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THE COAST’S MOST SERIOUS PROBLEMS DON’T INCLUDE LABOUR COSTS
July 21, 2007
Almost every British Columbian knows that our BC coastal forest industry's biggest problem is lack of investment.
That was already the case in 2001when Dr. Peter Pearse warned that companies were not putting enough back into their operations to even meet depreciation. It was the case in 2003 when CEOs promised a billion dollars in new investments in exchange for a new collective agreement and changes to forest policy. Moreover, it's the case today, with firms exporting record numbers of raw logs, closing profitable sawmills and taking their capital to the US.
That's why it's curious that Surinder Ghog (Past made the present for forest industry, July 18, Vancouver Sun) and others suddenly want us to believe labour costs are the industry's biggest problem. Could that be because United Steelworkers are currently trying to negotiate a new collective agreement? Could it be that companies are desperately trying to hold onto the unfair work rules they couldn't negotiate in 2003, but were handed in mediator-arbitrator Don Munroe's 2004 legislatively imposed collective agreement?
The evidence says that exactly what's happening. In his report on the 2004 settlement, Munroe listed seven major problems - none of them labour costs: the collapse of the Japanese market; the Canada-US softwood lumber agreement; regulatory costs; stumpage costs; increased logging costs; the transition from old growth to second growth timber and the rising Canadian dollar.
Commenting on the union's economic submission to him Munroe noted that the union "is correct that the government and companies have an important role to play, independently of the content of the collective agreement, in restoring the viability and the competitive fortunes of the BC coastal forest industry." The industry's problems, he added, "must not be solved entirely off the backs of the workers...."
The problem is that industry and government have not done what Munroe hoped they would do. In the past four years companies have made virtually no investment in new sawmills, research and development or marketing initiatives. Nor has the government insisted that they do; in fact, the Gordon Campbell Liberals have watched as the industry has broken into pieces that simply don't work in the interests of British Columbians. As Ghog admits, Stephen Harper's softwood lumber deal with George Bush made things worse, not better, while the Canadian dollar is much higher now than it was in 2004, and still rising.
These are the real problems in our coast forest industry. Today companies like Timberwest are exporting logs from BC, profitable sawmills like Western Forest Products New Westminster mill are closing, while firms are investing profits earned in BC to buy US mills, including Island Timberlands' recent purchase of Longview fibre in Washington State. Meanwhile, British Columbians are not seeing sufficient benefits from our forest resources.
This leaves workers facing long, unilaterally imposed shifts during which they must struggle to do their already-dangerous jobs with increasingly antiquated machinery and equipment. It has led to companies' reliance on contracting out to under-capitalized, hard-pressed small operators -- forced to cut corners and take risks just to keep their contracts. It contributed to the 43 woodworker fatalities in 2005, and it contributed to the over 40 major wood-processing plant closures in BC since 2001.
Workers are already doing their part, not just in the forest industry, but throughout increasingly under-capitalized workplaces. A recent study by Canada's Certified General Accountants found Canadian capital investment was so low over the past decade that longer working hours actually contributed more to productivity than did new investments. Increases in workers' average hours made up 43 percent of GDP growth between 2000 and 2004; growth due to capital investment only 21 percent.
Still workers have made some impressive gains. Stats Can recently noted some impressive productivity gains in the wood-products sector where productivity rose 5.8 percent per year between 2001 and 2005, five times the average for the whole manufacturing sector.
Ghog is correct when he says that firms are running just to stay still as the dollar rises and the Harper-Bush deal hits home. But companies shouldn't be looking to their workers to make up the difference; they, too, are already running hard just to stay still.
