Canada-U.S. softwood lumber deal
should not harm Canadian sawmill workers

By J. Douglas Smyth
IWA Research Director

This is part one of a two part article on
the softwood lumber deal. Part two will
continue in the next issue of the Lumber
Worker.

On December 30, 1986 Canada
reached a negotiated settlement of the
softwood lumber dispute with the United
States. That issue had been a serious
source of friction between the two coun-
tries since 1981. During 1983 a coalition
of U.S. sawmilling companies filed a peti-
tion to have the U.S. government impose
countervailing duties on Canadian soft-
wood imports. However, that application
was rejected on narrow legal grounds.

Between 1983 and 1985, Canadian
softwood lumber exports to the United
States surged by 2.5 billion board feet —
a21% rise. As a result, the U.S. Coalition
for Fair Lumber Imports filed a second
countervailing duty petition during 1986.
On October 16 of that year, the U.S.
Commerce Department reached a pre-
liminary determination requiring that a
15% duty be paid on all softwood lumber
imports.

In order to convince the U.S. industry
to withdraw its petition, the Canadian
government agreed to levy a 15% export
tax on all shipments of that product to the
United States. By taking this action, it was
hoped that the tax revenues would be
kept in Canada in order to create jobs by
expanding government reforestatin and
silviculture programs.

By Fred Fencepost

I love to fish. I fish every opportunity
that I get. When I worked as a chokerman
I used to throw my fly rod into the
crummy and cast a few on lunch break in
the nearest stream or lake. The other day
I sat down and added up how much
money] have spent on fishing equipment
over the last ten years. Now I’m not going
to give you the total right here and now,
but suffice to say that it was a hell of a lot
of money. | added on to that amount the
money spent keeping the boat up, pur-
chasing the boat, putting gas in the boat,
buying a trailer for the boat and doing
everything else I do for the damn boat. I
took that amount and divided it by the
number of fish that I have caught over the
past ten years (I keep records, three
books full @ $3.95) and then figured out
the cost of that fish by the pound if I had
bought it at the local market. The first
figure I came up with is $235.00. That
figure represents how much it cost me to
catch all those fish, $235.00 per pound.
Ouch ... right? It gets worse. If I had
taken that money spent on fishing over
the past ten years and spentit purchasing
fish at the store ... well, suffice to say
that I would own a substantial interest in
B.C. Packers.
8/Lumber Worker/July, 1987

Impact on Sawmill Jobs and Wages
In the weeks following the signing of
the softwood lumber agreement, some
industry spokesmen bitterly protested that
it would mean the end of the Canadian
sawmill industry. For instance, some ana-
lysts predicted that the 15% export tax
would eliminate between 17,000 and
30,000 Canadian sawmilling jobs during
1987, while conservative estimates
ranged between 5,000 and 8,000 posi-
tions. However, the International Wood-
workers of America (IWA) believes that
fewer than 1,000 job losses in the Cana-
dian sawmilling industry will be directly
attributable to the export levy, and those
will take place over a period of years.
Those protests were designed to per-
suade the Canadian government to
reopen negotiations with the Americans
in order to correct some perceived ineq-
uities in the lumber agreement. But IWA
members should be aware that a few
employers may become tempted to use
the job less threat as an excuse to demand
wage and benefit concessions from their
employees. Although we have seen just
one example to date, that line of argu-
ment may be tried by other sawmills
during the next market downtum.

Single-family starts set record
demand

For most lumber producers, the con-
cern over the impact of the export tax has
been greatly exaggerated. They have
failed to take into account the substan-
tially greater demand for lumber which
will take place during 1987. During 1986

I wouldn't want you to think that I am
complaining or anything, I did enjoy all
that fishing. But when you break it down
into raw numbers like that it makes me
think about taking up rug hooking or
something a little cheaper. My wife has
been telling me this for years. She says
that as she is wondering where her “mad
money” went from the cookie jar. “Just a
little something for the boat dear, you
know, colour sonar, depth charges, noth-
ing serious.”

Fishing is not a cheap sport. Well not if
you're serious about it, and I am serious
aboutit. I have been known to discard the
rubber ducky in the bathtub and replace
it with a new lure. The bathtub is a great
testing ground for new lures. Just be sure
and take the hooks off before you test.
Yes fishing is a gentle sport. The lapping
of the water, the steady purr of the motor,
the quiet and peace, the gentle cursing
when your line parts and $75.00 worth of
tackle heads to the bottom.

I wouldn’t change it for anything
though. It’s worth every penny, or dollar
or hundred dollars. I get great satisfaction
going to the freezer in the middle of
January and hauling out a nice fat frozen
$235.00 a pound coho. Yes sireee, that's
the sound of money not fishing reels we
hear every weekend all summer. I can't
help thinking that the fish are somehow
in on this conspiracy. I think maybe next

weekend I'll trya Jensen plug with $20.00

bills for flashers, it's so much more direct.

the construction of single-family houses
increased dramatically in both the United
States and Canada — 10% and 25%
respectively — over 1985 levels. That
trend should accelerate during 1987, as
mortgage rates continue to be offered at
bargain rates and amendments to US.
tax laws channel investment dollars away
from the overbuilt apartment sector back
to single family units. Since singles con-
sume approximately three times as much
lumber, sawmillers in both the United
States and Canada should enjoy sub-
stantially higher levels of demand this
year.

Data for the first four months confirm
that trend. In the United States actual
single-family housing starts have already
jumped by 10,100 units, or 3%, over the
comparable 1986 period. And during the
first quarter, seasonally adjusted Cana-
dian single starts surged by 26% over
1986 first quarter results. It is important
to keep in mind that the year-to-date
numbers are conservative because they
largely reflect the normally slow winter
building season.

As a result, North American demand
for softwood lumber during the first quar-
ter of 1987 surged ahead of first quarter
1986 results. During that brief period,
Canadian production increased by 482
million board feet, including a 286 mil-
lion foot rise in British Columbia, 136
million feet in Quebec, and 29 million
board feet in Ontario. At the same time,
U.S. sawmills increased production by
1.115 billion board feet. This means that

first quarter 1987 output of softwood
lumber in North America jumped by 1.6
billion board feet over the comparable
period during 1986. That increase
already accounts for 70% of the record
rise in North American softwood lumber
production which took place between
1985 and 1986.

U.S. consumer pays for export tax

In spite of record output over the past
two and one-half years, the pickup in
demand has already caused a significant
rise in U.S. dollar prices for lumber. Table
1 shows that during the week of May 29,
1987, U.S. consumers were paying $9
(U.S.) per thousand board feet more for
British Columbia S-P-F 2 x 4’s than they
paid on October 16, 1986, the date the
preliminary countervailing duty was
imposed. Stud prices were $17 per thou-
sand higher than they were last Fall. That
trend undermines one of the key argu-
ments raised by some industry spokes-
men: that the U.S. consumer would
absorb none of the impact of the export
tax, thereby leaving the Canadian indus-
try to carry the full burden. Table 1 shows:
that even when the export tax is sub-
tracted from May 29, 1987 S-P-F prices,
the Canadian dollar sales return for
dimension 2 x 4’s is just $29 per thou-
sand board feet below the October 16,
1986 level. And stud prices, which had
been running below historical levels last
Fall, were just $12 per thousand (Cana-
dian) less than October 16, 1986 levels
after the export tax is taken out.

After fourteen months, a strike at
Ziedler Forest Products, in Slave Lake in
Northern Alberta continues. The com-
pany is trying to break the union. The
pain and suffering being felt by IWA
members and their families is real and
tangible. That's not to mention the impact
that it’s having on the economy of Slave
Lake through lost wages and taxes.

The 60 IWA members on strike have
shown incredible perseverance and soli-
darity. All attempts by the employer to
split the membership have failed and the
picket line is still being manned with a full

Alberta strike continues

contingent. At present the issues unre-
solved are, concessions being sought by
the employer, the erosion of existing
fringe benefits, general heavy handed-
ness and the firing of 23 striking em-
ployees by the company.

It would mean a lot to the members on
strike in Slave Lake to hear from their
brothers and sisters across the country.
You can write letters of support to the
membership in care of Ziedler Strike,
Canadian Regional Office, 1200 West
Pender Street, Vancouver, B.C. We will
ensure that the letters are forwarded.

Continued from page 7

workers and thus myths such as the
“accident proneness” theory are still put
forth. These “pseudo scientists” argu-
ments shift blame to workers and away
from the hazardous nature of the work-
place. In union circles these are known as
the “unsafe act” or “dumb worker”
theories.

The CLC designated April 28 as the
Day of Mouming to recognize the thou-
sands of dead and injured workers across
Canada. In B.C. the IWA moumed 37
fatalities in the forest industry during
1976. Have we really come so very far?

What then is the future for Safety and
Health for IWA members? We are now a
Canadian National Union representing
workers across Canada, many of them in
diversified industries. We are not just a
union representing sawmill workers, log-
gers, plywood and shake and shingle —
we now represent furniture workers, tex-
tile workers, cab drivers, homemakers,
office workers and others.

We must be sensitive to needs of all
workers, We must rededicate ourselves to
gaining safe and healthy workplaces for
all of our members.

The International Labour Organiza-
tion and the World Health Organizations
have defined the objectives of occupa-
tional health and safety as follows:

Changin’

“The promotion and maintenance of
the highest degree of physical, mental
and social well-being of workers in all
occupations, the prevention among work-
ers of departure from health caused by
their working conditions. The protection
of workers in their employment from risks

We must be sensitive to
needs of all workers.
We must rededicate
ourselves to gaining

safe and healthy
workplaces for all of
our members.

resulting from factors adverse to health,
the placing and maintenance of the work.
ers in an occupational environment
adapted to his physiological and psycho-
logical abilities”.

If we were to adopt these objectives as
our goal we will have defined where we
must go in the future to finally and fully
involve, inform and protect workers. On
this the fiftieth anniversary of the IWA
we must rededicate ourselves to that
objective.