© 2001 Canadian Press
December 13, 2001

VANCOUVER (CP) - B.C. Premier Gordon Campbell warned Thursday his Liberal government's forestry reforms will bring significant changes and a difficult transition for the province.

The government's proposed policy reforms are aimed at making the forest industry more competitive and, crucially, placating the United States to assure long-term access to the main B.C. export market.

The reforms include changes to stumpage on Crown timber, a decoupling of logging activity from mills in a particular area, relaxation of cutting requirements as a condition of retaining timber licences and a streamlining of the Forest Practices Code that governs logging.

It's hoped the changes will create a stable environment that would encourage investment and "give people that work in the industry the confidence they need to know that they're going to have long-term and secure jobs," Campbell told the Coalition of B.C. Business.

"I want to say this about softwood though too," he added. "There are going to be significant changes and we're all going to have to work together to make sure that we get through the difficult transition phase because we do have to have open, long-term and secure access to those markets."

U.S. lumber producers contend Canadian exports, which take one- third of the American market, are subsidized by low stumpage - the fees provinces charges for Crown timber.

The U.S. Commerce Department has levied countervailing and anti-dumping duties totalling more than 30 per cent since last summer.

Negotiations are underway to resolve the trade dispute, mainly by revamping provincial policies in return for withdrawal of the duties and a promise of free trade in lumber.

A leaked U.S. Commerce Department memo promises Canadian producers unfettered access to the American market and an end to the duties if the U.S. government is satisfied with Canadian reforms.

Campbell said later he had seen news reports of the Commerce memo but was not aware of its contents.

His main reason for optimism, Campbell said, is the effort of U.S. lumber envoy Marc Racicot. He said the former Montana governor has worked to understand the reforms British Columbia and other provinces are proposing.

Campbell told the business group that when he met with Racicot "he said firmly and would say unequivocally that this issue from the perspective of the United States is not about volume."

"It is about having open markets that are transparent and understandable globally."

Like any significant change to an entrenched system, the government's forestry reforms will create some difficulties, Campbell told reporters.

"I don't think we should pretend that these are small initiatives," he said. "When you separate the manufacturing part of forestry from the harvesting part of forestry, that's not small. That's a significant change."

Campbell suggested the reforms - aimed at taking costs out of an industry that's struggling, especially on the coast - won't result in a permanently downsized forest sector.

"I think in the short term there's going to be some disruptions," he said.

"But I think in the long term what we'll do is we'll create a forest industry that will encourage private-sector investment, that will have long-term security . . . and that actually we can watch an increase in the number of jobs over the long term."

Severing ties between mills and adjacent timber licences will maximize productivity, Campbell said. But he stressed the change won't lead to increased exports of raw logs.

"We're not in favour of log exports," he said. "We think that when we get the proper regime here in British Columbia it won't be necessary to have the log exports because we'll be able to create the kind of economic opportunities here that we need." Error: Unable to read footer file.