Softwood Deal, Will It Be Yes or No? One Man's Opinion
By 250 News
Thursday, April 27, 2006 03:46 AM
-by Ben Meisner
There was a point in about six previous occasions that the US and Canadian governments had almost reached a deal on the soft wood lumber dispute.
On the last occasion it was the Province of BC that refused to take the fall for an open stumpage bidding system and that sent the deal into the ash can. This go round,it is the government of Ontario that is holding out for an 11% share of the 34% softwood market max the Yanks would like to hold us to before heavy taxes are imposed.
The deal which the Canadian government has brokered, gives Ontario between 8 and 9 % which Queen's Park says isn't enough. Remember the Feds will need to have the provinces on board before they can make a deal.
Will Ontario hold out for the bigger carrot? Of course, they have the bigger population than BC and more federal seats, something Stephen Harper dearly wants.
The return of 78% of the duties is a deal that most companies in Canada would gladly take. A bird in the hand is worth several birds in the legal world's bush and court action could result is less money for the Canadian companies. This money in the hands of some of the smaller companies operating in our region will be great, they will tend to invest it here as opposed to companies such as Canfor who may opt to spend their money buying up more US companies, and investing in China and Russia.
So where do we sit? Lets see if David Emerson, (who once threatened the Auto Pact and the natural gas fields as a means of getting the USA back to the table to deal on the lumber file) can make some convincing arguments. Ontario would like their way, no doubt so will Quebec if they find their allotment cut.
BC? Well we are the largest suppliers of fiber in the US, now lets wait and see how that plays into the equation.
I’m Meisner and that is one man's opinion.
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Posted by: owl on April 27 2006 11:36 AM
The American promise to make best efforts to identify reforms that would lead to free trade is meaningless. The last NAFTA decision said there was no subsidy under the existing system. The Americans have dealt with this issue in bad faith for years. There is no reason to think they will change now.
The proposal to have an export tax which increases as the price of lumber falls will lead to instability in the Canadian lumber industry. Downturns in American demand will fall disproportionately on Canadian producers.