Renew the SLA 2006? … No thank you

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iwpabc.com – The Independent Wood Processors Association (IWPA) keeps hearing that BC’s forest industry wants to extend, or roll-over as is, the now expired Softwood Lumber Agreement. But that’s not quite true.

The Independent Wood Processors Association of BCWe do understand why the members of the influential BC Lumber Trade Council (BCLTC) want a roll over. They have exclusive and renewable access to the BC Public’s non-competitive timber resource. But the fact is that the majority of BC’s wood processors buy their wood competitively and don’t want a roll over. We may be small and we may only have the opportunity to make value added products from about 5% of the logs and lumber produced in BC, but there are a lot of us. Or should I say, there used to be a lot of us.

BC has lost over half of its small family owned and operated wood processors in the last dozen years primarily due to the SLA 2006 and SLA inspired Forest Policy changes which allowed control of the non-competitive harvest to be consolidated into a very few hands. 54 of the IWPA’s 107 member companies have gone out of business and there is a good chance that BC will lose the survivors if we have to endure another round of that Agreement.

If the BC Public’s timber was sold competitively, we would not even have a dispute with the Americans because they would have no grounds to launch one. But, with the exception of about 12 million m3 auctioned by BC Timber Sales, it’s not sold competitively and the companies that hold the tenure rights to harvest the BC public’s non-competitive timber like it that way. Hence, they are willing to continue paying a 15% Border Tax to keep it that way.

But those of us that compete for 100% of our wood supplies can’t do that. We don’t have the offset of a secure administratively priced timber supply. Without that offset, we can’t afford to pay a share of a Border Tax that exists for the purpose of allowing the big guys to continue to avoid having to compete for wood on the open market as we do.

In the Interior, we have a beetle ravaged declining wood supply and the commodity producing companies that control most of it are taking the profits made here in BC and investing in sawmills in the USA. They have bought about 40 of them in the last 10 years.

And on the Coast, we have one company that now controls 6.1 million m3 of non-competitive timber but they can only process about 4.0 of it in their remaining mills. So last year they cut down and exported 1.15 million m3 of the BC public’s timber in raw log form.

Meanwhile, we have a group of small family owned wood processors that actually live right here in BC and want to employ British Columbians to add value to increasingly difficult to procure BC grown wood fiber.

Unfortunately, SLA 2006 had us apply a 15% tax to the USA bound products of these little non-tenured wood processors for 6 straight years. But there was no tax if we sent the wood to China and employed Chinese to do the value added work. There was no tax even if it was subsequently sold to our former customers in the USA. It’s no wonder that the Coast Forest Products Association estimated that 27% of the lumber that its tenured members now sell into China is for remanufacture.

It should be fairly obvious that the members of the IWPA will not support a renewal of SLA 2006 and neither will the members of the US Lumber Coalition. So let’s get to the table and talk about something else.

The IWPA recognizes that those with exclusive access to non-competitive timber aren’t going to give that up even if there is an American imposed cost for not doing so. That’s their decision to make and they have made it, so let’s negotiate something that has them pay the entire cost of their decision. Let’s negotiate something that doesn’t have BC’s family owned non-tenured wood processors subsidizing part of that cost for them. Let’s negotiate something that won’t kill what remains of BC’s competitive sector value added industry.

If our Provincial Government is willing to negotiate something that removes the restraints that SLA 2006 placed upon the competitive sector and instead has the tenured companies pay the entire cost of retaining their exclusive access to non-competitive timber, the members of the IWPA will be able to get on with delivering the highest socio-economic benefit per cubic meter harvested from whatever share of the BC Public’s
timber resource that the Provincial Government allows us to compete for.

Russ Cameron – http://iwpabc.com/

Source: The Independent Wood Processors Association of BC (formerly known as the Independent Lumber Remanufacturers Association)