International Trade Committee on May 31st, 2006

[David Milton]

Thank you, Mr. Chairman.

To the first part of the question, in Ontario we enjoy an astoundingly good relationship with the senior bureaucracy and the politicians in their understanding of the point of view of the industry.

On the question about short timelines, because we as the industry don't have direct access, in the hurry-up we rely on the Government of Ontario, through their officials, to put in our remarks with their own. We're satisfied they have done that. Whether it's been resonant is another question.

As to the pricing levels, I have heard these discussions as well, and as I believe Mr. Cameron was saying, depending on which part of where you are, you can do it 21 different ways. With the price levels as they are this week, I think Ontario would probably be in the range of a 10% export tax with the 30% level of quota. That may change at the end of the week or the start of next week. That's the general rumour as of a couple of days ago.

As for being seven to nine years under a deal--if it's a great deal, that's fine, as Mr. Weaver says. There is certainty and predictability, and we can make some plans. If it's a botched deal, what happens with the aspirations in Ontario under something that may be deemed to be anti-circumvention in dealing with extraordinary prices to industrial consumers of energy? Simply enjoying that globally as a policy of the Government of Ontario for the industrial complex, the centre of Canada, the sawmill industry and the forest products industry got hit sidelong on that one. Is that anti-circumvention?

Concerning unspoken threats, support, and litigation, we're with you all the way. As for loan guarantees, we would probably have to revisit that one. It's a huge and fundamental issue. It has always been the position of the Ontario industry that our victory is the one at the end, with a court of competent jurisdiction saying that we are not injuring, there is no threat of injury, and there is no subsidy. We would have preferred, obviously, a quick and successful victory, not the four and a half years that have drawn out.

Thank you, Mr. Chairman.

[The Vice-Chair, Bloc, Pierre Paquette]

Mr. Chevrette.

[Guy Chevrette]

The gentleman wanted me to speak. First, I would say that relations with our government are good. The same is true with senior officials, and we'll even be meeting again tomorrow morning. They know our viewpoint, they know our analysis of the U.S. document, they also know the type of amendments we are proposing to replace the points that we find utterly unacceptable, and, unless proven otherwise, our government is representing us very adequately on this issue. We would like it to continue doing so, and we think it will do so, and we especially think that the Canadian government will accept the Quebec government's amendments, which will make the agreement very acceptable for all parties. Then we'll all celebrate together.

[The Vice-Chair, Bloc, Pierre Paquette]

Mr. Allan.

[John Allan]

Thank you.

On the first question, on government and their relationship with us, it's very positive. We're joined at the hip with the B.C. government. We're working actively with them every day. The concerns we have raised about the speed of turnaround times, documents, and the process have been echoed by the B.C. government to the federal government, including written correspondence.

As for the rates we are looking at in the term sheet and the subsequent agreement, I must admit that we were fully involved in negotiating those rates. We knew what we were going to get into. We knew the tax rates, we knew the quota amounts, we had done a lot of research on it, and we went into that aspect of the deal with our eyes wide open.

As for a botched agreement, my view continues to be that we should work on making this agreement into the agreement that we need from a business and commercial and certainty basis, as Mr. Weaver discussed. I don't think a botched agreement is acceptable to anybody in this room, frankly. I think everybody's focus right now is to see what we can do to get this agreement to where it should be in terms of providing certainty as we go forward.

As for federal assistance, we received upwards of $20 million towards our legal costs last year from the government, a commitment started by the Liberal government and finished by the Conservative government. We're very grateful for it, but my group has spent $100 million in legal fees and other costs involved with this file since day one. If we end up in litigation again, or if litigation carries on, I believe my group will continue to fight the litigation as aggressively as possible, with or without government assistance.

Thank you.

[The Vice-Chair, Bloc, Pierre Paquette]

Would someone else like to speak on this subject? Mr. Cameron.

[Russ Cameron]

This particular lobbyist was asked to take a year off from his job as vice-president of Lindal Cedar Homes because the membership of the ILRA realized that somebody had to look at this thing full time. So I took a pay cut and did that. Unfortunately for me, that was five and a half years ago.

In any case, our communication with the B.C. government, as I said earlier in response to the other questions, hasn't been that great, because of the timelines. We'd really like it to slow down. I think they're trying. They're giving us the documents and allowing us time to comment; sometimes we might have three or four hours.

As for the duty levels, yes, right now we're at 10%, and it's 15% if you go over quota. The price index was supposed to be published today--the mid-week thing--but it wasn't, because of the U.S. holiday, so I guess it comes out tomorrow. The trend has been heading down.

Our preference, as I think I indicated earlier, would have been what we thought was going to happen--that is, the government was going to provide an aid package to see us through. Our guys have been beaten up worse than anybody on this ad valorem thing, and yet they are still willing to see it through if they can get a little bit of help and get this legal thing taken care of.

We certainly would like to have seen what Mr. Feldman described occur, and we're very concerned about letting the United States establish the ability to use transaction pricing in their future anti-dumping cases, because we think that the other $2.1 billion could vanish pretty quickly. If we can get at the NAFTA decision and take out that appeal at the WTO--I'm sure Mr. Feldman knows far more about it than I do--that would have been our preference, for sure, and still is.

[The Vice-Chair, Bloc, Pierre Paquette]

Mr. Julian, you have one minute left. Would you like to use it?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Yes. I have a very simple question to the four individuals. What constitutes a botched deal? What constitutes a deal that we should not sign?

[David Milton]

In Ontario's case, there has to be a practical exit through policy reform.

[John Allan]

In B.C.'s case, what we need is an anti-circumvention clause that recognizes our timber pricing systems on the coast and in the interior, and specific language in the annexes that have running rules for both option A and option B that make commercial sense. That's what we need. A botched deal would have failure on both of those.

[Russ Cameron]

From B.C.'s non-tenured guys, a botched deal would be something that didn't have exit ramps within a period of time, so that you could survive the interim measures, and that didn't recognize the legal precedents that we've established in victories, and those kinds of things.

[Guy Chevrette]

A botched agreement absolutely would not have been amended with respect to the substantive points we have raised. It's as clear as that. When you do something knowing that the results will be negative, I say it's botched. When you believe in the changes, you fight for those changes.

[The Vice-Chair, Bloc, Pierre Paquette]

I want to thank you. The exercise has nevertheless been quite difficult because there were a lot of us, but it was also very enriching.

On Monday, we'll be hearing from Minister David Emerson.

The meeting is adjourned.