Governments fail to grasp seriousness of crisis in Canada's forest products industry

    OTTAWA, April 20 /CNW Telbec/ - Today's announcement by the Quebec and
federal governments to convene a joint committee on forestry issues is cold
comfort for 250,000 employees and close to 300 forest-dependent communities
from coast to coast struggling to stay alive.
    Since the start of the recession economic conditions for the forest
industry have deteriorated at an even faster pace than was previously
anticipated, with new challenges cropping up almost daily.
    "Four weeks of bureaucrats talking to each other is not what we
anticipated. Implementing existing programs and measures contained in
January's Budget is important but it isn't an adequate response given the
severity of the crisis and developments of recent weeks," says Avrim Lazar,
President and CEO of the Forest Products Association of Canada (FPAC).
    "The Canadian forestry sector lost 50,000 jobs over the past two years.
More than 250 mills have closed or suspended operations over the same time
period. The forest industry in Canada can't wait around for more discussion
about what governments need to do. We know what needs to happen at the
national level. Let's get on with it before thousands more lose their jobs"
says Lazar.

    The urgent action needed:

    - Counter US black liquor subsidies: The U.S. government is providing
      billions of dollars of subsidies to the pulp industry for the renewable
      fuel that they produce and use in their mills ("black liquor"). If the
      federal government doesn't act to level the playing field within the
      next two months the damage done to the industry in terms of job losses
      will be irreversible.
    - Modernize provincial wood policies: Provinces own most of the wood used
      in Canadian mills and for too long has managed it with an eye to short
      term politics rather than long term economic growth. For example,
      Quebec has among the highest wood costs in the world and antiquated
      wood allocation policies that have stalled urgently needed investments.
      This must change.
    - Provide for a competitive national rail transportation system: The two
      national railways have monopoly power over many rural communities and
      provide poor service and inflated prices that make our mills less
      competitive. The federal government must intervene to end this abuse.
      Rural Canada and its industries are entitled to competitive rail
      service and rates.
    - Modernize tax credits for R&D and capital investment: Ottawa's main
      incentive for industry R&D is a tax credit that companies can't take
      advantage of during recessions when they're not profitable. These tax
      credits should be refundable. Accelerated tax credits for capital
      investment and the tax loss carry-back need to be extended to spur
      badly-needed investment.
    - Ensure Access to Credit: In today's economic climate, commercial credit
      markets remain sluggish putting sound companies with good business
      strategies at risk. The federal government must move more aggressively
      to implement the measures announced in the Budget to provide more
      credit to businesses.
    - Support for green transformation: The forest products industry is by
      far the largest generator of renewable energy in Canada today,
      producing enough energy to replace three nuclear power plants. Ottawa
      needs to create a national green energy policy that recognizes existing
      investments and spurs new investments in clean, green power in our

    Mr. Lazar underscores the need for action on addressing forest sector
woes that's national in scope. "What is done in one region will affect the
fate of all regions especially if the sustainability of the Softwood Lumber
Agreement is impacted. We don't need our national government exacerbating
regional tensions," he says.

    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
almost 2% of Canada's GDP, and 11% of Canada's manufacturing GDP. The industry
is one of Canada's largest employers, operating in almost 300 Canadian
communities and providing nearly 700,000 direct and indirect jobs across the

For further information:

For further information: Ottawa: Monica Bailey, Manager, External
Relations, Forest Products Association of Canada, (613) 563-1441 ext: 323,
Cell: (613) 878-4144,; Vancouver: Laura Ballance, Laura
Ballance Media Group, (604) 871-4451, (604) 726-8350 (cell),;
Montréal: Hind Ounis, MECA Communications, Account Executive, (514) 288-8500
ext: 234,

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