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October 27, 2017 5:07 pm

Cullen Concerned for Future of Small Mills

Wednesday, June 14, 2017 @ 10:24 AM

Prince George, B.C. – With  no agreement in the Softwood Lumber  dispute  in sight,  Skeena Bulkley Valley MP  Nathan Cullen is  concerned  for the future of small mills.

The Federal Government recently announced an assistance package for communities and workers negatively impacted by  the  countervailing duties  imposed  by the United States .  Many small mills do not have the financial capacity to weather that  monetary storm.

Cullen says  the  assistance package is re-circulated money ” it was money that was  already planned and they just rolled it into one to  reach a more significant number.  My worry  is that, in particular, some of the smaller mills that operate in the North.. They don’t have the cash reserves  they can’t sustain  prolonged  attacks against their product., which is obviously the American plan to wipe out more and more  producers on the Canadian side.”

He says this dispute is different than the last time because  more of the major producers have investments in the United States  “They were an important ally in fighting softwood last time,  My concern is that their enthusiasm, their energy is not going to be as great because they have placed  a bet on both sides of the table.”

The assistance packaged announced by the Federal Government includes  dollars to diversify markets,   something  Cullen says  is a long  term  strategy that won’t help  small communities right now  “That’s a mid to long term strategy.  If they are willing to get out and do  some heavy lifting this season,  right now,  and open up  those markets we (the NDP )  would be interested in that, and some compensation for workers who may be going to  lose their jobs because of these illegal tariffs.”

He says there is no point in offering forestry workers  retraining  for high tech sector jobs “Give us something concrete  that will  work in the communities in which these workers live.”


What we need is for the Chief Forester to announce the Annual Allowable Cut, so we can see where we are and where we will be in the next 10/20 years. If we do not have sufficient timber available, then that will kill off these mills faster than any duty applied by the Americans on BC Lumber.

At present the low Canadian dollar, and the high price of lumber has made millions of dollars in profits for all lumber mills in BC. and if the situation stays the same they will continue to make money even with the duties.

The problem is that the smaller mills have to pay the duties retroactively to Feb. 1st, 2016 while the larger mills, ie; Canfor, Interfor, West Fraser, etc have been exempted from these retroactive payments. (No one seem to know why).

What we need is for the BC Government perhaps in conjunction with the Federal Government to gaurantee loans made by the smaller lumber companies to pay the retroactive amounts. If they can borrow the money, then they can stay in the game.

This dispute could take five years, and if it follows the same pattern of previous disputes once its settled and if Canada wins then the money for the duties comes back to those mills that paid it.

So its a waiting game, and we need this new Government to get working on this file with a view to keep these smaller mills running.

    Should read retroactive to Feb 1,2017 not 2016.

In this article (http://www.globeinvestor.com/servlet/ArticleNews/story/GAM/20170501/RBCDSOFTWOODDUTIES) they talk about retroactive tariffs. I would assume that the big companies watched closely their exports to ensure they didn’t go over the 15% threshold.

And the US has nothing to lose in this… when a settlement was reached in 2006 the US kept about 20% of the more than 5 billion dollars Canadian producers paid in duties.

The whole softwood lumber dispute is a Wall Street driven plan to consolidate the forest industry into monopoly capitalist hands. If they can’t own our forest resources directly then they want to own the last 3-4 corporations standing when the dust settles. The dispute has nothing to do with economics or so called subsidies and market share IMO.

The only way to stop this IMO is to create a crown corporation that stands between the logging industry and the forest manufacturing industry, with an open log bidding market brokered by the Crown agency. We need to ensure we have a free enterprise forestry side of the market in the long term, and from this we would have the industry capital to ensure we have capital formation for smaller enterprises on the manufacturing side that can get fair access to the public forest resources.

Otherwise Wall Street monopoly capitalism will prevail and we will all be subjects of the banksters on Wall Street which will own all the productive capacity of our forests and even the independent loggers will be price takers of the monopoly corporations that will in effect own our forests and the communities they operate from. This is the path we have been led down by our politicians for the last 30 years.

    mThe ‘Crown corporation between log supplier and manufacturer’ theory sounds good, Eagle, but in practice it’s highly unlikely to ever work. Mills that export would never be able to get the kind of financing they need to remain competitive globally if they were solely dependent on open market bidding.

    That works to an extent in the USA only because the USA can internally absorb all the softwood it produces. We can’t do that.

    Even so, there are very few US lumber companies solely dependent on open market bidding. Most have long term timber supply arrangements, usually with private forest land owners, and open market wood is only a part of their overall log supply. The last major one I recall trying to operate solely on open market wood was WTD industries, after it reorganised and was coming out of a Chapter 11 bankruptcy, and couldn’t get long term credit. It didn’t last too long.

    The reason small mills are threatened is because their profits, taken as a percentage of their sales, are FALLING. This is true of large mills, too. Only the larger they get, the longer the deception this isn’t so can be kept up.

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