Pulp and Paper Canada

A Win-Win Situation

February 1, 2011  By Pulp & Paper Canada

A Win-Win Situation

A Win-Win Situation

t was amusing to see the spin put by various governments on the softwood lumber decision that came down in mid-January.


Effectively, two opposing groups claimed victory following the decision of the international arbitrator of the Canada/U.S. Softwood Lumber Agreement. The U.S. claimed victory because, well, it won the case; Ontario claimed victory because the fine wasn’t nearly as hefty as the U.S. had requested.

The text of Ontario’s official press release reads:

“Ontario is pleased with an international tribunal’s decision to limit an additional export tax on Ontario softwood lumber to only one-tenth of a per cent (0.1%). This is dramatically lower than the 20% the U.S. had originally requested. The tribunal rejected many of the United States’ claims and found that Ontario’s forestry programs had no significant adverse impact on U.S. producers.”

Way to put a positive spin on a negative situation. Even at the reduced tax rate that has Ontario so pleased, Quebec and Ontario lumber exporters, or the government, must come up with $60 million in compensation for breaching the agreement.

This follows the arbitrator’s conclusion last year that Canada must pay $68 million for another breach of the SLA by Ontario and Quebec exporters.

The next SLA case to go to the arbitrator, launched only days before this current decision, concerns B.C. mills paying “salvage” rates for beetle-killed wood.

Let’s move from fines to windfalls, specifically the Pulp and Paper Green Transformation Program. This program is a “win” on many fronts. The $1-billion program is clearly stimulating the industry and the economy (see story and a list of projects on page 8). The federal government’s infusion of cash is allowing many mills to expand their capacity to generate electrical power from either biomass or black liquor.

Some will use the energy efficiency gains or additional power produced for their own purposes within the mill, but others are entering contracts to sell power to their provincial utility. Alberta Pacific, Cariboo Pulp, DMI, Howe Sound, Weyerhaeuser, and Zellstoff Celgar fall into the latter category.

The other benefit of the government’s funding of energy and environmental projects is that it gives mills an easy answer when suppliers question their efforts to improve sustainability. Kruger Products’ Frank Van Biesen explains the pressure from retailers in this month’s story about the life cycle assessment of his biomass gasification project in B.C.

All of these Green Transformation projects have the additional benefit of being a green marketing tool. Win-win.

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