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PUTT RUG NOTA

Z By MAURICE RUSH
; When Premier Bill Vander Zalm and his
d { Minister of forests, Jack Kempf, recently

Ounced a review of the forest industry

©Y Were engaging in another of the Socred

lection exercises to promise the public

2 Ything to win votes.

be €mpf said the results of the review will

| th known by mid-November. By that time

. a Oct Provincial election, now expected in

; | taal will be over. If it’s not, they could
j = Tesults of the review.

in Mong the items to be reviewed, accord-

ae to Kempf, are stumpage rates (address-

1} ‘8 the question of whether the province is

pting a fair return on the forest resource),

Eee sation and forest management prob-

; A review of taxation polices and the crisis
i the forest industry is long overdue. Major
+ . Nges are needed, but they will not come
_ 2M the Socreds or from the forest com-
* Mies. They will come from an aroused
| ‘4 blic demanding a complete overhaul of
| Sa Policy and an end to the special privi-
th €s the forest monopolies have enjoyed at

co rpense of the workers and the people of
7 fete claim being made by some people,
an by Taising the issue of stumpage rates

i, forestry taxes at this time we are playing
_ , the hands of the U.S. protectionists, is a

Of nonsense. To pretend that if we shut

P and close our eyes to the facts that we

Somehow silence the protectionists in
‘S. is naive.

“here are hundreds of articles, books,
ae papers by forestry experts and
ace stment and non-government studies
| Thsible to any American protectionists.

Ps

| Ot a deep, dark secret.
| ben; © forest industry has been hiding
| op wd the threat of a countervailing duty
EG. -C. lumber by the U.S. to silence criti-
SS Of the free ride they have been getting

_,S€ars at the expense of the public.

ony € threat of new, imposed U.S. duties
1 big. Umber must be fought. The U.S. has
: Whi aly acted out of its own interests
Wo ignoring the concerns of the rest of the
d. The protectionists were not con-

a out about 1,000 B.C. jobs, and possi-
M 3,000 more, or that the countervailing
$97.08 lumber could wipe out another
2 000 jobs.
4 cyte U.S. is seeking a free trade deal with

tr Nada which will give them greater con-
a Ove

| fone over-dependence on the U.S. market
lumber is the Achilles Heel of the B.C.
"Romy. Unless we diversify our markets

y find an excuse to postpone releasing

State of affairs in B.C.’s forest industry |

“tmed that the duty on shakes and shingles”

T the Canadian economy and our -

and turn to manufacturing and processing
of new forest products, we will continue to
be at the mercy of the U.S. — and so will
our jobs. While fighting the USS. threat to
the B.C. forest industry, we should reject a
free trade deal and begin now to develop
new policies to ensure a future for the forest
industry. ee

The issue of taxation on the forest indus-
try and forest management policies are mat-
ters which the people of B.C. must decide.
The U.S. cannot be allowed to dictate to us
what that policy should be.

However, it is also necessary to recognize
that the time has come for the B.C. public to
demand changes in stumpage fees, taxation
and forest management policies which have
denied British Columbians a fair return on
their forest resource, and which has allowed
the forest monopolies to devastate our
forests. Above all, we need to end the
giveaway of B.C.’s forest lands to a handful
of giant companies by phasing out the Tree
Farm licences.

In recent years the Socred government
has implemented major changes in taxa-

province.
Stumpage is the tax the forest companies
are supposed to pay the province for the

’ right to cut timber on Crown lands. The low

stumpage rates charged are a scandal —
particularly so since technological change in
the industry has enabled companies to
extract greater profit from each tree. The
forest companies have also devised many
ways of getting around paying even these
stumpage rates.

Under the administration of former
forest minister Tom Waterland, all regula-
tions on forest companies were relaxed so
that many companies were able to make
charges against their stumpage tax to the
point where many paid little or no taxat all.
In some cases, the government ended up
owing the companies for cutting timber.

Former ombudsman Karl Friedmann, in
his report on forest management policies
(released before he was fired by the
Socreds), gave an example of how compan-
ies are bilking the public by overcharging on
costs which the government allowed them
to deduct from their stumpage bill. He cited

£The worst culprit in this scandalous situation is
the forestry industry. Last year the province spent
$325 million to maintain the forests and collected

$125 million in revenue. ?

tion, sharply reducing taxes on resource

’ industries, especially forestry, and increas-

ing taxes on working people and the public
while cutting back on essential social servi-
ces. Bill Vander Zalm was part of this policy
while he was a member of the Socred
cabinet.

In 1979, 23 cents of every dollar in pro-
vincial revenues came from taxes on natural

resources. By the time of the 1986-87 budget

this had been reduced to 7.8 cents.

In that same budget the Socreds provided
for an expenditure of 7.3 cents of every
dollar to maintain the province’s resources,
with the result that the net revenue from
resources for the province this year is only
one half of one per cent.

The worst culprit in this scandalous situa-
tion has been the-forest industry. Last year
the provincial government spent $325 mil-

lion to maintain the forests and collected -

less than $150 million in forest revenues. In
addition to handing over millions of acres of
Crown forests under tree farm licenses, the
Socred government allowed the companies
to get away with murder when it came to
paying their fair share of tax revenues to the

the giant Westar operation in northwestern
B.C. It was billed $4,207,666 over a five year
period from 1980 to May, 1985, but was
allowed to claim credits of $4,063,816 and
ended up paying less than three per cent of
its stumpage fees. :

Some forest companies will not have to ©

pay any stumpage for the next several years
because they have been allowed credits’
which are some $37 million in excess of
stumpage fees. Under this scheme the pro-
vince pays these forest companies to cut the
timber, rather than the other way around.

Additionally, revenues paid the province
for wood chips are based on only half the
actual value of the chips. And scaling
practices — the methods used to measure
logs — are a scandal and do not include in
the measurement large portions of the
timber, formerly wasted, which is now used
in the production process and from which
the companies derive large profits. __

One of the last steps taken by Waterland
before leaving the forestry post was to allow
forest companies to do their own scaling,
which carried the honor system to ridicu-
lous extremes.

Strong measures are needed to cope with
the crisis in the forest industry. Following
are the major steps which need to be taken:

e A complete overhaul and increase of
the stumpage tax. This includes closing the
loopholes which allow companies to escape
paying the tax, increasing taxes on wood
chips and other forest products to reflect
their actual value, upgrading log scaling to
eliminate cheating, and adopting fair mea-
surement rules which take into account the
full value of timber;

@ Protection of the jobs and security of
woodworkers by eliminating contracting
out and giving woodworkers a say in tech-
nological change, and halting the export of

_ logs to protect jobs in B.C.;

e@ A massive reforestation program of
$1 billion in the next five years, as advo-
cated by forestry experts, to restore the
resource on millions of acres now devas-
tated or under stocked, and making the
forest companies pay a major share of the
cost of this program;

@ Measures to fight the U.S. threat to
impose new duties on B.C. wood products;
withdrawing from the free trade talks;
undertaking a new forest policy to diversify
markets, including an expanded Canadian
market, for B.C. wood products; launching
a federal-provincial program to develop
manufacturing and processing of wood
products in B.C. (These measures are essen-
tial to end the over-dependence on the
unreliable U.S. market and to provide a
future for B.C.’s forest industry.);

@ Phasing-out the present tree farm
licenses and restoring public ownership and
control of the resource, and establishing
public management of the forests on the
principle of perpetual yield and sale of
mature timber stands by auction to the
highest bidder:

The review announced by Bill Vander
Zalm and the minister of forests will not
come to grips with these problems. The
forest monopolies, with whom the Socreds
are closely allied, will fight these measures

tooth and nail. The heads of the major —

companies have already had one secret

meeting with Vander Zalm, which he has

never made public despite his claim that he
will run an open government. An in-house
review by the forestry department — which
the government now adovcates — can
never come up with the far-reaching new
policies needed in B.C.’s forest industry.
What is needed is a full public hearing at
which all interested parties are heard. But
the best solution would be the ousting of the

Socred government, which is responsible _

for the present state of affairs in the forest
industry, and the election of a new govern-
ment which will pledge itself to carry
through the above measures.

PACIFIC TRIBUNE, SEPTEMBER 17, 1986 65