The BC Liberals continue to argue that the NDP government should reduce stumpage rates to help the ailing forest industry.
“We’ve got trouble in the natural resources sector,” Andrew Wilkinson, BC Liberal leader said in Prince George last week. “The biggest issues are in forestry where we’ve had close to 100 closures and curtailments in 2019, thousands of people out of work … The obvious thing that needs to be addressed is stumpage, which is controlled by the province of British Columbia.”
The Liberals have been advocating a stumpage rate reduction since mill closures started plaguing the province last spring.
“Stumpage has been reduced and it will be reduced again,” said Premier John Horgan, also in Prince George last week. “The Liberals created the system, it’s ironic that they don’t understand how it works. They’re the ones who broke off appurtenancy that used to connect logs to communities. They’re the ones who put in place the existing stumpage structure.”
Horgan agreed the existing stumpage system is not responsive to rapid market changes and that is a “legitimate” concern for the industry.
“When prices were high last year and the year before, I heard no qualms about stumpage rates,” he said. “We need to be more responsive . We inherited a system and we’re working with it but we have to be mindful that every move we make on the forestry file draws attention from litigators in the United States who spend their entire days trying to find ways to pull billions of dollars out of our economy. We need to be cautious on this. I’m surprised, quite frankly, that the Liberals are oblivious of those challenges.”
Wilkinson, however, dismisses the possibility of retaliatory action from the U.S. should B.C. reduce rates or change its stumpage system.
“Alberta has a month-to-month adjustment of the stumpage system which seems to satisfy the U.S. Department of Commerce,” Wilkinson said. “Suddenly the government of British Columbia says we have to be scared of the big, bad U.S.A. It doesn’t make any sense.”
He said the provincial government needs to pressure the federal government to make the softwood lumber issue a priority. When asked why the Liberals didn’t change the stumpage system to a month-to-month adjustment during the 16 years they were in power, Wilkinson pointed to two softwood lumber disputes during that time.
“We solved softwood lumber disputes twice,” he said. “John Horgan went to Washington D.C. to pick up a cheque from a union boss and said he was going to come back with a lumber deal, but came back with a big, fat nothing.”
Wilkinson also continued his criticism of the government’s response to the forest industry crisis.
“If you start at Cache Creek and go north, so many of our communities look for forestry as their primary employer,” said Wilkinson. “The provincial government is the landlord. They’re the ones responsible for the well-being of our public and our population and the well-being of our industry.”
Horgan said government has been helping and pointed to the $69 million aid package rolled out last year.
“We are aiding the forest industry,” said Horgan. “We have to always be mindful when government intervenes in the marketplace, particularly with respect to the forest industry, that we don’t run afoul of the softwood lumber agreement with the United States.”
Close to 55 per cent of B.C. wood products head to the United States. Horgan says the provincial government has been working to find new markets in China, Japan, and Korea.
“We need to move to more value-added,” he said. “We have to utilize all of the fibre in the forest basket, rather than just the best parts. If we’re high-grading the forests to catch the market, that may be good in the short term, but we need a long-term view.”