Pulp and Paper Canada

‘We can’t do it in their place’ Audet says of aid package

March 28, 2006  By Pulp & Paper Canada

The $925 million pledged to Quebec’s faltering forestry industry won’t go far in terms of turning things around, th…

The $925 million pledged to Quebec’s faltering forestry industry won’t go far in terms of turning things around, the Quebec Forest Industry Council says, but the sum, promised to be distributed over the next four years, has added fuel to the softwood lumber dispute fire, and has vexed the Coalition for Fair Lumber Imports.

“We just think it’s another outrageous form of Canadian subsidy,” said Barry Cullen, executive director of the Washington, D.C. based organization. “It’s pretty hard to compete with an industry that seemingly is supported in all different directions by the Canadian governments up there,” he added. “We don’t get that kind of largesse from our government down here.”


The government has guaranteed $436 million for silviculture and cost reduction, $100 million of it in the form of tax credits for building forest access roads, and an additional $120 million as a 15% capital tax credit on investments over the next three years. A total of $44 million will be set aside for a support program for forest workers and $20 million for loans to small-and-medium-sized businesses.

A total of $425 million will be reserved for loans, including $350 million for loans to companies that have paid out countervailing and anti-dumping duties to the U.S., using the tariffs as a guarantee.

In defense of the package, finance minister Michel Audet said, “our forests are a remarkable source of wealth. But they are a resource in urgent need of renewal. Certain companies are threatened by the current context, and the government decided to respond with energetic measures.”

On the other side of the spectrum, Jacques Gauvin, deputy chief executive officer of the Quebec Forest Industry Council said the package falls short of what the sector needs.

“What we see is certainly an effort, we acknowledge that. But it’s certainly not the level of help we expected. The programs still require companies to invest the bulk of funds,” he said. “The problem is, we don’t have the money to do that. It would be a good program for a healthy industry, which is not our case right now.”

Audet’s response was clear. “The government will not take the place of the private sector in the implementation of the forestry strategy. Many enterprises are in difficulty because they have not modernized. It’s clear they don’t want to invest, and we can’t do it in their place.”

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