Domtar.

"I think Emerson will rely on some of the guys that really need the money (returned from tariffs) to help convince some of the guys that don't," said Quinn, with Salman Partners in Vancouver. "Probably, the outcome of this meeting will determine whether there's a chance of getting a deal through."

Quinn also believes there is still a chance to tweak the deal, something which, eventually, the American lumber coalition will be amenable. "At the end of the day, the coalition gets half a billion dollars, so, I think they're willing to listen to some (of the changes)," said Quinn.

So far, the American lumber coalition has publicly said that negotiations are over and they don't want to re-open the deal. The U.S. government has taken a similar position.

©Copyright 2006 Prince George Citizen