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© IWA's research assistant Phil Legg at Loggers’ Local Wage and Contract Conference.

Researcher sets stage
for 91 negotiations

COURTENAY, B.C. — In a presenta-
tion to the Wage and Contract Confer-
ence of Loggers Local 1-71 here on
January 19, IWA-CANADA’s Assistant
Research Director Phillip Legg told
delegates that the union can expect a
tough set of contract negotiations in
the B.C. forest industry this year.

Legg highlighted some of the antic-
ipated industry arguments against
wage and benefit increases in 1991.
Slumping demand for B.C. wood prod-
ucts in key markets like the United
States will figure prominently in the
industry’s approach to a new master
agreement.

An overvalued dollar, according to
Legg, and softening pulp and paper
markets will also be seen as argu-
ments given by industry negotiators.

On a more positive note the assis-
tant researcher said that lumber mar-
kets are always cyclical and the cur-
rent condition is not permanent. In
addition, according to Legg, economic
fundamentals will see a return of the
Canadian dollar to lower and more
realistic levels against its U.S. counter-
part.

“Companies in 1991, on the coast of
BC. certainly, are not in the quagmire
of debt that they were in the 1982
recession,” Legg told the delegates.

Legg said that compared to com-
petitors in the U.S. Pacific Northwest
and the U.S. South, B.C. producers
have a relatively stable supply of high
quality timber. Over the coming
decade as timber harvests come under
increasing pressure especially in the
US., some long term opportunities
should open up for producers in B.C.

But he also cautioned that log pro-
duction in B.C. has fallen substan-
tially from the record level reached in
1987. During that year the B.C.
coastal harvest reached 33 million
cubic meters.

Although Legg estimates that the
1990 coastal harvest has fallen to 25
million cubic meters, he felt that it
was unlikely that coastal logging
activity would retreat further to the
22 million cubic meter level recorded
in 1982. Legg pointed out that the
rebuilding of most coast mills over
the last eight years and the favoura-
ble shift of offshore currencies (e.g.
the Japanese yen) will help prevent a
repeat of the 1982 experience.

Legg noted that the immediate
problem for B.C. producers was the
softening U.S. lumber market which
normally consumes about 75% of
BC.’s annual lumber production. Legg
pointed out that while new home con-
struction activity was slumping in
1990, some positive developments

have been the recent decline in inter-
est rates, the larger size of newly

constructed single family homes and
the continued development of the
repair and remodelling market.

According to Legg, one bright spot
for B.C. lumber producers continues
to be the Japanese lumber market.
Although that market consumed only
12% of B.C.’s lumber production in
1989, it accounted for close to 25% of
the value of B.C.’s lumber exports.
One of the key concerns for B.C. pro-
ducers in the Japanese market has
been the decline in wood-based new
home construction. However, Legg
pointed out that because of the
increasing size of wood-based homes,
over half of the total housing floor
space built in 1989 was in the wood-
base category.

With many regions competing to
supply the Japanese market, the pros-
pects for B.C. producers is by no
means secure. Legg noted, however,
that the combination of timber sup-
ply problems in some of the supplying
regions such as South East Asia as
well as reliability and timber quality
problems in other areas should bode
well for B.C. producers.

The European market for B.C. lum-
ber has remained relatively constant
over the last five years according to
Legg. And for B.C. producers, the
U.K. continues to be the largest part
of that market accounting for close to
80% of the volume shipped to Europe.
Legg noted that with an inflation rate
9-10% and interest rates in excess of
14%, the short term outlook in the
U.K. was not positive.

Legg noted that the pace of current
settlements appears to be relatively
high in Canada. However, statistics
on those settlements tend to over-
state the real increases that have been
achieved in recent major negotiations
because the statistics do not ade-
quately distinguish between “up-
front” wage increases and “phased-in”
wage increases. Although up-front
increases may involve a lower per-
centage increase, it often generates
more income over a year than a
phased-in increase.

In addition, the speaker pointed
out that many of the wage increases
recorded recently involve sectors
where hourly wage rates are well
below the level currently available in
the IWA master agreement. Under
these conditions the percent and/or
absolute increases negotiated look
impressive because the existing rates
are so low. As well, many of the recent
contact settlements involved lengthy
strikes.

And finally, Legg noted that the
statistics do not include any assess-
ment of the value of benefit items
such as paid time off, pensions, health
and welfare, etc.

“We are dealing with a federal gov-
ernment which refuses to pay atten-
tion to the problems that are destroy-
ing the forest industry,” said IWA-
CANADA first vice-president Gerry
Stoney. E

Brother Stoney, speaking to the
Wage and Contract Conference of Log-
gers’ Local 1-71 in Courtenay on Janu-
ary 19, had returned in frustration,
along with IWA president Jack Munro
from a session of the high profile
federal Forest Sector Advisory Coun-
cil which met 5 days earlier in Ottawa.

During that meeting in Ottawa,
which included high profile represen-
tatives from industry, government,
and labour, two federal cabinet minis-
ters (Federal Forest Minister Frank
Oberle and Federal Industry Minister
Benoit Bouchard) heard critisism
from the IWA of the failure of the
federal government to take immediate
measures to counteract the recession.

The role of the committee is to find
out what the problems are faced by
the industry and convey them to the
federal government.

Stoney said the politicians were
told to abandon their high interest
rates policy which has “brought the
industry to its knees.”

When talking with Bouchard, Jack
Munro called for Bank of Canada
president John Crow’s resignation and
the lowering of the Canadian dollar to
78.5¢ in comparison to the American
dollar.

For over three hours, amidst House
of Commons uproar over Canada’s
role during the Persian Gulf Crisis,
the council met to hear the grievances
of major employer representatives
from such forest companies as Nor-
anda, Canfor, Repap, Domtar, Weyer-
hauser, and others.

Although Stoney reported that the
cabinet ministers were receptive, he
doubts their ability to persuade the
Mulroney cabinet to take action in a
positive direction.

“We've got an intransigent Federal
government which refuses to accept
the fact that we are an important part
of the Canadian economy,” said
Brother Stoney.

The forest industry is Canada’s

Government's inaction —
slammed by Union V-P

number one employer creating over +
1,000,000 direct and indirect jobs and
provides the country with over $40
billion in exports, netting the econ-
omy over $20 billion.

“We have also talked to Michael
Wilson to tell John Crow to lower
interest rates,” Stoney told the dele-
gates. “We believe that the only
rational for high interest rates is to
keep up the Canadian dollar up into
the 87 cent range.”

Stoney said that such action has
made the forest sector uncompetitive
with the U.S. and there is an apparent
possibility that the high dollar/
interest rates policy is tied to a back
room agreement between Canadian
and U.S. negotiators during Free
Trade Talks prior to the 1988 Federal
Election.

Canadian interest rates are 5 per- »
centage points higher than their us.
counterparts. Through the 1982 reces-
sion, our rates were only one percent-
age point higher.

Stoney decried the government's
complete lack of interest in helpin;
unemployed woodworkers. He sai
that, since early 1990, over 10,000
IWA members in Western Canada
have been affected by the recession
and criticized the government for
doing nothing.

“When auto plants in Ontario or
Quebec go down, all hell breaks loose
but when woodworkers lose their jobs
the government looks the other way,”
said Stoney.

The speaker said the Intentional
Trade Minister John Crosbie is unwill-
ing to wage a real fight to remove the
Memorandum of Understanding which,
in 1986, placed a 15% export tax on
softwoods going to the U.S.

Stoney said that since the Tory
government is at an all time low for
political parties (11% support in the
polls) that it “has made a decision as a
government that it is going under and
it might as well spend as much of its
term putting through as much of its
right wing agenda as possible.”

“The only problem is that the next
government will be spending their
time trying to unravel what the
Mulroney government has done.”

© Gerry Stoney, [WA-CANADA's National first vice-president said governments refuse

to help woodworkers through recession.

2/LUMBERWORKER/FEBRUARY, 1991