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October 27, 2017 5:51 pm

“We are not going to be rattled”- says Head of BC Lumber Trade Council

Tuesday, April 25, 2017 @ 11:18 AM

Prince George, B.C.- “This long standing fight needs to end”  those are the words of Susan Yurkovich, President of the BC Lumber Trade Council in reaction  to the  countervailing duties levelled  against  Canadian lumber exports to the U.S.

Yesterday, the  U.S.  levelled   duties of 20.26% to Canfor , JD Irving 3.02%, Resolute 12.82%, Tolko 19.5%, West Fraser 24.12%, and 19.88% for all other British Columbian and Canadian producers. The reasoning behind the  different duties for each company  has not yet been revealed.

“These duties are unwarranted, and this determination is completely without merit,” said Yurkovich, “This new trade action is driven by the same protectionist lumber lobby in the U.S. whose sole purpose is to create artificial supply constraints on lumber and drive prices up for their benefit, at the expense of American consumers.”  She says the  action only creates volatility  in the lumber sector and that  U.S. producers cannot meet the demand within its  own borders  as  the U.S. produces about 32 billion board feet annually  and consumes  about 47 billion board feet.

This is the fifth round of  trade  dispute  on softwood lumber  and the allegations remain the same,  that  the U.S.  believes  the  forestry industry  in Canada is  subsidized because the  harvesting is happening on Crown Land.   Interfor President and CEO Duncan Davies says  the Canadian industry is not  subsidised ” This is just a way of the U.S. government putting political pressure on the Canadian Industry and the Canadian governments to find a  longer term settlement that will be more favourable to the U.S. Industry than has otherwise been the case.”  He   said  the process should  be  recognized  for what it is “Which I think was described by David Emerson, B.C.’s Softwood Lumber envoy as a shakedown,  and it shouldn’t be viewed as anything other than that.”

Yurkovich  says it’s not uncommon when  you are trying to negotiate a deal that one side tries to rattle the other “We are not going to be rattled.  We are resilient and we are going to  continue to fight this fight and we are ultimately going to be  successful.”




Christy is calling a Special cabinet meeting to discuss this issue . Great ! I’ve seen smarter cabinets at IKEA .

    What’s the point. It’s a federal issue – and besides – they might be out of a job this time next month.

      That’s exactly why we would be better off listening to an IKEA cabinet , rather than a toothless provincial nobody .

      Ataloss, at least Christy was able to become the leader of the BC Liberals AND the Premier of British Columbia!

      What have you accomplished lately, or ever for that matter?

      This US/Canada lumber issue has been going on for years, with previous Premiers, previous Prime Ministers and yes, even previous US Presidents! Please tell us all how John Horgan or better yet, how Andrew Weaver would resolve this! Oh wait, they couldn’t!

      It’s mostly a provincial issue. How we price public crown timber is at its heart, and that is 100% a provincial issue. It’s also why Irving gets the lower tariff.

      The Feds are there to back Canadian industry and trade, but they have no authority in the solution if it involves the crown land resources of the provinces.

    Christy Clark and the provincial liberals have nothing to do with this. I would love to see what the NDP would do about it. Not everything on the planet is The BC Liberals.

      Horgan showed how little he understands on the situation when in the side bar story blamed CC for inaction in not dealing with the issue before. This was on the way back burner for the states during the election cycle and once negotiations were in the early stages Christy appointed David Emerson to protect BC’s interests. Trump’s fingerprints all over this BS.

      Canada will once again prevail in court and have billions returned that our companies will use to buy more mills south of the line.

      Canfor AGM tomorrow might listen in to call to see what they have to say on the matter.

      BC liberals could have expressed an interest to talk about free enterprise principles in forestry and how that could translate to crown resource access at market pricesfor Canadian forest companies.

      The angry US Treasury secretary today said they were feeling insulted by the Canadian side for being dismissive of their concerns and trying to delay any negotiations.

Lumber is roughly $541.00 MBF Canadian. Canfor made 203 million last year on 4.2 billion of sales for a return on sales of 4.7%. If they are being subsidized to the tune of 20% as per the US, then without it, Canfor would have lost 600 million last year without the alleged subsidy.

It’s clear to anyone with a lick of honesty that there is no such subsidy – at least not at Canfor.

So obviously they don’t have any room in their profits to eat the tariff, so they will have to increase their price, and if the American consumer won’t pay it, they’ll have to find somewhere else to reduce costs.

But then again, Canfor owns U.S. mills, so what they’ll lose in Canada, they will make up in US sales – in which case, they may very well be indifferent to this tariff because they can now sell their US produced lumber for more.

    Lumber prices are not set by the companies but as a commodity that is traded on the Chicago Mercentile Exchange based on supply and demand.

    According to the commodity ticker on this site that sources from the Canadian exchange listed lumber at 395.50 + 3.4. whatever the 3.4 means, I have no idea, could be a percent i guess.

    In any case, your quoted price does not reflect accurately to the published value.

    Credibility only happens from reliability and accuracy.

      Price quote is in yankee dollars- up $3.40 today

      $1 US= $1.36 Cdn

      $395.5 x 1.36 = $537.88/mbfm Cdn

      “Credibility only happens from reliability and accuracy.” This from a guy who doesn’t know lumber prices are quoted in US dollars and my post says “roughly $541.00 Canadian”. So where’s my mistake.

      My bad for attention to detail. I foolishly assumed being we are in Canada, and that we would be using Canadian currency.
      I often neglect that commodities are expressed globally in USD.

    Yes, I understand that since 2006 many US mills that went out of business were bought up by Canadian Companies. So isn’t the left hand selling to the right hand with any losses suffered on one side being gained by profits on the other?

I hope this doesn’t get ugly with a bunch of back and forth taxes, sanctions etc.. would be a lose lose lose..

With trump you never know.. he is a bully..hates to loose…buts that’s all he is doing..

I think that we can agree that BC Mills get pretty cheap stumpage on beetle kill timber.,

I would imagine that they sell the beetle kill 2×4’s at market price, so one could conclude that BC mills are in fact getting a subsidy.

Furthermore negotiating the Softwood Lumber Agreement is the responsibility of the Federal Government who negotiates for all Provinces and Territories.

The Provincial Liberals hired David Emerson to look after BC interests, mainly because he negotiated the last agreement when he was a Federal Minister, so he has some experience on the file. In addition he was in the not too distant past the CEO of Canfor. The Federal Liberals also hired Brian Mulroney to help with the NAFTA file. Seems the Liberals need the Conservatives when it comes to negotiating.

The price of lumber almost doubled in the last year. With a low Canadian dollar you can rest assured that BC Mills have been making huge profits this year.

I suspect millions have been invested in their US operations.

    A lot of the subsidy comes from the fact the monopoly capital forest companies have huge tenure over public land they don’t have to pay for that allows them to then finance huge investments into productivity which increases the profit contribution margin by bringing unit costs down to pennies per foot board of production.

    American companies that have to buy their raw logs from a private log market don’t have the finance ability to compete on increasing their own contribution margin for profits, because they can’t finance the same kind of productivity investments.

    It’s the stated policy of ever increasing productivity, which is a race to be the lowest cost producer, that hurts the Americans more so than what our lumber companies pay for logs. This policy is subsidized by the monopoly over forest tenure rights to public land resources.

“The Federal Liberals also hired Brian Mulroney to help with the NAFTA file. Seems the Liberals need the Conservatives when it comes to negotiating.”

They hired Mulroney (I would call it a wise move) to give some advise based on his previous experience with the eternal softwood lumber harassment matter.

It is no different than hiring a consultant whose political persuasion is of no importance. I would call it a non-political appointment.

China, Japan, India and soon the EURO zone markets.

Besides, so far Canada has won every ruling and we should not have let the USA keep the illegally collected billion dollars to pay for its legal expenses, just a reminder!

The only constant in the universe is change, and so it goes with any economy.

Our BC economy was once about diverse resource extraction. This included a lot of logging, fair bit of mining, then farming and fishing.

Starting in about the 90’s, our global economy solidified to the petrol-chemical economy.

About four years ago, the petrol-economy effectively died. It was not for a lack of wells or in ground supply, it was and still is because “we” can now extract more oil faster than ever with less need for labour (jobs). This is all due to automation, mechanization, and wells that are operating with minimal labour inputs. Just last month, a Saudi Minister said that this would continue to be the case for the next decade or so.

In effect, we no longer have an economy driving global industry such as the last century, and we do not have or have not developed a replacement. We are looking at more and more unemployment. Our current employment participation rate (google it) has decreased in the last four years from 69.5%, down to the current 64.5%, and it is expected to approach 50% in the next decade.

Speaking of automation, McDonald’s, Home Depot, Super store and many other retailers are deploying self check outs and Amazon is developing a shopping basket that automatically pays for products deposited into it. So there will not be as many jobs for minimum wage. Pretty much if it is menial, tedious and repetitive, it will be automated and off loaded onto the customer.

These are not my projections, these are what I have been reading in the news and industry articles.

    Though your point has some validity, our employment participation rate is also a reflection of the baby boom retiring. A larger percentage of our population is at retirement age than ever before and that skews the results. That’s why Harper tried to push the retirement age to 67 because there’s actually a shortage of skilled workers, and if the baby boom participates in the workforce for two extra years it will mitigate the problem. However, in order to get elected, Justin called that all hogwash, and now his advisers are working hard to find a way to kick the OAS entitlement date to 67 again because many jobs go begging to be filled and there really aren’t enough workers to support the number of retirees.

      There was no shortage of skilled labor. Harper was only looking for cheap labor and that is why he let 350 thousand TFWs into the country.

Harper may have allowed more TFWs into the Country but that’s not the issue.

Who is hiring the TFWs and why is the issue.

The TFW’s will be the ones working on all the cheap paying jobs that Christy has created.

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