| Subject: U.S. wants B.C. to create timber auction |
Author:
JOE HUEGLIN
|
[
Next Thread |
Previous Thread |
Next Message |
Previous Message
]
Date Posted: 12:12:58 02/26/03 Wed
Author Host/IP: d150-99-156.home.cgocable.net/24.150.99.156
U.S. wants B.C. to create timber auction
Gordon Hamilton
Vancouver Sun
Wednesday, February 26, 2003
[]
The United States has completed its road map for Canada's provinces to gain free trade in lumber, saying if provinces can prove they have eliminated policies that confer subsidies, the countervailing duty will be lifted.
Key to the new U.S. policy bulletin, to be published early next month, is the establishment of a market-based pricing system for timber sales, something the U.S. says will end once and for all its claims that provinces like B.C. subsidize their forest industries.
B.C. currently sets prices through an administered system that sets revenue targets, a system that has been the focus of U.S. industry complaints that the province subsidizes timber companies here by offering timber at non-market prices.
The policy bulletin was viewed by some industry leaders attending talks in Washington as an intrusion on Canadian sovereignty because it is basically telling the provinces how to set resource policy. B.C. Forests Minister Mike de Jong refutes that charge, saying this province will only make changes that it deems good for the provincial economy.
The bulletin is still receiving some finishing touches, according to the U.S. commerce department, but was in wide circulation Tuesday.
However, don't expect a quick resolution to the softwood dispute now that the bulletin is ready to go. It could still be months, possibly more than a year, before B.C. would be in a position to apply for relief, said forest industry consultant Peter Woodbridge.
"The wish may be to get it out the door quickly, but reality is different. You can't make huge changes of this magnitude without a great deal of forethought. These changes are going to be huge and we have been at it for a long time already."
The U.S. wants B.C., referred to in the document as "Province A," to establish an auction for enough timber to create a vigorous market. Stumpage rates for the remaining timber held in long-term tenures would then be based on the auction prices.
Quebec, referred to as "Province B," would adopt a different approach. As Quebec already has a private market for timber, the U.S. wants that province to put some forest lands into parks or reserves to reduce the percentage of the administered provincial harvest relative to the private timber market.
Ontario, called "Province C," could base its timber prices on market-based prices outside the province, where cross-border comparisons are more accurate than in B.C.
Other policies provinces must change include:
- Requirements to process timber from Crown tenures in specific mills or mills they own, called appurtenancy. Appurtenancy limits an operator's ability to shut down mills or rationalize lumber production in response to market conditions. Quebec gets some relief from this provision.
- Minimum cut requirements, which force forest companies to harvest their timber allocation within plus or minus 10 per cent over a five-year period. Commerce argues this policy requires companies to cut even when markets are poor, further depressing prices.
- Mill closure restrictions, which dictate how many days a mill must operate for the owner to have access to Crown tenures, again forcing non-market conditions on an operator.
- Minimum processing requirements, which require some processing of the timber be done before it can be shipped from the province. It is here where the U.S. has softened its line for B.C., saying it will evaluate the effect this policy has on stumpage prices, not insist that the policy be scrapped. The U.S. has a similar policy, restricting log exports from federal and state-owned lands.
- Long-term tenures, which the U.S. claims provide too much security from market forces for forest companies. The U.S. is not demanding they be scrapped, but taken into account in setting stumpage rates.
- The U.S. also singles out policies such as the chief forester's right to set the allowable annual cut for the province. The U.S. wants to ensure that harvesting decisions are based on sustainable forest practices rather than as a means of increasing supply to lower timber prices for forest companies.
ghamilton@png.canwest.com
[
Next Thread |
Previous Thread |
Next Message |
Previous Message
]
| |
Feedback: 