Thank you, colleague.
The accelerated deposit mechanism was not part of our framework agreement on April 27; it was a later add-on. It was the result of the government recognizing the need for companies to quickly receive as much cash as they could. A lot of companies are facing serious problems with their creditors. Some of them are at risk of shutting down in a negative market. Cash is king, they need cash, and that mechanism is a very efficient way to get cash to them. It will be a godsend to an awful lot of companies that are facing the prospect of going into a negative market and need cash in order to invest and secure their future.
The anti-circumvention clause on the pine beetle was a very important part of the negotiation over the last couple of months, in combination with the proposed market pricing system in northern B.C. With the pine beetle trees, as you know, the longer they are on the stump the less valuable they become. If you do not have a market pricing mechanism that takes into account that wood quality is deteriorating, that exchange rates may be moving, and the whole constellation of factors that affect the value of timber in the eyes of the people who process it, then you are creating untold problems.
I believe that this anti-circumvention mechanism for the first time will allow Canada to have a market-based pricing system that will truly reflect market reality. If the timber is more valuable, stumpage will go up. If the timber is less valuable, under competitive market conditions stumpage will go down. That will be a very critical aspect for anybody who is trying to manage and deal with beetle-infected timber and all manner of other economic perturbations that can affect the value of timber.
In the old softwood lumber agreement you were basically required to keep stumpage up. The coalition has been constantly attempting to get what's called an “effects test” put into the anti-circumvention clause. It is a provision whereby you would always test a stumpage or policy change against the effect it would have on stumpage and timber prices. If the effect were to reduce it, you'd be punished and essentially in violation of the agreement. We don't have that; it's history. I've got to tell you, the market-based pricing system is going to be a critically important shock absorber for the industry.
I commend the Province of British Columbia. I was one of the few CEOs five years ago calling for market-based timber pricing in British Columbia. It's very reassuring to me that we now have that system in place. I think the industry and communities are going to be better for it.