Canada’s only getting 78% of the money owed to us by the USA after they charged billions of dollars in illegal import tariffs on Canadian softwood lumber going into the States. Now you might think that 78% is better than nothing, and in some ways it is. The problem is it’s a little like telling a thief that they only have to repay 78 cents of every dollar they took from you. In the future they’ll realize they can make 22% profit and have no punishment for it even. Plus we’re saddled with bad restrictions that hurt Ontario logging.
The good news is that an industry that was hurt will get billions of dollars back. And I think if the USA can renegotiate NAFTA unilaterally [without Canada and Mexico's consent] then so can we when it benefits us. And when a government with a spine returns to Ottawa, we’ll simply ask for the remaining 22% back, because a deal isn’t a deal any longer in North American “Free Trade”.
UPDATE: I write more on this here.
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CrazyPete | 28-Apr-06 at 10:45 am | Permalink
If they can invade another country without caring about world opinion, what is stopping them from keeping ALL our money indefinitely?
Yes this has a bad aftertaste, but its better than waiting another 5, 10, 15 years, sitting through more rulings, and ending up with nothing.
At least now its over.
Lance | 28-Apr-06 at 11:20 am | Permalink
Let’s keep this in perspective, shall we?
Firstly it wasn’t Canadian money. The duties were on lumber being sold to _American_ customers. This is like the RIAA saying they lost xx Billion to music sharing because their sales are down. At best the “5 Billion” is simply an estimate. That means you can file your 78% because the number is meaningless.
Secondly, softwood lumber exports to the US are at their all time high. So the “hurt” is non-existent.
The duties were put in place because the provinces do not charge market price on stumpage fees to the lumber companies. Saskatchewan alone is about $180 mbf (thousand board feet) lower than market price.
Quebec’s “formula” for computing stumpage fees is so wonked it occassionaly turns negative . . . meaning they would pay lumber companies to harvest the trees.
The maritimes sell their stumps at market price . . . surprise, no duties on their lumber.
In other words, the Provinces are leaving money on the table simply to create a false market. That “5 Billion” is money the Provinces _gave away_.
NAFTA doesn’t address _Provincial_ (or State) subsidies, so of course it came up in favour of Canada’s argument.
1) If I was a competitor in the US I’d be pissed too.
2) As a taxpayer in Canada and Saskatchewan, I am pissed that the Gov’t’s are giving away money that they should be charging the lumber companies.
Cheers,
lance
Saskboy | 28-Apr-06 at 5:42 pm | Permalink
CrazyPete: “If they can invade another country without caring about world opinion, what is stopping them from keeping ALL our money indefinitely?”
I see that side of it, and address it in my Update link.
Lance, you seem to understand the marketplace for lumber better than I do. I was under the impression that Canada wasn’t unfairly subsidizing lumber to tinker with the market, and our mills and loggers were just more efficient than US loggers, as was indicated by an expert from Vancouver on CKOM.com this morning with Gormley.
In any case, NAFTA appears dead, and I don’t think this is the end at all. Revelations late this afternoon that Canada’s soverignty is threatened in the latest agreement will bring deserving wrath down on Harper. Wow is he ever messing up big time lately in the media.
Lance | 29-Apr-06 at 9:22 am | Permalink
I don’t understand it any better. Just did some reading. The “efficiences” that analyst was talking about are comparing final costs . . . not methodological or process costs. So, if inputs are lower . . . it’s more “efficient”. Marketspeak at it’s finest. Also remember that analyst was hardly non-partisian.
The fact of the matter is that the Provinces are subsidizing the industry by not charging market rates for stumpage fees. All the yanks did was put a tarriff on lumber sold to Americans that equalized the pricing. The kept the money that the Provinces left on the table. NAFTA is about the country, not the Provinces, so it doesn’t really apply.
Another thing which I know I read somewhere but can’t find it now is that Softwood lumber was specifically exempted from the FTA. The reason being that this fight has been going off and on for about a hundred years or so.
I’ll see if I can find the exemption.
Cheers,
lance
Saskboy | 29-Apr-06 at 6:32 pm | Permalink
I don’t have a lot of sympathy for the USA if we subsidize our logging industry. They subsidize their grain industry unfairly through “military” enhancement to the Mississippi River transportation system that they can haul their produce along for much cheaper than trains even are.
Lance | 29-Apr-06 at 9:56 pm | Permalink
That’s a straw-man and you know it. The Army Corps of Engineers has been working the Mississippi flood plain for more than a hundred years and the Mississipi has _always_ been a main mode of transportation.
I haven’t found the exceptions I was looking for and I scanned the whole NAFTA agreement.
Cheers,
lance
Saskboy | 30-Apr-06 at 8:33 pm | Permalink
It’s a different topic of trade, but it’s still a subsidy that the USA gets away with BECAUSE it’s always been a main mode of transportation. They are just more fortunate to have a naturally constructed transporation system while we had to build ours.
Given the number of rulings by international bodies in Canada’s favour, I just am not convinced that we were wrong and the USA was entitled to charge duties to “level” the playing field.