Today’s announcement by the Quebec and federal governments to convene a joint committee on forestry issues is cold comfort for 250,000 employees and close to 300 forest-dependent communities from coast to coast struggling to stay alive.
Since the start of the recession economic conditions for the forest industry have deteriorated at an even faster pace than was previously anticipated, with new challenges cropping up almost daily.
“Four weeks of bureaucrats talking to each other is not what we anticipated. Implementing existing programs and measures contained in January’s Budget is important but it isn’t an adequate response given the severity of the crisis and developments of recent weeks,” says Avrim Lazar, President and CEO of the Forest Products Association of Canada (FPAC).
“The Canadian forestry sector lost 50,000 jobs over the past two years. More than 250 mills have closed or suspended operations over the same time period. The forest industry in Canada can’t wait around for more discussion about what governments need to do. We know what needs to happen at the national level. Let’s get on with it before thousands more lose their jobs” says Lazar.
The urgent action needed:
- Counter US black liquor subsidies: The U.S. government is providing billions of dollars of subsidies to the pulp industry for the renewable fuel that they produce and use in their mills (“black liquor”). If the federal government doesn’t act to level the playing field within the next two months the damage done to the industry in terms of job losses will be irreversible.
- Modernize provincial wood policies: Provinces own most of the wood used in Canadian mills and for too long has managed it with an eye to short term politics rather than long term economic growth. For example, Quebec has among the highest wood costs in the world and antiquated wood allocation policies that have stalled urgently needed investments. This must change.
- Provide for a competitive national rail transportation system: The two national railways have monopoly power over many rural communities and provide poor service and inflated prices that make our mills less competitive. The federal government must intervene to end this abuse. Rural Canada and its industries are entitled to competitive rail service and rates.
- Modernize tax credits for R&D and capital investment: Ottawa’s main incentive for industry R&D is a tax credit that companies can’t take advantage of during recessions when they’re not profitable. These tax credits should be refundable. Accelerated tax credits for capital investment and the tax loss carry-back need to be extended to spur badly-needed investment.
- Ensure Access to Credit: In today’s economic climate, commercial credit markets remain sluggish putting sound companies with good business strategies at risk. The federal government must move more aggressively to implement the measures announced in the Budget to provide more credit to businesses.
- Support for green transformation: The forest products industry is by far the largest generator of renewable energy in Canada today, producing enough energy to replace three nuclear power plants. Ottawa needs to create a national green energy policy that recognizes existing investments and spurs new investments in clean, green power in our mills.
Mr. Lazar underscores the need for action on addressing forest sector woes that’s national in scope. “What is done in one region will affect the fate of all regions especially if the sustainability of the Softwood Lumber Agreement is impacted. We don’t need our national government exacerbating regional tensions,” he says.
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FPAC is the voice of Canada’s wood, pulp and paper producers nationally and internationally in government, trade and environmental affairs. Canada’s forest industry is an $80-billion dollar a year industry that represents almost 2% of Canada’s GDP, and 11% of Canada’s manufacturing GDP. The industry is one of Canada’s largest employers, operating in almost 300 Canadian communities and providing nearly 700,000 direct and indirect jobs across the country.
For more information, contact:
Forest Products Association of Canada
Laura Ballance Media Group
(604) 726-8350 (cell)
(514) 288-8500 ext: 234