BY BILL PHILLIPS
Todd Doherty was at ground-zero in the softwood lumber dispute Tuesday.
He toured the Brink Forest Products finger-joint operation on River Road and met with owner John Brink for about an hour.
While much of the focus in the softwood lumber dispute has been on major forest companies and how they get access to Crown timber, smaller, secondary wood manufacturers, like Brink Forest Products, have also been swept up in the dispute and are facing a tariff, retroactive to February 1, of 19.88 per cent.
“There’s never been one as punitive as this one, and it’s our fault,” said Brink, who is now on his fifth round of softwood lumber negotiations, the first one being back in 1982.
He has been calling on the federal government to push for an exemption for secondary lumber manufacturers or, failing that, a First Mill policy.
The First Mill policy, which was in place in the last deal, taxed the value of wood going into the mill rather than the value going out. For example, if the value was $100 and the finished product was worth $500, they would be taxed $15 on the $100 input rather than $75 on the $500 output. Without the exemption, the duties could cost hundreds, if not thousands, of jobs in the secondary manufacturing sector.
Doherty said the federal Liberal government is out of touch with the forest industry, pointing out it wasn’t even mentioned in the Speech from the Throne after the Liberals were elected in 2015.
“The challenge we have is that it has been bounced around from minister to minister, it’s almost like a hot potato,” he said.
Doherty said Prime Minister Justin Trudeau’s “charm offensive” in dealing with the U.S. administration “hasn’t done us any favours.”
Both Brink and Doherty suggest that some of the companies helping the federal government negotiate shouldn’t be there. Companies like Canfor and West Fraser have purchased mills in the U.S. and are now helping Canada negotiate the softwood deal.
“We think that’s great, we celebrate companies (globalizing),” said Doherty. “Where we fault is this government allowing them at the table because the question is ‘who are they negotiating for.’ It’s interesting the five largest producers, none of them were hit with retroactivity.”
It’s the smaller and intermediate sized companies that are going to feel the brunt of the tariffs.
Brink, grateful that he’s had conversations with Doherty, said the provincial government was asleep at the switch as well.
“The B.C. government should have taken a lead position in understanding the industry,” said Brink. “But they’ve been so pre-occupied with LNG and other other things, that they have no clue about it.”
Doherty said the provincial government has at least had the issue on its radar.
“Our provincial government has shown a little more leadership than, perhaps our federal government,” said Doherty.
The issue comes to market share. When the last deal expired in 2015, Canada’s share of the U.S. market was about 28 per cent. During the year-long cooling off period, that market share has climbed to about 34 per cent, prompting the U.S. to impose tariffs and possible anti-dumping levies.
Doherty said the deal the Americans had put on the table would have reduced Canada’s market share to 24 per cent and added the U.S. wants to see Canada’s market share go as low as 20 per cent.
“That’s a no-go,” he said.