Lumber towns in British Columbia and Alberta are seeking answers from forest companies on future investments now that Canada plans to sign the softwood lumber deal with the U.S.

The controversial seven-year renewable deal reportedly calls for companies to be repaid $4.3 billion, or four-fifths, worth of countervailing duties seized by the U.S. industry during the decade-old softwood lumber dispute.

Community leaders in both provinces hope the agreement, which must still be ratified by Parliament, will help revitalize the industry after nearly 20 years of struggle. The sector has been beset by mill closures, downsizing and layoffs linked to increased globalization, mergers and acquisitions, the rising Canadian dollar and other pressures.

"(The deal) is not going to kill us, but it is going to have an impact," says Patrick Marshall, general manager of Rivercorp, a business-run economic development corporation based in Campbell River, B.C.

B.C. companies are expected to receive about 55 per cent of the returned duties, while Alberta operators are slated to receive about 10 per cent.

Canadian firms could use the returned duties to invest in new mills or avoid closing old ones.

"The real work is just beginning now," says Parker Hogan, a spokesman for the Edmonton-based Alberta Forest Products Association (AFPA), which represents producers throughout the province.

He says Alberta producers won't decide how to spend the returned duties until they have sorted out import quotas and other details in the deal that is "by no means perfect.”

He adds possible additional harvesting of wood affected by the mountain pine beetle epidemic will have to be factored into the discussions.

Since Alberta's annual allowable cut is near its allocation of about 23 million cubic feet, producers are likely to use the returned duties to shore up assets and make existing operations more efficient, says Hogan.

Although the province is known more for oil and gas, 40 to 50 Alberta communities are heavily dependent on forestry. They include the northern Alberta locales of Whitecourt, Hinton, Edson, Grande Prairie, Peace River, Slave Lake and High Prairie and even the Calgary bedroom community of Cochrane. Hogan says investments related to the returned duties could take two to five years.

But that's not what B.C. community leaders want to hear. "We have $143 million in investment waiting - representing approximately 500 new jobs and approximately 142,000 square feet of building space," says Campbell River's Marshall.

Although the potential new projects are not directly tied to the softwood lumber deal, it will influence companies' decisions, he adds.

Prime Minister Stephen Harper has accepted the pact, even though an undisclosed number of companies have registered their opposition. The agreement, due to take effect Oct. 1, is contingent on producers ceasing lawsuits related to the countervailing duties and includes a cap on Canada's share of the U.S. lumber market at about a third. A sliding tax would be kick in when when the North American price for softwood lumber falls below $355 US per thousand board feet.

With some of his members at odds with each other, BC Lumber Trade Council president John Allan has declined to discuss the deal.

However, the AFPA's Hogan says the AFPA would have preferred a negotiated long-term agreement to settle the 20-year-old dispute, which would have ensured both Alberta's forest industry and its forests are sustainable.

"At the end of the day, it was an agreement made between the government of Canada and 300 lumber companies," says Hogan. "It has been very much a government-direction-to-companies type of discussion. Our association and the Alberta Softwood Lumber Trade Council were pretty much left on the sidelines."

The U.S. Coalition for Fair Lumber Imports has issued a statement praising Canada for agreeing to the deal. The group has claimed Canadian lumber exports are illegally subsidized, despite opposing rulings from various courts and international trade panels.

Leo Zelinski, president of the Whitecourt Chamber of Commerce in northern Alberta, says it's time to implement the long-awaited deal, considering the difficulties of negotiating with the U.S. "elephant."

"Any time we can get cash and put it in circulation, it's a good thing," Zelinski says. "(NAFTA) is quite clear. I don't know how we ever got into this situation. If the politicians feel it's the best deal they can get, then let's get on with it and get it paid out."

In B.C., many people around the Campbell River, Port Alberni and Powell River areas along the Sunshine Coast are waiting to see how Catalyst Paper Corp. will respond to the deal.

Vancouver-based Catalyst operates five paper mills employing 3,800 people on Vancouver Island and the mainland's south coast. Although the firm does not operate any sawmills, it purchases wood fibre from coastal and Interior mills.

"We can't comment (on possible investments) until we see the consequences (of the deal)," says Graham Kissack, Catalyst's sustainability director.

He does add, however, that an agreement would help to secure its fibre supply. "From our perspective, what we want (from the softwood agreement) is a stable and sustainable solid-wood industry," he says.

Dewayne Parfitt, president of the Port Alberni Chamber of Commerce on Vancouver Island, says he'd like to think certainty in the softwood lumber agreement means more certainty in Canada's trade relationship with the U.S.

"If we have certainty in the relationship, it allows us to trade more freely," says Parfitt.

Port Alberni Mayor Ken McRae says the lengthy softwood dispute has prompted the local Western Forest Products-owned cedar mill to open and close on a week-by-week basis. He wants Western to build a new supermill in Port Alberni to prevent B.C. logs from being processed in the U.S.

While they wait for forest firms to make decisions, B.C. communities are trying to diversify their economies by enticing industries ranging from tourism to aerospace. McRae says new industries that set up shop in Port Alberni will not have to pay property taxes for 10 years.

"We can afford to do that because we have lots of new land that's not being used," says McRae.

Dave Formosa, president of the Powell River Chamber of Commerce, says his organization wants producers to use the returned duties to invest in new technologies and "firm up their balance sheets."

The Sunshine Coast logging town has felt the effects of the softwood dispute, even though it no longer has any large sawmills. "It has definitely affected jobs in the logging sector, trucking sector and (log) booming sector," says Formosa, adding he knows of families who suffered because of layoffs.

Harper says next month's House of Commons vote will be a confidence issue - which means his minority government could fall if a majority of MPs reject the deal.

- with files from CP

(Monte Stewart can be reached at monte@businessedge.ca)