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Layton's Right: Scrap Wood Deal

The ones howling now should have spoken up then.

Bob Matters 9 Oct 2008TheTyee.ca

Bob Matters is the chair of the United Steelworkers Wood Council based in Burnaby, B.C.

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Harper and Emerson: What were they thinking?

One thing people often do when they're embarrassed or defensive is make a lot of noise to create a diversion. That's a likely explanation for the sound and fury issuing from forest company boardrooms and the B.C. cabinet room after NDP leader Jack Layton's pledge to scrap the Canada-U.S. lumber deal.

Because methinks they doth protest too much.

Everyone knows it was an awful deal, after all. It raised the penalty for exporting lumber to the U.S. from a combined rate of 10.8 per cent to 15 per cent; it also hit Canada with the so-called "surge mechanism," designed to discourage investment in Canadian sawmills. Then it added insult to injury by handing half a billion dollars of our money to the U.S. Coalition on Fair Lumber Imports -- the ultra-protectionists who launched the lumber fight -- and another half billion to George Bush for use as a political slush fund.

The deal increased raw log exports by saddling lumber exporters with a border tax but allowing raw logs to enter the U.S. duty-free. It encouraged investment in the U.S. rather than in Canada since our sawmills pay the 15 per cent tax while U.S. mills pay nothing. And both Ottawa and B.C. handed Canadian companies cash with no strings attached, most of which they immediately invested in the U.S. No wonder that in the now-melting-down North American building products market, Canadian producers are even more severely hammered than their U.S. competitors.

On top of all this, Canada was inches from winning the dispute before World Trade Organization tribunals, NAFTA panels and U.S. courts. Days after the deal was signed in 2006 the U.S. Court of International Trade ruled the U.S. tariffs and duties illegal, ordering the U.S. government to give back all of Canada's money. But since Stephen Harper had already caved in and signed a sweetheart deal with George Bush, that decision was moot. We threw away a sure win in the courts for sure defeat under the Harper-Bush deal.

A pack of howlers

So yeah, no wonder they're howling. I'd howl too if I were a forest company CEO and wanted people not to remember how I was cowed by former trade minister David Emerson -- sometime Liberal, sometime Conservative, sometime CEO of Canadian Forest Products, now former MP for Vancouver Kingsway because his constituents loathe him.

I'd howl, too, if I were B.C. Premier Gordon Campbell: opposed it one day, supported it the next after Harper threatened to withhold federal funding for the 2010 Olympics. The howling of the righteous sounds suspiciously like the howling of the damned, doesn't it?

But the person who should be most embarrassed is Stephen Harper. For reasons known only to himself (and perhaps George Bush), an inexperienced and star-struck Harper chose a lousy negotiated deal over a sure judicial win. The question isn't whether Jack Layton is right to condemn a lousy trade deal; it's "what was Stephen Harper thinking?"

No, the folks who are howling today are the ones who sold out Canada. They're the ones who should now answer to voters, both Conservatives who negotiated the deal and continue to support in spite of its obvious failure and Liberals who supported it in the Commons and the Senate despite Stephane Dion's lip-service. The only one who's clean on it is Jack Layton -- no wonder the rest of them are howling.

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