The coastal forest industry wants an emergency meeting with Premier Ujjal Dosanjh, warning that renewed market problems in Japan are pushing the industry back into a slump.

"The current situation is grave and I don't believe that the markets are going to save us this time," Craig Neeser, chairman of the Coast Forest & Lumber Association, said Thursday.

Neeser said the industry, which employs 18,000 and generates $2.2 billion a year in direct revenues to government, needs changes immediately to reduce costs and bring greater investment certainty.

Policy changes are essential before the industry can attract investment to tackle the problems of market access, he said.

"We have been able to make some gains ourselves and do some things smarter with our operations. We dealt with the issues we control but we continue to look to areas that are more under government control ," said Neeser, who is also vice-president of Weyerhaeuser Co.'s B.C. coastal group.

However, Forests Minister Jim Doyle said before the industry gets the premier's ear, it should meet with him.

Doyle said the government recognizes the plight of the coastal industry, particularly the collapse in Japan but he is also concerned the industry could use its problems to push for lower environmental standards.

"Whatever initiatives we make, we will not be looking at lowering the standards."

He also said if the industry needs help, the B.C. industry as a whole should not be calling for an increase in the annual timber harvest a year to 100 million cubic metres a year from the current 70 million.

"That may not be helpful," he said.

He would not commit to making any policy changes but said he is "more than happy" to talk about the issues.

"I have been speaking to ministry officials to see what we can do to assist coastal companies," he said.

The industry and government have been consulting for several years over policy changes to the stumpage system and to rules governing Crown timber tenures. The industry is seeking a market-based stumpage system rather than the current system, in which Victoria sets revenue targets. It also wants greater control over its tenures to encourage long-term investment in the industry.

However, government has been reluctant to change the stumpage system for fear of a backlash from the Americans, who view the B.C. industry as subsidized. A brief upturn in markets in 1999 -- which benefited the Interior industry rather than the coast -- masked the problems facing the coastal industry, taking the heat off the need for immediate change, CFLA president Brian Zak said.

He said the government has viewed the industry as one economic structure. Despite the rosy over-all economic picture for the industry as a whole for the last 18 months, the coastal sector, which relies on Crown timber, has been foundering. It lost $600 million in 1998, barely broke even in 1999 and is heading downhill again this year.

Zak said 22 mills, representing 80 per cent of the volume on the coast, have already taken down-time this year or are planning on taking it this month.

Mills are not closing permanently, he said, but the closures are resulting in interrupted employment and lower government revenues.

The industry is under-cutting its coastal harvest by about 20 per cent.

The Japanese market, which went into a nosedive in late 1997, made a modest recovery in 1999 but headed down again this year after the Japanese government introduced new building standards requiring homes to have a 10-year warranty.

Under the new standards, green hemlock structural lumber, is rated lower than laminated beams from competitors such as Sweden.

Neeser said the new code has resulted in a "marketplace meltdown" for the coastal industry. Demand is down 20 per cent, as are prices.

Neeser said the coastal industry has all the ingredients needed to make the technological changes and is pursuing them but it's up to government to provide support through policy changes.

He also said industry CEOs are committed to making needed changes as never before.

"We can't follow what we have done in the past. This is a genuine opportunity to get ahead and reposition the coastal industry." Error: Unable to read footer file.