FPAC calls on First Ministers to Invest in Future of the Forestry Industry

    OTTAWA, Jan. 10 /CNW Telbec/ - Following today's announcement by the
Prime Minister, the head of the Forest Products Association of Canada (FPAC)
called on the First Ministers to use their meeting Friday to develop a plan to
invest in the future of the forest products industry, and the over
300,000 jobs and 300 communities that it supports. While FPAC welcomed the
government's assistance to workers and communities who have been harmed by the
high dollar, it noted that a vibrant and competitive industry is the best path
to economic prosperity for workers and communities.
    "We have presented the government with a vision and strategy for a strong
and competitive Canadian forest products industry. That strategy requires both
industry and government action," said Avrim Lazar, FPAC's President and Chief
Executive. "Although the industry is facing serious challenges and is
undergoing a significant restructuring, it is important to remember that
forestry continues to represent 3% of Canada's GDP, directly employ over
300,000 Canadians and be the economic backbone of rural Canada."
    Over the past 18 months, the sector has struggled in the face of myriad
challenges, among them: the 60% appreciation in the Canadian dollar relative
to the U.S. currency; persistent weakness in the U.S. housing market, which
appears to be pushing the United States - the sector's largest customer -
closer to recession; structural changes in key product markets, such as
newsprint; and growing competition from emerging markets that do not impose
the same regulatory requirements as Canada does. These factors forced forest
product companies to shut down operations at over 50 mills and shed
6,500 workers in the first nine months of 2007.
    Despite the current difficulties facing the industry, the longer term
outlook is one of opportunity. Forecasts have projected that global demand for
forest products is expected to grow at 3% annually as demand continues to
increase in economies such as those of India and China. Canada, with its vast
natural resources, must be ready to take advantage of new demand while
continuing to thrive in the North American market.
    "Clearly, there is enormous opportunity available to the industry and the
Canadian economy more broadly," Lazar said. "But the industry needs a business
policy climate that will allow it to seize this opportunity. In this context,
we certainly hope that the Prime Minister and the Premiers will emerge from
their meeting on Friday with concrete measures to support the industry over
the immediate period ahead."
    Public policy initiatives that could help the industry emerge from this
economic restructuring include: an extended accelerated capital cost allowance
for investment in machinery and equipment, from two years as outlined in the
last budget to five years; making tax credits linked to R&D refundable for
companies, regardless if they are posting a profit; harmonization of the GST
and provincial sales taxes, which would reduce taxes on business inputs; and
investments in market leadership and development, and transformative R&D.

    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: 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),
laura@curvecommunications.com; Paul Vieira, Director of Communications, Forest
Products Association of Canada, (613) 563-1441 x: 323, (613) 884-3312 (cell),

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