FPAC Calls Budget 2008 Inadequate

    OTTAWA, Feb. 26 /CNW Telbec/ - The Forest Products Association of Canada
believes the federal Government's Budget 2008 is an inadequate response to the
challenges facing the industry, said Avrim Lazar, FPAC's President and CEO.
    "The forest products industry is facing the worst economic conditions it 
has seen in many decades, and while Government cannot solve this problem it is
not doing its part," Lazar said. "Industry has been aggressively improving
productivity and efficiency while government seems to be unwilling to take
proportional action to improve hosting conditions and attract investment to
Canadian mills."
    FPAC has been calling for the government to take aggressive action to
improve the business climate. The extension of the accelerated capital cost
allowance announced in the budget is a step in that direction. However, by
only extending the accelerated CCA by one year, and then phasing it out, this
measure falls short. The forest products industry recommended a five year
extension, to reflect the time it takes to put in place new investments.
Moreover, the Government did not accept industry recommendations to improve
its R&D tax credit scheme to make sure companies, whether profitable or not,
can access the tax credits when times are bad.
    This is most disconcerting, Lazar added, given the unprecedented climb in
the Canadian dollar, which has gone up 60% since 2002; the collapse in the
U.S. housing market; and continuing weakening of U.S. economic fundamentals.
"The industry is acting aggressively to confront these challenges by
restructuring its operations, reducing costs and improving its productivity,"
Lazar said. "While the rest of the world moves at warp speed, the federal
government is taking baby steps."
    "The forest products industry has strong future growth potential," Lazar
added. "Global markets are growing and there will be increased competition for
land and resources. The question is how to make sure that the Canadian
industry is well positioned for the future. This requires aggressive action
    One bright spot in the budget was the $10-million allocated to the forest
products sector to market its goods abroad. The budget recognized that Canada
is a world leader in the manufacturing of high-quality, environmentally
sustainable forest products, which will be in high demand as the middle
classes in Asia grow and consumers insist on planet-friendly products.

    The forestry industry represents 3% of Canada's GDP, directly employs
over 300,000 Canadians and is the economic backbone of rural Canada. FPAC is
the voice of Canada's wood, pulp and paper producers nationally and
internationally in government, trade and environmental affairs. Canada's
forest industry is an $80-billion dollar a year industry that represents 3% of
Canada's GDP. The industry is one of Canada's largest employers, operating in
over 300 Canadian communities and providing nearly 900,000 direct and indirect
jobs across the country.

For further information:

For further information: Paul Vieira, Director of Communications, Forest
Products Association of Canada, (613) 563-1441 x: 323, (613) 884-3312 (cell),
pvieira@fpac.ca; Jeremy Dunn, Curve Communications, (604) 684-3170, (604)
726-8350 (cell), jeremy@curvecommunications.com; Laura Ballance, Curve
Communications, (604) 684-3170, (604) 771-5176 (cell),

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