the spectre of a vicious canada-
U.S. trade brawl over softwood lumber is casting a shadow over Quebec's Summit of the Americas free-trade love-in next week. Once again, the world's largest trading partners are huffing and snorting over Canada's $11-billion wood exports to the U.S. American timber interests accuse Canada of flooding the U.S. with dirt-cheap, heavily subsidized wood and in the process wiping out U.S. mills that can't compete. They have petitioned the U.S. commerce department for duties as high as 76 per cent, or $8 billion a year.
Canadian lumber execs and politicians of all stripes are banging their fists in protest, retorting that our prices are lower simply because we've got endless expanses of forest. They have threatened to drag other issues like split-run magazines into the dispute, and charge the Americans are reneging on free trade.
Former Ontario premier Bob Rae has jumped into the fight as general counsel of the Free Trade Lumber Council, a group siding with Quebec-based lumber firms that are beating the pro-free trade drums loudest. "It is not an option for us to retreat into protectionism," he wrote in an opinion piece last month, accusing the Americans of "resorting to some very shopworn and tired arguments."
(Rae, who was once arrested for protesting against logging in Temagami, could not be reached for comment.)
But while getting to the bottom of whose stumpage fees are lower and whose subsidies are higher is a complex journey through competing facts and figures, the verbal war has at least opened a discussion ecologists and timber experts say is long overdue. They suspect that what the Yanks are saying may actually be true: our wood gets hidden subsidies in the form of poorly enforced and weak environmental rules and ultra-low stumpage fees (a kind of tax that logging companies pay to cut on public land).
Our forests are so heavily over-logged, they say, that Canada's forest-products industry, which generated $44 billion in export revenues in 1999, could one day soon run out of quality trees and collapse like the Atlantic fishery. The trade war, they argue, is a blessing in disguise, sparking a debate about forestry before it's too late.
"As things are going now, there is over-exploitation of the forests," says Luc Bouthillier, a forestry economist at Laval University in Quebec City. "We are overestimating regrowth. Will the forests disappear? No. But we run the risk of having moments when the forests won't support the industry."
Bouthillier says government and industry officials don't have reliable data on how much logging is sustainable. That's because until recently no one bothered to study the question.
"The statistics don't exist. If there is a similarity with the history of the Maritimes fishery, it is that we don't have good information on the resource and the impact of our actions."
In a scathing internal report in 1998, Quebec natural resources officials admitted as much, saying they didn't know if forestry was being done sustainably. "The department is unable to state with any degree of certainty whether or not the sustainable yield is respected,' said the report.
But it's not just the lack of monitoring that is disturbing environmentalists. They also point out that Canadian logging benefits from eco-regulations that are weaker than those in the U.S. -- such things as rules for forested buffer zones and the protection of wildlife. (Canada doesn't have an Endangered-Species Act, for example.)
Henri Jacob, president of the 100,000-member Quebec Coalition of Ecological Groups, says the weak regulations in Quebec are a good example of the "disguised subsidies" that make Canadian wood so cheap in the U.S. "It's an ecological, social and human disaster. The fact is, in Canada we don't pay the real costs of forestry."
It's a point dramatically made by the Sierra Legal Defence Fund in a report charging the British Columbia government with letting the logging giants off the hook for millions of dollars in stumpage fees.
The document points out that the BC government no longer evaluates logs leaving the companies to rate their quality. The process is called "grade-setting" and means companies routinely undervalue their logs and the amount of stumpage fees they must pay. The Fund estimates that between 1993 and 1998, the companies underpaid by as much as $6 billion.
"In BC we almost couldn't be doing a worse job," says Mitch Anderson, a Fund staff scientist and co-author of the report. "In most areas, easily accessed, valuable trees are gone, and the industry is becoming more marginal."
But many in the industry dispute this dismal scenario and don't believe Canadian lumbering is bloated on hidden subsidies. "It's a misconception" that Canadian environmental rules are looser, says Karl Neubert of the Free Trade Lumber Council. Stumpage fees, he wants to make clear, are "comparable to U.S. ones."
Eric Kristianson, spokesperson for BC minister of forests Gordon Wilson, doesn't believe the Sierra Legal Defence Fund's charge that the public is subsidizing logging enterprises. While he acknowledges that the province collects less in stumpage fees than its target rate -- "We don't know why this is," he offers -- he says the Fund's report suffers "from some serious methodological flaws." And he believes the U.S. and Canuck logging systems are so fundamentally different that "making a comparison is very difficult."
But low stumpage fees aren't the only hidden subsidy flagged by critics of the trade. Chief Arthur Manuel of the BC Interior Alliance, which represents five First Nations whose claims cover a quarter of the province, identifies another: the fact that so much wood comes from First Nations land never ceded in any treaty -- wood cut down without compensation.
"These trade subsidies are outrageous," he says. "They're illegal and unfair and the antithesis of free trade."