—— | 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