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© IWA's research assistant Phil Legg at Loggers’ Local Wage and Contract Conference.

Researcher sets stage for 91 negotiations

COURTENAY, B.C. — In a presenta- tion to the Wage and Contract Confer- ence of Loggers Local 1-71 here on January 19, IWA-CANADA’s Assistant Research Director Phillip Legg told delegates that the union can expect a tough set of contract negotiations in the B.C. forest industry this year.

Legg highlighted some of the antic- ipated industry arguments against wage and benefit increases in 1991. Slumping demand for B.C. wood prod- ucts in key markets like the United States will figure prominently in the industry’s approach to a new master agreement.

An overvalued dollar, according to Legg, and softening pulp and paper markets will also be seen as argu- ments given by industry negotiators.

On a more positive note the assis- tant researcher said that lumber mar- kets are always cyclical and the cur- rent condition is not permanent. In addition, according to Legg, economic fundamentals will see a return of the Canadian dollar to lower and more realistic levels against its U.S. counter- part.

“Companies in 1991, on the coast of BC. certainly, are not in the quagmire of debt that they were in the 1982 recession,” Legg told the delegates.

Legg said that compared to com- petitors in the U.S. Pacific Northwest and the U.S. South, B.C. producers have a relatively stable supply of high quality timber. Over the coming decade as timber harvests come under increasing pressure especially in the US., some long term opportunities should open up for producers in B.C.

But he also cautioned that log pro- duction in B.C. has fallen substan- tially from the record level reached in 1987. During that year the B.C. coastal harvest reached 33 million cubic meters.

Although Legg estimates that the 1990 coastal harvest has fallen to 25 million cubic meters, he felt that it was unlikely that coastal logging activity would retreat further to the 22 million cubic meter level recorded in 1982. Legg pointed out that the rebuilding of most coast mills over the last eight years and the favoura- ble shift of offshore currencies (e.g. the Japanese yen) will help prevent a repeat of the 1982 experience.

Legg noted that the immediate problem for B.C. producers was the softening U.S. lumber market which normally consumes about 75% of BC.’s annual lumber production. Legg pointed out that while new home con- struction activity was slumping in 1990, some positive developments

have been the recent decline in inter- est rates, the larger size of newly

constructed single family homes and the continued development of the repair and remodelling market.

According to Legg, one bright spot for B.C. lumber producers continues to be the Japanese lumber market. Although that market consumed only 12% of B.C.’s lumber production in 1989, it accounted for close to 25% of the value of B.C.’s lumber exports. One of the key concerns for B.C. pro- ducers in the Japanese market has been the decline in wood-based new home construction. However, Legg pointed out that because of the increasing size of wood-based homes, over half of the total housing floor space built in 1989 was in the wood- base category.

With many regions competing to supply the Japanese market, the pros- pects for B.C. producers is by no means secure. Legg noted, however, that the combination of timber sup- ply problems in some of the supplying regions such as South East Asia as well as reliability and timber quality problems in other areas should bode well for B.C. producers.

The European market for B.C. lum- ber has remained relatively constant over the last five years according to Legg. And for B.C. producers, the U.K. continues to be the largest part of that market accounting for close to 80% of the volume shipped to Europe. Legg noted that with an inflation rate 9-10% and interest rates in excess of 14%, the short term outlook in the U.K. was not positive.

Legg noted that the pace of current settlements appears to be relatively high in Canada. However, statistics on those settlements tend to over- state the real increases that have been achieved in recent major negotiations because the statistics do not ade- quately distinguish between “up- front” wage increases and “phased-in” wage increases. Although up-front increases may involve a lower per- centage increase, it often generates more income over a year than a phased-in increase.

In addition, the speaker pointed out that many of the wage increases recorded recently involve sectors where hourly wage rates are well below the level currently available in the IWA master agreement. Under these conditions the percent and/or absolute increases negotiated look impressive because the existing rates are so low. As well, many of the recent contact settlements involved lengthy strikes.

And finally, Legg noted that the statistics do not include any assess- ment of the value of benefit items such as paid time off, pensions, health and welfare, etc.

“We are dealing with a federal gov- ernment which refuses to pay atten- tion to the problems that are destroy- ing the forest industry,” said IWA- CANADA first vice-president Gerry Stoney. E

Brother Stoney, speaking to the Wage and Contract Conference of Log- gers’ Local 1-71 in Courtenay on Janu- ary 19, had returned in frustration, along with IWA president Jack Munro from a session of the high profile federal Forest Sector Advisory Coun- cil which met 5 days earlier in Ottawa.

During that meeting in Ottawa, which included high profile represen- tatives from industry, government, and labour, two federal cabinet minis- ters (Federal Forest Minister Frank Oberle and Federal Industry Minister Benoit Bouchard) heard critisism from the IWA of the failure of the federal government to take immediate measures to counteract the recession.

The role of the committee is to find out what the problems are faced by the industry and convey them to the federal government.

Stoney said the politicians were told to abandon their high interest rates policy which has “brought the industry to its knees.”

When talking with Bouchard, Jack Munro called for Bank of Canada president John Crow’s resignation and the lowering of the Canadian dollar to 78.5¢ in comparison to the American dollar.

For over three hours, amidst House of Commons uproar over Canada’s role during the Persian Gulf Crisis, the council met to hear the grievances of major employer representatives from such forest companies as Nor- anda, Canfor, Repap, Domtar, Weyer- hauser, and others.

Although Stoney reported that the cabinet ministers were receptive, he doubts their ability to persuade the Mulroney cabinet to take action in a positive direction.

“We've got an intransigent Federal government which refuses to accept the fact that we are an important part of the Canadian economy,” said Brother Stoney.

The forest industry is Canada’s

Government's inaction — slammed by Union V-P

number one employer creating over + 1,000,000 direct and indirect jobs and provides the country with over $40 billion in exports, netting the econ- omy over $20 billion.

“We have also talked to Michael Wilson to tell John Crow to lower interest rates,” Stoney told the dele- gates. “We believe that the only rational for high interest rates is to keep up the Canadian dollar up into the 87 cent range.”

Stoney said that such action has made the forest sector uncompetitive with the U.S. and there is an apparent possibility that the high dollar/ interest rates policy is tied to a back room agreement between Canadian and U.S. negotiators during Free Trade Talks prior to the 1988 Federal Election.

Canadian interest rates are 5 per- » centage points higher than their us. counterparts. Through the 1982 reces- sion, our rates were only one percent- age point higher.

Stoney decried the government's complete lack of interest in helpin; unemployed woodworkers. He sai that, since early 1990, over 10,000 IWA members in Western Canada have been affected by the recession and criticized the government for doing nothing.

“When auto plants in Ontario or Quebec go down, all hell breaks loose but when woodworkers lose their jobs the government looks the other way,” said Stoney.

The speaker said the Intentional Trade Minister John Crosbie is unwill- ing to wage a real fight to remove the Memorandum of Understanding which, in 1986, placed a 15% export tax on softwoods going to the U.S.

Stoney said that since the Tory government is at an all time low for political parties (11% support in the polls) that it “has made a decision as a government that it is going under and it might as well spend as much of its term putting through as much of its right wing agenda as possible.”

“The only problem is that the next government will be spending their time trying to unravel what the Mulroney government has done.”

© Gerry Stoney, [WA-CANADA's National first vice-president said governments refuse

to help woodworkers through recession.

2/LUMBERWORKER/FEBRUARY, 1991