Does Canfor Now Have One Foot on Either Side of the Lumber Dispute?

Friday, January 20, 2006 01:32 PM

The US company Canfor has just purchased, is listed in a document leaked last week from Washington, as being a member of the US Coalition that has been trying to uphold the duties imposed by the US Commerce Department.

The membership of the U.S. Coalition for fair lumber imports has always been a closely held secret until its Washington law firm inadvertently e-mailed a report of its recent public relations activities to journalists. The list was published in Canada and one of the companies named on the list is, New South Cos. Inc. of Myrtle Beach, S.C. That is the same company Canfor announced it had purchased after 80% of the shareholders approved the deal.

Canfor purchased all four of the New South companies headquartered in Myrtle Beach for a sum of $205 million US. The company imports European SPF and European OSB and exports that lumber to Japan and China.

In the USA, European lumber is not subject to the tariffs that are imposed on Canadian lumber. 46% of the lumber New South sells, is imported from Europe.

The US Lumber Coalition has been trying to have the $5 billion dollars in countervailing duties that have been imposed at the border, divided amongst its members.

As for Canfor's position with respect to New South’s membership in the US Lumber Coalition, Canfor Manager of Public Affairs and Corporate Communications, Lee Coonfer says "We are hoping to have the deal closed by the beginning of the second quarter (March 2006) and after we have closed the deal, then we will look to see whether we should be a member of the US Coaliton or not."

Coonfer adds, "The political optics of this thing are huge on both sides of the border, so we want to close the deal first, given that the softwood lumber dispute is in the political realm"

The deal raises this question, if the US Commerce Department carried on with the Bird Amendment, which calls for the money to be split amongst US producers, would Canfor qualify for some of the money paid for by Canadian producers?

It is estimated Canfor paid $1 billion into the countervailing duties fund.

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Posted on Friday, January 20, 2006 01:32 PM in News by 250 News

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Comments

Posted by: fedup on January 20 2006 2:30 PM

Canadian companys buying US companys this is awsome and I hope it works in Canfors favor in someway.Many folks begrudge Canfor but this company has supplied jobs for many in P.G.and if they do good so will we.

Posted by: McDuck on January 20 2006 11:49 PM

This all sounds fishy. If Canfor gets a kickback, or a split of the collected tarrifs collected from Canadian lumber producers exporting to the US, is this not a conflict of interest, making it unfair for other Canandian wood producers exporting to the US? A large company like Canfor is not considered a monopoly by definition unless it uses coersion on other competitors in the industry. If Canfor gets a split of the tarrifs paid by other Canadian companies by purchaseing New South, a company tbat belongs to the US Coalition, is it not in a way in a position of coersion, and therefore a monopoly? In other words, will this deal, be a disincentive for other Canadian softwood producers to compete for US markets? Is Canfor buying into the USA's protectionist mercantile policies, a policy that encourgages exports and discourages imports by the use of tarrifs? So much for Capitalism and Free Trade!

Posted by: diplomat on January 21 2006 8:25 AM

The position of the Canadian Government during all the NAFTA and WTO negotiations has been that ALL the collected duties must be returned to those who were forced to pay them illegally.

It has been a long process but the US lumber lobby is running out of options for more appeals.

Some of the "Canadian" companies are not really Canadian, like most of our industry. They are foreign owned.

Hopefully a new more Bush friendly Canadian government will not roll over and tell the Yanks to keep the money.

Posted by: McDuck on January 21 2006 11:34 AM

Canfor Ownership. By doing a little bit of digging on the Canfor website, I found that James A Pattison owns 19.93% of the companies common shares. As of October 28, 2005 there were 142,510,396 common shares outstanding. 19.93 percent of those shares at Canfor's current market price of $14.00 per share equates to Jimmy having $39,763,248 invested in this company. Is this the same Jimmy Pattison of Save-On-Foods and whatever else he owns? Not bad for someone who once was a used car salesman. Is there a way finding out the country of origin of other Canfor investors? Canfor may just be one of the few Canadian companies that are not owned by the Americans. US ownership of most Canadian companies amounts to economic emperialism and colonization. Who needs guns to take over a country anymore? Canada, oh Canada, the 51st state.

Posted by: diplomat on January 21 2006 3:43 PM

>"So much for Capitalism and Free Trade!"<

Well, that is the system we have here. It is not illegal.

I visited a socialist workers' state - the DDR, i.e. the East German Democratic (!) Republic.

A tankful of gasoline was a month wages and if you wanted a car (made out of fibre-glassed cardboard) you had to put down your money ten years ahead of time - no options, no colour choice.

The state owned everything and the people lived like vegetables - totally controlled by the socialist cadre (bosses) who owned hidden mountain villas and secret shopping facilities where every conceivable import was available - though unavailable to the ordinary socialist comrade.

There were fully armed soldiers everywhere making sure that no one tried to express any dis-satisfaction.

Oh, and there was only ONE party to vote for: the Socialist Democratic Unity party.

Poland, Hungary and others had the same system.

People risked their lives escaping from this paradise that had no corporations and no capitalists - many were shot dead.

These conditions still existed a short 16 years ago!

We don't have that much to complain about here, in my humble opinion which is based on actual experience.

If the agenda is to drive the corporations out by making them unprofitable or unable to compete - well, I am sure that not everyone in Canada would support it.

But, to each his own.

Posted by: McDuck on January 22 2006 9:33 AM

Diplomat - I am not proposing socialism, communism, or any other form of government or economic system. I am a capalist, but what I don't like is when the US companies wobble on the principles. They revert back to mercantilism policies whenver it suits them. Even their lawmakers have agreed that they should give the tariffs back to Canada. But they have not done this yet. Why? Because they have too much power over the governments. I quote from Thomas Jefferson. Nearly two hundred years ago, he said, "I hope we shall take warning from the example of England and crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our Government to trial and bid defiance to the laws of our society." Abraham Lincolm expressed the same concerns way back then. He predicted corruption in high places where to follow the rise of corporatism.
Does Enron, World.com, ring a bell? How many more?

Posted by: diplomat on January 22 2006 12:21 PM

Good post, McDuck! I wasn't trying to infer that you personally are pushing communism! I was commenting on the usual widespread custom in our political arena to bash the corporations and blame every conceivable problem we have on them!

It doesn't make sense because the very same people who are doing the bashing are the ones that need the jobs to put food on the table and pay the rent!

Union retirement funds, teachers' pension funds and personal RRSP funds carry shares of all the major corporations in their portfolios and depend on the corporations to make a profit, pay dividends and maintain or increase share value.

I don't believe that Canada (a relatively small player) can stop globalization. It is far too late for that.

We can, however, demand that corporations obey environmental regulations, provide good pay and benefits in return for a job well done and protect our health and safety.

:)-

Posted by: McDuck on January 22 2006 7:13 PM

Diplomat -- I am not sure if we should try to stop globalism. Instead of free trade, I would propose fair trade. We can't prosper at the expense of the environment and the people of other nations.

Certainly, corporations are not the only ones deserving of a bashing. Governments too need the citizen tax payers to keep them accountable. Our election tomorrow will likely show how Canadians don't tolerate arrogance and corruption from our leaders.

Bureauracies are another area that need to be more accountable. They are so full of redtape that they make it difficult and sometimes impossible to get them to respond to someone's special needs.

You mentioned in a previous post your experience in a socialist country where the state owned everything and where the bosses lived in hidden mountian villas with every conceivable material luxury at hand.
This situation has a parallel or similarity in this country, where the heads of our corporations with their multi million dollar salaries and stock options. It brings up the image of Jimmy Pattison sitting in the comfort and luxury surroundings ofhis yacht, sipping on expensive Bourdeau. It begs the question. How much money does a man need?

Well, here in this country we were once called citizens. In this country and other democracies, we are now reduced to the lowly status of consumers. What we have to say doesn't mean much anymore. The economic system has pacified us with cheap imported junk. But, many of us concluded that it didn't add much to the quality of our lives. When we got tired of the junk we took it out to the curb, to have it buried into overflowing landfills.

It's much more pleasurable and empowering to discuss with each other our opinions. To debate, to learn something from each other, to bash governments, corporations, etc. I feel more like a citizen now, now that I took the garbage to the curb.

Posted by: diplomat on January 22 2006 8:13 PM

McDuck, you make some good points.

Jimmy Pattison was trying to pay his own way through university, i.e. he had very little money. He supplemented his meagre resources by buying an old clunker. Then he fixed it up a bit and sold it to a fellow student who needed some cheap reliable transportation. This idea worked very well for him, so he kept doing it.

Soon, he was in the used car business. The rest is history. He is an entirely self-made millionaire.

Does he need all the money he has? Of course not. All the really valuable things in life can't be bought with money.

You get a kick out of bashing corporations and the government - well, that is ok, but constructive criticism is always (or often) appreciated as are better ideas of doing things.

This site can be a forum for bashing - but it doesn't have to be just that.

We may be inviting more opinions if we give those who are doing a good job a kudo every once in a while too.