jobless rates shoot higher

he Liberal government's cuts to this country’s
Unemployment Insurance program consti-
tute one of the most mean-spirited attacks
ever made on working people. Recent an-
nouncements that the feds will cut the pro-
gram by $2.2 billion over the next 41 months
will make it tougher yet for workers to get
support during periods of unemployment.

Statistics Canada says that there is an official national
unemployment rate of about 9.5%. But even that figure
does not really reveal the true unemployment picture.
Thousands are simply no longer counted because they
have given up looking for work or have accepted part-
time work to make ends meet. If you count them too, to
the real unemployment rate would be close to 20%.

However, even more disturbing, is the fact that across
Canada only about 37% of the jobless are actually eliga-
ble for U.L benefits. Those that are not have already
fallen on to provincial welfare rolls or have been left
abandoned by governments.

As we all know, the federal government has been
slashing welfare transfer payments to the provinces at
the same time, leaving the provinces’ welfare systems
rupturing at the seams.

Looking at B.C. alone, in 1990 about 86% of the unem-
ployed where eligable for U.I. That dropped to 66% in

1992 and 48% this year. Labour Minister Dan Miller esti-
mates, that when the new cuts take place, around 35%
of the province’s unemployed will qualify.

The B.C. government estimates that 120,000 people
will lose all or part of their benefits following the up-
coming changes. That will work out to about a $400 mil-
lion loss for the province.

In Ontario only 35% of the jobless can now get U.L., as
they have been forced to work longer for lower bene-

fits. Less than 5 years ago about 87% of the unemployed
could collect.

In Atlantic Canada 130,000 fish plant workers are go-
ing to have their weekly benefits cut from $220 week
this year to $172 a week next year. And the year after
that, benefits will be reduced to $150.00 per week.

So when the Federal government goes around touting
new and lower U.L.C. statistics it is lying to the Canadi-
an people. It is making it tougher and, in many situa-
tions, impossible for working people to get benefits. Un-
employment is not dissappearing but the U.I. program
is.

Liberals cut U.I. while the
4

The Chretien government is going to make it harder
for repeat users of U.I. Each time a worker makes a
claim, benefits will be reduced. Those who have collect-
ed more than 20 weeks of benefits over the last 5 years
will be paid less. In short, those who need U.I. more will
be less able to get it.

The entire U.I. system is paid for by workers and their
employers. Yet its terms are being dictated by a careless
and vindictive federal government that is looking at the
surpluses in the UI. system to help it cut its general bud-
get deficit.

By the end of 1996 the U.I. fund should have a surplus
of about $5 billion. That surplus could climb to $9 bil-
lion by 1997.

: It’s time that our national U.I. program was allowed to

‘ operate in a way that makes sense to the millions of

Canadians whose contributions maintain and support
that program.

‘ The Chretien government has shown that it sees U.I.

. as just another way to unload its deficit hysteria on

working people and does not understand how to pro-

tect important social programs.

It should stand aside and let labour and employers
operate and manage the system. That's the only guaran-
tee that U.I. will be maintained as a true insurance pro-

gram for all.

« LUINBERUORKER

Official publication of 1.W.A. CANADA

GERRY STONEY .. President
NorMAn Garcia NEIL MENARD ... Ist Vice-President
Editor FRED MIRON , . 2nd Vice-President
WARREN ULLEY . . 3rd Vice-President
5th Floor, HARVEY ARCAND ... dth Vice-President
1285 W. Pender Street TERRY SMITH . . Secretary-Treasurer

Vancouver, B.C.
VG6E 4B2

BROADWAY: +> PRINTERS LTD.

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Canadian provinces negotiate with U.S. on softwood lumber

by Doug Smyth
Research Director,
I.W.A. CANADA

During December, 1995 all
of the major softwood lumber
producing provinces of Cana-
da entered into serious nego-
tiations with the United
States. The U.S. government
pressed for those negotiations

because of the surge in Cana-
dian ‘softwood lumber im-

ports that have taken place
since 1991. Between 1994 and

1995 a large increase in ship-
ments from Canada occurred
at the same time as a severe
decline in U.S. production. As
a result, the Canadian share
of U.S. consumption jumped
to 36 percent - well above the
28 percent mark work record-
ed in 1991.

Because Canadian housing
starts collapsed to their worst
level in 30 years, total soft-
wood lumber consumption in
Canada dropped by 1.5 billion
board feet during the 1994-
1995 period. However, the de-
cline in the relative values of
the Canadian and U.S. dollars
permitted Canadian produc-
ers to step up softwood lum-
ber exports to the United
States by almost 800 million
board feet. At the same time,
however, U.S. lumber con-
sumption fell by 1.1. billion
board feet to 47 billion feet.

During 1996 modest im-
provements in single-family
housing starts and repair and
remodelling expenditures in
both Canada and the United
States will increase lumber
consumption. In Canada de-
mand will rise by roughly 200
million board feet. U.S. con-
sumption will jump by ap-
proximately 900 million board
feet, based on an increase of
60,000 single-family housing
starts and stepped-up repair
and remodelling activities.

At the same time, U.S. lum-
ber production will continue
to follow timber supply down-
ward, particularly in the U.S.
West. And the current cooling
of the recent overheated pulp
and paper markets will elimi-
nate much of the chip-driven
lumber supply that was gener-
ated in every major producing

region in North America. Be-
cause of the decline in U.S.
lumber production and the
withdrawal of some

Canadian output to feed its
own markets at home and off-
shore during 1996, the United
States could experience a pre-
liminary shortfall of half a bil-
lion board feet.

As a result of the depressed
markets during 1995, the U.S.
Coalition for Fair Lumber Im-
ports threatened to file anoth-
er countervailing duty peti-
tion against Canadian
softwood lumber imports un-
less the U.S. government
could negotiate some mean-
ingful changes in Canadian
provincial practises

Because of the strong
threat the U.S. government
set a date of December 15,
1995 for the Canadian
provinces to offer changes to
its stumpage and forest man-
agement policies which will
be acceptable to the U.S.
Coalition. This marks the first
time that the U.S. government
has entered into private nego-
tiations with each of the
Canadian provinces. During
the first half of December
US. officials exerted intense
pressure on all of the major
timber producing provinces
to make acceptable conces-
sions.

Because forestry in Canada
comes under provincial juris-
diction, and the conditions in
each province vary dramati-
cally, this approach makes
more sense than imposing a
national average countervail-
ing duty. Between 1994 and
1995 softwood lumber pro-
duction in eastern Canada
rose by approximately 150
million board feet, while
British Columbia output fell
by roughly 600 million board
feet. However, during the
three-year period between
1992 and 1995 eastern Canadi-
an softwood production
surged by 2.3 billion board
feet. At the same time, B.C.
output dropped by 474 million
board feet. Over half of the
eastern Canadian increase
took place in Quebec, where
the volume jumped by 1.2 bil-
lion board feet over the 1992-

1995 period. Ontario sawmills
pushed up production by 800
million board feet.

Largely because Quebec
stepped up softwood lumber
exports to the United States
by over one billion board feet
between 1993 and 1995, total
shipments from eastern Cana-
da to U.S. destinations surged
by 1.2 billion board feet. Even
though B.C. exports to the

U.S.A. fell by 100 million feet
in 1995, the two-year total in-
creased by approximately 400

million board.

In separate negotiations
with the United States the
government of Quebec has al-
ready offered to substantially
raise stumpage and silvicul-
ture costs to the sawmilling
industry in that province. If
that offer is accepted, there
will be intense pressure to im-
plement a similar large in-
crease in Ontario.

Because the government of
British Columbia has already
implemented major stumpage
and silviculture cost increases
and will soon impose the ad-
ditional burden of new forest
practices regulations, the B.C.
approach will focus on border
controls. In a depressed U.S.
market they will function to
restrain B.C. softwood lumber
shipments to the U.S.A. to be-
low a predetermined percent-
age level. During 1995 B.C.
lumber accounted for 21 per-
cent of total U.S. consump-
tion.

Given the great time and
expense that will be required
to fight another countervail-
ing duty case when Canadian
imports now account for 36
percent of U.S. consumption,
this approach makes sense. It
does not hinder B.C. sales
during normal or highly active
markets. Moreover, it allows
a solution to be fashioned
that meets the specific cir-
cumstances in each province.

No matter which solution is
found, it is important to un-
derstand that during the sec-
ond half of the 1990's rapidly
declining timber supplies will
continue to increase U.S. de-
pendence on Canadian soft-
wood lumber imports.

LUMBERWORKER/DECEMBER, 1995/5