The head of one of Canada's leading softwood exporters is doubtful that an increase in stumpage fees would do much to solve the softwood lumber dispute with the United States.
"The politics of softwood lumber is driving the decisions, not the mechanics or the legalities," Canfor Corp. CEO Jim Shepherd said.
"As we've seen the rhetoric rise, as we've seen this whole problem elevated to the highest levels of both countries, both prime minister and president, it illustrates just how far and how deep softwood lumber has gone to impact the relationship between our two countries," Shepherd said.
The lumber executive said there is an expectation by industry that government will look to increase stumpage rates - which lumber companies pay for cutting rights - as part of a plan to solve the dispute, but Shepherd is skeptical.
"It's not clear to me just what or any influence timber pricing changes in the Interior of B.C. will have on the trade file," he said.
"At one point it was thought to be of relevance, but as events have unfolded, I don't think it's of interest to the United States, and certainly the U.S. industry, what we do.
"What we have to do in terms of stumpage is look after our own competitiveness and the true value of that wood in relation to the business that we're in."
Meanwhile, Trade Minister Jim Peterson said Ottawa will fight Washington's recent bid for more time to consider a NAFTA ruling that orders it to drastically cut some duties on Canadian lumber exports.
The duties, imposed after U.S. producers complained of unfair competition, have so far cost Canadian exporters billions.
It's the fifth time the Americans have been ordered to cut the tariffs and Prime Minister Paul Martin has been talking increasingly tough on the issue recently.
Peterson said that in addition to the legal action and more advocacy efforts, the government could retaliate with measures on other exports, such as energy, as early as the middle of next year.
But Shepherd said he believes a negotiated settlement is the way to go.
"There has to be some elements where everybody walks away with something, nobody is going to get everything," he said.
Canfor (TSX:CFP) is the largest producer of softwood lumber and one of the largest producers of pulp in Canada. The company also produces wood products at 29 mills in B.C., Alberta, Quebec and Washington state.
