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Wednesday, 26 December, 2001, 05:56 GMT
Canada timber felled by crisis
Timber is at the centre of a US-Canada trade dispute
By the BBC's Ian Gunn in British Columbia

Canada's lumber producers are hoping the new year brings relief from some of the hardest economic times the industry has ever seen.

The forest sector has long been one of Canada's economic mainstays - particularly in the western forests of British Columbia.

But the industry has been stumbling in recent months and along with it have fallen the fortunes of many small towns and tens of thousands of jobs.

The problems are many and the situation in Canada's woods may get worse before it gets better.

Trade dispute

There is an eerie silence along the gravel road in a forest north of Vancouver.

I don't know where we're going now

Charles Widman,
industry analyst
There should be huge articulated trucks rumbling along these roads, laden with thick fir and cedar logs. But today the only thing moving is a bird rummaging in a puddle.

It is like this across much of British Columbia these days.

Industry profits have withered, mills have closed, employment has fallen and whole communities have lost their economic base.

The most immediate problem is a long-running trade dispute between Canada and America.

The US is Canada's largest customer for wood.

But the United States has its own timber industry and producers there have long complained that Canada unfairly subsidises its lumber operations.

More bad news

The Canadians deny the charge, but earlier this year the US Government imposed duties and penalties of up to 30% on Canadian wood.

Canadian forest
The situation in Canada's woods may get worse
It has hit the companies in Canada very hard - some estimates blame the tariffs for 30,000 lost jobs.

Talks between senior government officials from both countries have limped along in recent weeks, but it could be weeks yet before an agreement is reached.

Charles Widman, a senior forest industry analyst in Vancouver, says the situation does not look very good.

"The offers that we've made to change our forest practices have been rejected. So I don't know where we're going now.

"I think it's going to be well into 2002 before we reach a resolution and we aren't hopeful of an early resolution to this problem."

Worse news is that the lumber dispute with America is just one - and perhaps the most easily solved - of the problems facing the forest industry here.

Tough decisions

A new government report paints a grim picture of outdated equipment, too many lumber mills, and a massive infestation of beetles that are eating their way through prime trees.

Charles Widman agrees with much of that assessment.

It could be as much as a decade before the forest industry rumbles to life again

"We're going through a very difficult time. The markets themselves have been low in North America for the past couple of years. Our overseas markets, like Japan, have evaporated.

"We also have this mountain pine beetle which is the worst infestation in the history of BC. So we're going into 2002 with a lot of challenges in our platter."

And meeting those challenges is going to require some very tough and unpopular decisions by both government and the industry.

Mill closures, job losses and bankruptcies are widely seen as inevitable.

But if the reforms are made, most observers say the resulting industry could be stronger than ever.

They warn, however, it could be as much as a decade before the forest industry rumbles to life again along the back roads of British Columbia.

See also:

20 Aug 01 | Sci/Tech
UN call to save key forests
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