Thursday, August 25, 2005

Softwood Lumber

The headlines haven’t changed. The United States still refuses to abide by the NAFTA ruling that states tariffs on Canadian softwood are illegal. Emotive liberals will tell you that we should respond with a trade war forgetting that we have annual trade surplus of 100 billion dollars with the states, and that a trade war would not only erase that surplus but would destroy our economy.

NAFTA may have ruled against the States but that’s only because the States couldn’t sufficiently prove their case (picture Law and order here). Make no bones about it though Canada does subsidize its Softwood industry, but the United States failed to prove the effect of these subsidies on their domestic industry. It is disingenuous to claim that they are arbitrarily hurting Canada for their own gain. Canada subsidizes the softwood industry by charging artificially low, regulated “harvesting fees”. In free countries harvest fees are determined on the open market and consequently are much higher. The regulated fees are thus a direct subsidy to the Canadian industry.
Which makes me wonder…

1) Why does our Canadian government subsidize the highly successful softwood industry? Should the highly paid timber industry need subsidizing by taxpayers?

Now to all the liberals and socialists out there, right now decreeing from the rooftops that “Canada’s a sovereign country, and allowed to run its timber industry however it sees fit“, well now I have one question for you...

2) Doesn’t subsidizing the forest industry only promote excessive destruction of our forests? Isn’t this a conflict for all of the socialists/environmental activist out there? Shouldn’t we be charging market value for our resources in order to prevent excessive destruction?

3) And one more for all the Americans out there; What’s wrong with cheap lumber. In effect Canada is also subsidizing the American construction market by saturating their market with cheap subsidized building supplies. Do cheaper houses sound like a bad thing? Americans shouldn’t care if we subsidize our lumber. It only benefits them. Hell I'd like it if they responded by subsidizing their automotive industry. Cheap American cars being sold in Canada would teach us a lesson.

In closing, the Americans should abide by the ruling until something can be negotiated, but Canada should agree to reform it subsidizing practices, something which only helps Canada, Canadians, and the industry itself.
-Angry Roughneck


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