—— |

er |

National union foresees many

conflicts in the

e I.W.A. CANADA Research Director Doug Smyth gave audience an
overview of lumber markets.

Union researcher

Continued from page seven

sawmills began to ship lumber which
normally went to Japan to the U.S.
market. Thirdly, “J-grade” lumber
from the B.C. Interior flooded the
U.S. when the Japanese market fell
apart.

Lastly, and importantly, increased
competition from European lumber
exporters caused a drop in U.S.
prices.

Between 1996 and 1997 there was
a slight decrease in U.S. housing
starts to a total of 1.13 million units.
That decline, however, was offset by
a jump in the average home size.
There could be a further slips in
starts, but an additional jump in
house size in 1998.

According to Smyth, the state of
the U.S. market this year will depend

more on the revival of the Japanese
economy and the removal of those

temporary wood supply factors.

One-fifth of B.C.’s lumber produc-
tion, including 51% of Coast output,
shipped to Japan in 1996 when that
Sranet was hot. From January,
1996 to the end of March, 1997 the
province upped its lumber ship-
ments to Japan by some 350 million
board feet, over 250,000 of which
came from the Interior.

“In the second quarter of 1997,
the Japanese market simply went
into the tank,” said Smyth.

The Japanese mar-
het will see some
improvement in the
first half of 1999 as
economic stimulus
measures take effect.
- Doug Smyth

In 1997 overall Japanese housing
unit starts dropped by 260,000 units
from the 1996 level. Wood based
starts dropped by 19% (143,000
units).

That spelled disaster for B.C.
Coastal hemlock squares. In addi-
tion, J-grade 2”x4” lumber exports
to Japan from the B.C. Interior
dropped by 15%.

Added global competition from
Scandinavian and European wood
producers made things tougher in
the Japanese market. Scandinavian
laminated posts have been replac-
ing B.C. baby squares. In addition,
more competition from native Japan-
ese wood species, subsidized by the
government, has caused a drop in
the market.

Smyth predicted that the Japan-

ese market will see some improve-
ment in the second half of 1998 and
that inventories in that country are
being worked off.

Domestic consumption in Scandi-
navia, Finland and European coun-
tries have increased. :

Meanwhile devalued Asian cur-
rencies will make it tough for Scan-
dinavian countries to compete in
those pulp markets.

And when they don’t cut pulp-
wood, they don’t process just
sawlogs.

Addressing this year’s markets
for Canadian softwood lumber, the
I.W.A. research director said that
most provinces should profit under
the Canada-U.S. Softwood Lumber
Agreement. Lumber producers in
B.C., Alberta, Quebec, and Ontario
have quotas. All those provinces,
with the exception of B.C. have mills
which are running near capacity.

In 1997, Ontario lumber produc-
tion jumped by 650,000 million board
feet while, in B.C., it dropped by
420 million board feet.

Between 1996 and 1997 Ontario
and Quebec sawmills increased ship-
ments to Canadian markets, which
had a “significant” 1.2 billion board
feet increase in consumption. At the
same time, they decreased their
shipments into the U.S. Wood pro-
ducers from non-quota provinces
like Manitoba, Saskatchewan and
the Maritimes picked up their ship-
ments to fill that vacuum.

In B.C., Smyth said that “we are
in very difficult economic straits
and are suffering heavy losses.” He
said that stumpage costs in B.C. are
$21.00 per cubic meter higher than
in Alberta, $20.00 per cubic meter
higher than in Ontario and $14.00
higher than in Quebec.

He said that when other costs
that B.C. producers face, including
the costs of silviculture and the
costs of the Forest Practices Code,
are added into the equation, there is
a difference, between the B.C. Inte-
rior and Quebec, of $40 per cubic
meter ($163.00/1000 board ft.).

“The B.C. softwood lumber indus-
try can not compete with those kinds
of wood costs,” said Smyth.

“This is not just a matter of weak
markets when you talk about
Japan,” he said.”The industry with
the lowest wood costs wins the sale,
and B.C. must lower its wood costs
in order to survive.”

Smyth said that stumpage rate
targets for the B.C. Interior and
Coast regions, are set Statistics
Canada lumber indexes for the
regions.

He added that the Stats Canada
numbers are flawed and have to be
fixed. There also has to be a big one-
time downward adjustment of
approximately $10 per cubic meter
in wood costs in order to correct for
past errors in the Interior index.

woods in ‘98
pin

e Kim Pollock, Director of Environment and Public Policy, predicted that
the union could have a long, hot summer with radical green groups.

Up on a big T.V. screen at the
national officers and staff confer-
ence flashed a videotape of I.W.A.
President Dave Haggard, down on
the docks at last summer’s captur-

ing of Greenpeace vessels in Van-
couver harbour.

Said Haggard: “We’ve been fight-
ing corporations for in excess of 60
years in this province and this coun-
try and as far a we’re concerned this
(Greenpeace) is just one more corpo-
ration. The struggle for working
people continues.”

Following the clip, National Envi-
ronment and Land-Use Director
Kim Pollock addressed the confer-
ence and drew attention to the impor-
tance of Haggard’s quote.

“As far as the I.W.A. is concerned,
it doesn’t make a difference who is
going to take us on.” said Brother
Pollock. “It’s important to stand up
for our members no matter where
the challenge comes from.”

“It’s not just the future of our
members but it’s also the future of
our country’s economy that it is crit-
ically tied to harvesting timber,” he
added. In 1996, $32 billion of
Canada’s exports came from the for-
est industry.

Pollock said the I.W.A. represen-
tatives and members must brush up
on the organization’s forest policy
which calls for fairness and balance.

He said that it fights against “false
environmentalism” which calls for
the stopping of harvesting of old
growth timber.

“To do that would do little to solve

the problems that humanity faces,”
said Pollock, “but it would do a lot
to disrupt communities in this.coun-
try.”
He revealed that opinion research,
carried out by the union, shows
majority public support for the
actions that the I.W.A. has taken
against Greenpeace and other radi-
cal environmental groups. That
public support, he said, is crucial for
the anticipated battles that lay
ahead.

As is already taking place in west-
ern Europe, Greenpeace is lobbying
for a boycott of old growth timber
products harvested in Canada.

Pollock said that it is important
for the union to continue talking to
unions outside Canada and particu-
larly to get the I.W.A.’s message to
European trade unions which fund
Greenpeace while the organization
calls for boycotts that directly effect
Canadian workers and forest-depen-
dent communities.

On the home front, Pollock pre-
dicted trouble this summer with
Greenpeace and predicted that the
organization will take on-the-ground
actions in the mid-Coast region,
specifically at Ingram Creek and
Johnson Creek, where Western For-
est Products and International For-

est Products have their respective

road building and logging permits.

“Greenpeace is concerned about
how their extended supply lines can
be stopped in territories that have
I.W.A. members at work,” he said,
predicting that the eco-terrorists
will use helicopters to gather images
of logging activities for their Euro-
pean cempa ga

Pollock outlined other flash points
of interests in the battles against
radical environmentalists which
will occur in eee maclacagy

more possible confrontations i
TFL #38, a
¢ further battles against preserva-
tionists in the Slocan Valley;

° conflict with eco-terrorists who,
last fall, sabotaged logging equip-
ment in Alberta.

He said the union is also busy in
Saskatchewan with an ongoing
review process of Forest Manage-
ment Agreements in the province's
northeast, effecting the communi-
ties of Hudson Bay and Carrot River.

In Ontario, he said the union is

The future of our
members and the future
of our country’s economy

is critically tied to
harvesting timber.

fighting against the Harris govern-
ment’s relaxation of environmental
standards, which can only lead to
conflicts with green groups. There is
also concern over the Harris govern-
ment’s “Land for Life” review of
crown land holdings.

“Anything that the Harris govern-
ment undertakes has to be kept
under suspicion as we know the
Conservatives are no friend to unions
in that province,” he said.

On the federal scene, Pollock said
the union will continue to fight the
Liberal government’s planned
endangered species legislation which
has the potential of preserving vast
tracts of wilderness at the expense
of forest industry workers and their
communities.

Last year the union was success-
ful, in coalition with other groups,
in putting a halt to Bropgaed endan-
gered species legislation before the
federal election.

Pollock said the union will con-
tinue this year in coalition building
with user groups, communities and
First Nations groups to oppose unfair
endangered species legislation.

The union is also considering set-
ting up community forums across
Canada to mobilize a grass-roots
fight back campaign and has sent a
letter to local governments across
Canada mobilizing support for the
union’s position.

en aR SSSR

8/LUMBERWORKER/JUNE, 1998