April 3, 2001
Kamloops Daily News


The spring forward into daylight savings last weekend was
countered by uncertainty at the end of the softwood lumber
agreement with the United States.  Longer days inspire
confidence, but British Columbians feel they are falling
back into U.S. protectionism.  

The fear is that the U.S. will impose duties on the
importation of our lumber which will result in layoffs in
the forestry sector.  The U.S. claims that our lumber is
unfairly subsidized through low stumpage fees -- those fees
which forestry companies pay for logs taken from Crown land. 
This may be true but it is not our real advantage.

Another claim by Americans is that they are just trying to
save us from ourselves.  They are trying to salvage what we
won't protect -- our forests.  This argument doesn't hold
water.  The hard choices between saving a resource and
exploiting it for jobs and money are easier made from a
distance.  It's easy to be an American environmentalist when
it comes to making policy for Canada.

In a case of bad timing, a study from the Sierra Legal
Defence Fund supports the American claim of subsidization. 
One of the study's authors, Mitch Anderson, says that "We
have lost over $120 million in stumpage shortfall over a two
and a half year period".  That's just in the interior of
B.C.  On the coast, there is an additional shortfall of
$224 million.

Forest companies say that the study misrepresents the facts
and is nothing but "cheap shots".  Forest companies say they
pay exactly what the timber is worth because much of the
timber has been damaged by the pine beetle. The Sierra Legal
Defence Fund counters that the "damage to the merchantable
timber itself is usually limited to discolouring the wood
with a blue stain."

Although forest companies may argue that the wood that they
log is inferior, and therefore they should pay less, no one
can argue that forest companies are collectively not paying
target fees set by the Ministry of Forests. 

Part of the problem is the complex stumpage fee system that
allows some parts of B.C. to pay less than others.  While
forest companies in Kamloops, for example, pay an average of
about $28 per cubic metre of wood, those in Golden pay about
$2.

Stumpage target rates are determined by combining variables
such as the value of timber, market conditions, and logging
costs in a formula detailed in appraisal manuals produced by
the Ministry of Forests.  The Ministry sets target stumpage
rates based on Statistics Canada evaluations of our wood
products.

That target must be met collectively by all B.C. licensees
but the each district pays a fee based on local
determination of timber value.  And this is the tricky part
of fee calculation, something called the "waterbed".  The
waterbed aims to distribute differences in stumpage rates
between different companies.  

But the advantage that Canadian lumber has is not stumpage
fees, even if they are too low.  Our lumber is priced
competitively on world markets  because of the efficiency of
Canadian technology.  Canadian sawmill technology, such as
that produced by CAE Forestry in Salmon Arm, is world class.

The stumpage fee debate is distraction to our real
advantage.  This distraction could be resolved if forest
companies paid fair value for logs as determined by the
Ministry of Forests.  After all, British Columbians deserve
a fair return on our resource. That's the first
step.

The second step is to restrict the flow of lumber into the
United States.  This is being done already in an attempt not
to provoke Americans into imposing tariffs against our
lumber.  But lumber flow must be dramatically restricted so
as to increase the value of lumber.  Because the American
construction industry can't do without Canadian lumber, this
will result in howls of protest. 

Americans will then claim we are trying to fix prices by
controlling the market.  Canada will immediately respond by
agreeing to free trade in lumber, which is what lumber
producers want all along.  

The difference between now and the future will be that the
there will be a fair return for forestry companies and for
the people of B.C. on this dwindling resource.

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