Facts have changed in lumber war—IWA

With billions of dollars of trade at
stake and thousands of jobs across
Canada at risk, the United States
announced October 4, 1991 that it
would proceed with a countervailing
duty investigation of Canadian soft-
wood lumber imports. The announce-
ment was a reaction to the move by
the Canadian government a month
earlier to cancel the 1986 Memoran-
dum of Understanding (M.O.U.).

Under the terms of the M.O.U.,
Canada had agreed to impose a 15%
export tax on softwood lumber
exports to the U.S. as a way of resolv-
ing a softwood lumber trade dispute.
In cancelling the M.O.U. Interna-
tional Trade Minister Michael Wilson
said that, after five years, the agree-
ment was no longer necessary because
of the changes that had taken place in
provincial stumpage systems across
Canada.

The countervail action will be the
third time in ten years that the US.
has launched a trade complaint
against the Canadian sawmilling
industry. The first attempt was in the
early-80’s and ended in March, 1983
when US. trade investigators found
no basis to the initial claims by the
U.S. industry. The second action
began in 1985-86 and ended with the
signing of a negotiated settlement,
the M.O.U., in December, 1986.

Although the current trade action
is being initiated by the U.S. govern--
ment, it is very clear that U.S. lumber

e@ Lumber shipments have been plummetting during the recession and the U.S. is
threatening with a countervail after the Canadian government cancelled the M.O.U.

lobbyists have played a major role in
mobilizing the government to take
these steps. When Canada announced
the cancellation of the M.O.U. on
September 3, 1991, the leading pro-
tectionist voice for the U.S. industry,
the Coalition for Fair Lumber Imports,
began to actively campaign for some
form of trade retaliation against the
Canadian industry.

Concentrating on key U.S. senators
and congressional representatives
from various lumber producing areas,
the Coalition was able to press for an
immediate U.S. response.

And when that response was
announced on October 4, the Coali-
tion’s chairman, C.T. Howlett, made
no secret as to how his organization

viewed the U.S. action. “We are very
pleased with this opportunity to show
that enormous Canadian timber sub-
sidies remain.”

Under US. trade law, a countervail-
ing duty can be imposed on imports if
the production of those imports is
found, to be subsidized and the
imports are found to be injuring U.S.
producers. The subsidy issue is inves-
tigated by the U.S. International
Trade Administration while the injury
question is examined by the US.
International Trade Commission.
Both agencies must find against the
import before a countervailing duty
can be imposed.

As with the previous two trade
‘cases, IWA-CANADA will play an
active role in these investigations.
According to Research Director Doug
Smyth, “the facts and circumstances
have changed so dramatically that
the Canadian industry can win this
time.” He pointed out that the real
challenge for the American lumber
producers will be proving injury.

“Since 1986, Canada’s share of the
U.S. lumber market has fallen mark-
edly, while at the same time produc-
tion in many parts of the U.S. such as
Ba pulie Northwest has declined as
well.”

Smyth added, “The only major lum-
ber region to increase production dur-
ing this period is the U.S. South,
which is where the real strength of the
lumber coalition lies.”

e IN SOLIDARITY WITH THE NDP — IWA president Jack Munro and others at

the union's National Convention applaud Federal New Democratic Leader Aud-
rey McLaughlin who correctly predicted NDP wins in B.C. and Saskatchewan.

GST will cost family
$570 more each year

Canadians are nearly 11 months
into living with the Tory Goods and
Service tax imposed by decree in
January of this year. In that time we
are seeing the unfairness and inequi-
ties that the tax has placed on work-
ing people.

According to the government's own
statistics the GST will now wind up
costing the average Canadian family
$570 more per year. This is much
higher than the $205 estimate that
the then finance minister Michael Wil-
son used in 1990 to try to sell the tax
to Canadians.

Despite the government's initial
claims that the GST would be revenue
neutral the tax has brought in over
$400 million in additional revenues in
the first 3 months of 1991 alone. This
was achie during the deepest reces-
sion since the early-1980's.

During this recession, which Brian
Mulroney now says is over (officially

1.5 million Canadians are jobless),
working people are being ripped-off
by the GST. Businesses have been
gouging consumers to take advan-
tage of the tax’s poor administration.
According to the government's own
GST Consumer Information office,
which cost taxpayers $15 million to
set up, government watchdogs haven't
blown the whistle on businesses who
have been abusing the system.
When consumers complain of price-
gouging and businesses are caught,
the government only requests that
businesses roll back prices. Consum-
ers are not being refunded the
amounts they have been ripped-off.
Prices of large ticket items such as
furniture and appliances have in-
creased despite Wilson's premise that
they would go down after the manu-
facturer’s sales tax was replaced by
the GST. Manufacturers have been
pocketing savings from the old tax
that was to be passed on to consum-

Ontario local president gets
Heritage Fund appointment

Brother Wilf McIntyre, president
of IWA-CANADA Local 1-2693, has
been appointed to the board of direc-
tors of the Northern Ontario Heritage
Fund Corporation. The appointment,
which was made on September 16,
will see McIntyre join two other lab-
our representatives and seventeen
other members representing business,
francophones, women and natives.

New Democrat Northern Develop-
ment Minister Shelley Martel, chair-
man of the fund said the recent
appointments show “that we are gen-
uinely committed to appointing pro-
vincial agency directors from a broad
cross-section of the community.”

Along with Brother McIntyre,
members from labour include CPU
Local 105, president Mark Weares,
and Sharon Graham, president of the
Sault Ste. Marie and District Labour
Council.

The Heritage Fund, first adopted
in June of 1988, receives an annual
allocation of $30 million to adminis-
ter. Since its start up more than 3
years ago the board has dealt out over
$115.6 million for more than 600 pro-
jects across the north. Most of the
funding goes to start up and sustain
small business projects.

Last year the fund backed up a $2
million bank loan to Atikokan Forest
Products, in order to let the mill
modernize to get into some European
markets.

© Wilf McIntyre, president Local 1-2693.

Brother McIntyre said that lab-
our’s participation on the board is
vital. He says that labour representa-
tives will be able to explain some uses
for the Fund that other Board Mem-
ber may be unaware of.

Also included on the board are Jean
Paul-Aube, chairman of the Timmins
Economic Development Corp; Phillip
Goulais of the Nipissing Indian Band
and Ron McDonald, chairman of the
Sudbury Regional Development Cor-
poration and a former Inco worker.

ers. Prices have risen in 32 of 44 broad
product categories measure by the
government.

While Canadians are getting clob-
bered by the new tax, foreign tourists
are eligible to receive GST rebates on
their purchases in our country.

When foreigners provide their
receipts to the federal government
they are given rebates, even though
they have to wait up to 6 weeks for a
cheque. In the first 6 months of 1991
the government paid out over $6.8
million in GST refunds to those from
abroad.

At the same time that we're refund-
ing foreigners, we are seeing a rise in
imports and a decrease in Canadian
exports to the U.S. In the past fiscal
year revenue from excise tax, which is
being phased out under the Canada-
U.S. Free Trade Agreement, has
dropped 7.5% to $25.6 billion.

In this current recession the GST
has added to inflation and hampers
the recovery of countless industries,
including the forest industry. The
GST has only made the future of
working people look more grim than
it ever has before.

a a am
LUMBERWORKER/NOVEMBER, 1991/3