The House of Commons Standing Committee on International Trade met yesterday — a rare summer sitting — to hear evidence on the softwood lumber deal agreed to between Canada and the U.S. on July 1. While the two countries have agreed on the final wording of the deal, it is not yet ready to be ratified. The deal requires Canadian industry to get behind the deal in the following ways:
- Any and all Canadian companies that are suing U.S. entities over illegally collected softwood lumber duties must drop their lawsuits. There are about 30 such lawsuits and the plaintiffs include companies like Tembec, West Fraser, Abitibi, Buchanan Lumber Sales Inc., Terminal Forest Products Ltd., Teal-Jones Group, Tolko Industries Ltd., Galloway Lumber Ltd., Leggett & Platt Canada, Domtar Inc., A.J. Forest Products Ltd., Aspen Planers Ltd., and Gorman Bros Lumber Ltd. If any one of those companies does not withdraw the suit, the deal is dead. (See the whole list in Annex 10b of the deal)
- Companies who collectively have a claim to 95 per cent of the refund of illegally collected duties must agree that Ottawa will be in charge of the refund redistribution program. Various news organizations have reported that so far, companies who collectively claim less than 50 per cent of this refund have agreed to let Ottawa run the program.
And so, with deal in some peril because the Canadian industry is not yet ready to satisfy those two conditions, Industry Minister David Emerson spoke to the committee yesterday to warn that while the deal his government signed wasn’t perfect, it was a lot better than the alternative. “I'm here to tell you another litigation cycle would be coming our way [if the deal falls through] and it would be ugly. There would be job losses. There would be company failures. Communities would be in very, very difficult situations,” Emerson said.
After he spoke, several industry groups said bollocks to that, arguing that signing the deal would actually lead to plant closures and layoffs.
“Not a single company, not one foresty interest in Canada shares this government's enthusiasm for the deal or believes that it is good,” said Jamie Lim of the Ontario Forest Industries Association. (The Ontario Forest Industries Association, by the way, is one of those organizations that must agree to drop a lawsuit against the U.S.)
Bill Reedy, the CEO of Gorman Brothers, a family-owned firm with a mill in Westbank, British Columbia, says the softwood deal would throw away years of Canadian court victories on the issue. “To be blunt, we feel like Alice in Wonderland — all logic and reason appears to have been abandoned. This agreement is an abomination.” Gorman Borthers is also one of those companies that must agree to drop the lawsuit. Reedy — like all CEOs whose companies have filed suits — have what effectively amounts to a veto on the deal.
This was meeting No. 16 of the committee and I expect to see the Blues (the early rough transcripts of the proceedings) tomorrow or the next day. In the meantime, here’s some excerpts from Meeting No. 15 of this committee, held on July 13. The committee spent most of this committee arguing about how to deal with softwood lumber agreement. At this meeting, the committee talked about who, in addition to Emerson, should testify at yesterday’s meeting and they also talked about who should testify at another meeting this group will have in a couple of weeks.
The Conservatives on the Committee want to make sure that witnesses who support the deal speak to the committee.
Mr. Ted Menzies (Conservative): Thank you, Mr. Chair.
We have some suggested witnesses, and we think this will certainly bring a balance, as I've maintained throughout this whole process. We've heard from those who are supportive and those who are critical of it.
So in the spirit of cooperation that this party is so renowned for, I would like to start our wish list with Frank McKenna, because he was involved in the first negotiation. He may be busy doing other things–maybe he's running a leadership race or something, I don't know. I'm just not sure where he is–
In fact, as we heard from committee member Helena Guergis yesterday, Mr. McKenna declined the invitation. The Conservatives had some others they wanted to hear from in support of the deal.
Mr. Menzies: Gordon Ritchie is another one who has been deeply involved in the softwood industry throughout the years. We'd like to suggest him.
…. Some individual from Canfor–and the same with all of these companies. Certainly we'd like the kingpin, if that's possible, but we realize it's summertime and some of us like to take holidays. We'd like to have Weyerhaeuser, the Canadian Lumber Remanufacturers Alliance, the Maritime Lumber Bureau, J.D. Irving, Ltd., Abitibi, the Québec Forest Industry Council-– … Then there is Buchanan, Norman Spector, Rich Coleman, and Pierre-Marc Johnson.
To which NDP MP and committee member Peter Julian says:
Mr. Peter Julian (NDP): Well, with that list we've pretty well run out of folks who support this agreement in this country. So let's hear from the associations across the country that are opposing this. They include the Québec Forest Industry Council, as Mr. Menzies mentioned; the B.C. Lumber Trade Council; the Ontario Lumber Manufacturers Association; the Independent Lumber Remanufacturers Association; Baker Hostetler's Eliot Feldman, who's one of the legal experts on this whole issue; the Free Trade Lumber Council; the Ontario Forest Industry Association; the Alberta Softwood Lumber Trade Council, which opposed this agreement; the National Association of Home Builders; United Steelworkers of Canada; International Forest Products; and I would also suggest Stephen Atkinson, who did the
report yesterday that showed that 20% of the industry would be decimated as a result of this document. That's a start.But I must say, Mr. Chair, I think you'll find in the next few weeks that you'll be getting letters from communities as well, because certainly this is an issue that has concerned many people in British Columbia. I would not be surprised if you find that you're getting letters from individuals and municipalities stating they're concerned and they want their opportunity to express their concerns about this 80-page document, which is radically different from the two-page document that was presented to us on April 27.
Yesterday, the committee heard from many of those groups.