Little hope for forest communities in Campbell's words
By Paul Willcocks
VICTORIA - Premier Gordon Campbell offered up all the right sentiments this week, responding to the U.S. duty on softwood lumber.
It was a brutal decision, he said. An assault on families who reached out to help the Americans after Sept. 11. The most serious threat to Canada-U.S. relations in our time.
But families looking for hope had to pick through the words carefully to get more than reassurance that the government feels their pain. There's no quick cure to the problem, no assurance of victory now or in the future.
The effects of the U.S. actions will be devastating. The new duties will average 29 per cent on any softwood sold into the U.S. That's supposed to reflect the unfair advantage Canadian producers gain from subsidies.
B.C. exports about $5 billion a year worth of lumber to the U.S. in normal times, about half the Canadian total. Companies will now have to pay about $1.5 billion in duties if they export the same amount of wood.
They can't afford that. Last year total industry profits were about $200 million. That means that many companies can't export the wood without losing money on every shipment.
Since preliminary duties were introduced, the industry has lost about 15,000 jobs. That toll is likely to double now. And it will felt most sharply by communities already reeling from other economic problems - including government cuts.
Campbell acknowledged that. But the government so far has little concrete to offer.
Canada will press on with appeals to the World Trade Organization and under NAFTA, a process that could take years. Campbell promised that Canada would win those appeals, but families should think carefully before sinking deeper into debt, waiting for those victories to bring their jobs back. This change may be permanent.
The province will hold an emergency summit on softwood, bringing together companies, unions and provincial and federal governments. They'll come up with a "comprehensive and co-ordinated strategy." That's a useful exercise, but it won't much alter today's reality.
B.C. and Ottawa are talking about ways of helping families hurt by the decision. But it's disappointing that five months after Campbell started talking about the need to help families, there's no plan in place.
Those families do deserve aid, to allow them to survive until the victory is won - or to move on to new work in new places.
But B.C. won't support aid to industry, in part because the U.S. would just point to it as another unfair subsidy. While the governments' caution is reasonable, it's too soon to rule out loan guarantees that would let companies hang on until the dispute is resolved.
And the government is finally going to launch a public relations campaign in the U.S., arguing that the duty allows American companies to charge more for lumber, pushing up housing costs.
That's a huge challenge, but it's a measure that should have been under way a year ago. Campbell defended B.C.'s decision to postpone any campaign after the Sept. 11 attacks. That looks now like a bad decision.
And B.C. will continue forest sector reform and looking for new markets.
Not a bad list. But quite a vague one, especially given how long the government has to prepare for this day.
Sadly, Canada and B.C. don't have a lot of options. We need trade with the U.S. much more than they do. And most forms of economic retaliation - like taxing energy exports - would mainly hurt the Canadian industry. Even banning raw log exports would cost needed jobs in the woods.
The only real hope is for a lumber price increase which would allow companies to sell into the U.S. and make at least a small profit.
In the meantime, the government should unveil real plans to help families facing unemployment as a result of a trade dispute that their governments assured them would be resolved.

Paul Willcocks can be reached at willcocks@ultranet.ca