A New Softwood Lumber Agreement – Is it the end of Value Added in BC or an Opportunity?
Dear BC Mayors, MLA’s, MP’s, and Senators,
The Independent Wood Processors Association (IWPA) would like you to be aware that British Columbia has lost over half of its value added wood processors in the last dozen years.
This was not due to the collapse of the US housing market. Americans who were unable to sell and build, fixed up their existing homes, so spending on specialty products in the “improvements” market was unaffected.
The primary reasons given for these business failures were the effects of the Forest Policy changes of 2003 and the Softwood Lumber Agreement of 2006.
The Forest Policy changes allowed Canfor, West Fraser, Interfor, Tolko, and Western Forest Products to consolidate control of 2/3rds of the BC Public’s non-competitive timber resource. This consolidation has impaired the function of markets and made it increasingly difficult for BC’s non-tenured value added sector to access a share of the BC public’s wood resource.
Then the Softwood Lumber Agreement of 2006 imposed a Border Tax on our US bound products. The tax was designed to make our products uncompetitive in our primary market and it did that very well. For six years, Canada applied a 15% tax to our US bound products if we employed British Columbians to add value to wood in BC.
These two factors have been primarily responsible for the demise of 54 of the 107 members that the IWPA had in 2002. And while BC has been losing its value added sector, Canfor, West Fraser, and Interfor have purchased 39 sawmills in the USA.
Maybe it’s time BC realized that there are no more job growth prospects in the production of commodity lumber products. Maybe it’s time we negotiated a Softwood Lumber Agreement that will allow the value added sector to survive, grow, and maximize the socio-economic benefit per cubic meter harvested.
The fact is, that as long as BC is pricing the public’s non-competitive timber by formula instead of by competition, we will have a problem with the Americans. We know by now that there will be an American imposed price to be paid to offset the benefits of tenure, and we know that BC’s big lumber companies are willing to pay that price to keep those benefits.
But the time has come for the tenured processors to pay that entire price. Those of us who compete for 100% of our wood supply can no longer afford to pay part of the price on their behalf. We do not have the benefits that we are paying to preserve, and because we live here, we can’t pack up and move our businesses to the USA.
The IWPA needs your support and needs the BC Government to tell Ottawa to negotiate a new SLA that has the tenured producers pay the entire cost of retaining the benefits of their tenures.