Threats to forestry sector continue

Some recent developments on the forestry file are presenting both challenges and opportunities for the sector in Canada. Unfortunately, the Conservative government’s abandonment of the forestry sector is set to continue which means that the threats to the sector will continue to damage our competitiveness, and the opportunities to move ahead are unlikely to be seized upon.
While demand and prices are starting to recover for forestry and paper products the most significant challenge to Canadian mills today is the ongoing implementation of unfair government subsidies that continue to prop up US based operators. Thankfully, the Black Liquor regime for US pulp and paper mills expired at the end of last year, but the new Biomass Crop Assistance Plan (BCAP) has taken its place. The Black Liquor regime paid out more than $8 billion to US mills in just over two years, and Natural Resources Canada estimates the BCAP will pay subsidies of $3–10 billion to U.S. mills over the next three. It is clear that Canadian mills will continue to operate at a competitive disadvantage due to the perpetuation of these subsidies unless our federal government takes action to level the playing field on their behalf.
Despite the challenges posed by unfair foreign subsidies, there are new opportunities for growth in the sector which should be encouraging news for all of us living in Northwestern Ontario. Earlier in the month the Forestry Products Association of Canada (FPAC) presented the findings of a large study they sponsored which found that bio-fuels are likely the most profitable way forward for the sector. In a press release, FPAC said the following; “[The report] places traditional products, especially lumber and pulp, at the heart of a new, green business model that has the potential to make the forest products industry a pivotal force in Canada’s effort to become a clean energy super-power. If we follow this new model we will be able to produce power on the scale of nine nuclear reactors, enough to meet the energy needs of 2.5 million homes, or one out of every five homes across Canada.” Good news indeed, but this potential growth can only be realized if the sector is supported by an active federal government which recognizes its importance to small communities in regions like ours.
In facing the challenge of eliminating threats and seizing opportunities in the forestry sector I am not optimistic that we will ever see leadership from the Harper government. I say this because recently, Greg Rickford (the Conservative MP from Kenora) stated, “I think we are doing enough” when questioned about his government’s support for the forestry sector. This was a shocking claim given that Natural Resources Canada estimates that 50,000 forestry jobs have been lost across the country - 18,000 in northern Ontario alone - since the Harper government came to power in 2006. Buchanan Forest Products has gone into receivership and AbitibiBowater has also entered into bankruptcy restructuring under this government’s watch. If the Conservatives actually think they are doing enough now, putting just $170 million into this $84 billion a year sector in last year’s budget, is there any hope that they will offer the $3 billion over 5 years that the FPAC is asking for to move forward? Does anyone think they are preparing to match or even negotiate an end to those unfair US subsidies? I for one do not.
New Democrats believe that the forestry sector requires active and strong federal leadership to ensure that it remains competitive today and is able to realize its full potential tomorrow. We believe that the problem with the Conservative approach to the forestry sector, and the Liberal approach before it, is that they have never put forth a comprehensive long-term strategy. If such a strategy were in place today, the federal government would be taking action on a number of fronts: eliminating or countering the massive US subsidies, providing emergency loan guarantees for struggling companies like Buchanan and AbitibiBowater, extending EI benefits for workers, changing regulations when needed to protect private pensions, and establishing new tax credits for research and commercialization of bio-fuels as recommended by the Forestry Products Association of Canada (FPAC). For our part, New Democrats will continue to encourage the federal government to adopt such a strategy because we believe it is the only effective way to save and add to the 250,000 jobs that exist in the forestry sector, stabilize and eventually grow the economies of Canada’s 250 plus forestry dependent communities, and help our forestry companies and mill operators regain solvency and generate sustainable profits for years to come.