For more information contact:Unifor Member Mobilization and

Political Action Departmentpoliticalaction@unifor.org

(416) 497-41101-800-268-5763

unifor.org/softwood

TABLE OF CONTENTS

Softwood Is a Municipal Issue . . . . . . . . . . . . . . . . . . . .1

Take Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Municipal Softwood Resolution . . . . . . . . . . . . . . . . . . .3

A Fair Deal for Canada’s Forestry Workers . . . . . . . .4

What We Need Government to Do . . . . . . . . . . . . . . .6

Sign the Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Forestry Benefits Us All . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Softwood Lumber is a Municipal Issue

The United States’ decision to impose duties on Canada’ssoftwood lumber exports is an attack on fair trade.

Canada’s forestry industry is vital to our economy with half amillion workers directly and indirectly dependent upon it fortheir livelihood.

Canadian communities are at risk, and government assistanceat all levels is urgently needed to protect the best interests ofworking people across the country.

Softwood: Communities • 650 communities across Canada are dependent on the forestry industry.

• In more than 300 of those communities, forestry provides at least 50 percent of household incomes and in many communities that number risesto above 80 per cent.

• Forestry is a leading employer of Aboriginal workers, with 9,500 forestryjobs in Aboriginal communities.

Softwood: Jobs • The forestry industry directly employs 202,000 workers, across every

region of Canada.

• Each forestry job creates 1.5 spin-off jobs.

• Half a million jobs are connected to the forestry industry nationwide.

Softwood: Economy • Forestry is Canada’s third-largest export sector.

• The industry generates $60 billion worth of production per year, withmore than half exported.

• Forest products account for 10 per cent of all Canadian exports andrepresent 25 per cent of Canada’s total trade surplus.

• Forestry workers generate more than $4 billion in taxes to supportpublic programs.

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Take Action:

Unifor is asking municipalities across Canada to join together totake action on fair trade for the softwood lumber industry and the

communities and workers that depend upon it.

City and Town Councils are asked to publicly show their support by passingthe Municipal Softwood Lumber Resolution on the following page. Anelectronic version can be accessed at unifor.org/softwoodresolution

Municipal Softwood Lumber ResolutionWhereas Canada’s forestry industry is vital to our economy; hundreds ofthousands of workers and more than 650 communities depend on goodforestry jobs, including in softwood lumber; and

Whereas although Canada’s softwood lumber is a key resource for the U.S.economy and housing industry, the imposition of U.S. duties on Canada’sexports deals a serious blow to in-forest harvesting and domestic wood, pulpand paper production, along with the jobs associated with it; if past disputesare any indication, tens of thousands of our jobs are at risk; and

Whereas previous dispute resolution panels have rejected U.S. claims ofunfair trade practices on Canadian softwood lumber, consistently ruling inCanada’s favour; this suggests that any imposition of countervailing or anti-dumping duties by the U.S. Department of Commerce is discriminatory andgroundless; and

Whereas all national stakeholders, including municipalities, must speak outin defence of Canada’s forestry industry – the nation’s third largest exportsector – as well as forest-dependent communities and affected workers inthe face of another damaging trade dispute.

Therefore be it resolved that ______________________________ Councilurges the federal government to negotiate a new softwood lumber agreementwith the United States that guarantees access to the U.S. market for Canada’ssoftwood lumber exports and that retains the right of Quebec and allCanadian provinces to manage forest lands.

Be it further resolved that ______________________________ Council callson the Minister of Natural Resources to act immediately in mitigating theimpact of U.S.-imposed softwood lumber duties by providing emergency loanguarantees to assist affected facilities, and to ensure adequate supports areprovided to affected communities and workers, including enhanced incomeand transition supports as well as special Employment Insurance provisions,extended benefit periods and retraining supports for advanced technologiesin the forestry industry.

Finally, be it resolved that ______________________________ Council call onthe Federation of Canadian Municipalities to re-establish its SoftwoodLumber Taskforce responsible for coordinating a response among municipalcouncils in Canada and a comprehensive campaign strategy, bringingattention to this issue among our U.S. municipal counterparts.

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A Fair Deal for Canada’s Forestry Workers

Canadian exports of softwood lumber are critical to the North Americaneconomy. Softwood lumber is a key resource used in housing

construction, as well as a range of other products. Canada is rich in timberresources, and U.S. demand for our products is high. Eighty per cent ofCanada’s total wood product exports are destined for the U.S. Yet, softwoodlumber exports have been at the centre of controversial bilateral tradedisputes between our two countries since the early 1980s. Why?

An important element of the dispute centres on two distinct approaches tomanaging forest resources. In Canada, most productive forested land ispublicly owned. The rate charged to companies licensed to harvest the timber(or “stumpage fee”) is mainly set by governments and based on a range offactors intended to support forestry management practices. In the U.S., mostforested land is privately owned, with stumpage fees set by competitiveauction. U.S. lumber firms have long claimed Canada’s model yields lowerstumpage fees and constitutes an unfair subsidy to producers thatundervalues the market price for softwood lumber – a largely unfoundedallegation, despite numerous U.S. industry-led legal challenges, includingthrough international trade tribunals.

Since 1982, cross-border disputes in softwood lumber trade have resulted inthe imposition of damaging trade penalties on Canadian exporters, resultingin major layoffs and mill closures. In an effort to mitigate the damage andbargain a fair compromise, Canadian and U.S. governments successfullynegotiated a series of temporary, managed trade agreements for softwoodlumber, including pacts struck in 1996 and in 2006 (the latter of whichexpired in October 2015). In both instances, these trade treaties helped quietU.S. industry opposition, and provided temporary reprieve from tradepenalties (or “countervailing” and “anti-dumping” duties) for Canadianexporters selling in the U.S. market.

The situation todayPrior to the expiration of the last softwood lumber agreement, there werepositive signs that a new arrangement could be struck between the Canadianand U.S. governments. A joint statement issued by Prime Minister Trudeauand President Obama in June 2016 outlined a set of “common goals” for a

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revised trade pact. Ultimately, no agreement was reached. And, as expected,the U.S. lumber industry lobby has moved quickly to initiate proceedingsthrough the U.S. Department of Commerce (and involving the U.S.International Trade Commission) to impose countervailing duty and anti-dumping penalties on Canadian lumber exporters.

The costs of another dispute are significantCanada’s forestry sector is highly integrated, operating in three broad inter-connected segments: in-forest activity, wood products, and pulp and paper. Asudden disruption to lumber production would result in a dramatic decline inthe ability of sawmills to send by-product to the pulp and paper sector, anddramatically curtail all logging and in-forest activities. The negative rippleeffects would be far-reaching and especially devastating for hundreds offorestry communities throughout the country.

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What we need government to do:1. Negotiate a good deal.

Unifor calls on the federal government to negotiate a new, bilateralagreement governing cross-border trade in softwood lumber with the UnitedStates. Such an agreement must ensure all Canadian provinces retain theright to manage forest lands, it must be consistent with international traderules and it must balance two-way trade against the best interests ofworkers and local communities in Canada.

2. Conduct thorough consultations with stakeholders. Unifor believes that all trade negotiations must be both transparent andinclusive. All stakeholders, including Aboriginal communities and unions,must be consulted both to define the desired parameters for a new softwoodlumber accord that reflects pan-Canadian interests and throughout thenegotiating process.

3. Mitigate the impact of U.S. imposed duties, through federal loan guarantees.In the event that countervailing or anti-dumping duties are imposed by theU.S. on Canada’s softwood lumber exports, the federal government must actimmediately to assist those facilities, communities and workers that aredisadvantaged. Assistance should be provided through a federal loanguarantee backstop, intended to counteract the financial impact of dutiesimposed on exporters.

4. Focus federal assistance on workers and communities. Workers and local forest-dependent communities are the stakeholders mostvulnerable to a prolonged softwood lumber trade dispute. Governmentsmust prioritize their needs by directing funds to targeted industrialdevelopment plans within forest-dependent communities and to enhancedincome and just transition supports for affected workers. This shouldinclude special Employment Insurance assistance provisions, such asextended benefit periods and retraining supports for advanced technologiesin the forestry industry.

5. Ensure any repayment of duties is invested back into local economies.Upon ratification of the 2006 Softwood Lumber Agreement, more than $4 billion in duties collected by the U.S. government were repatriated toCanada – not all of which was re-invested back into Canadian operations.Government must commit that any future repayment of duties must funnelback into affected communities, earmarked for local economic development.

Sign the petition calling on the federal government to protectforestry jobs at unifor.org/softwood

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Forestry strengthens our economy• Canada’s forestry sector produces lumber, paper, advanced building

materials, and increasingly new products such as energy, fuel,pharmaceuticals, chemicals and advanced cellulose fibres.

• With a positive forest products trade balance of $24 billion, the world’slargest, no nation gets more benefit from forestry trade than Canada.

• As a leading innovator, forestry is also one of the nation’s top sources ofprivate investment with $5.3 billion in spending on new equipment andrepair in 2015. An additional $240 million was spent on research anddevelopment activities, employing more than 1,000 scientists andresearch personnel.

• The industry’s direct payroll injects $11.7 billion per year into the widereconomy.

An essential source of good jobs• Forestry is a champion job-creator among Canada’s most valuable export

industries. Forestry creates 60 per cent more direct jobs than auto;double the jobs of the oil and gas sector; three times more than mining;three-and-a-half times more than primary metals; and four times morethan aerospace.

• These are good community- and family-sustaining jobs with averageweekly wages of $1,112 last year, 17 per cent above the national average.

• The industry in the midst of a generational change and expects to fill60,000 jobs by the end of the decade; which, if uninterrupted, willprovide essential opportunities for young workers and young families.

A softwood lumber dispute will hurt workers and consumers• Countervailing duties amount to an aggressive and unfair penalty on

Canada’s forest industry. If left in place, these duties could put tens ofthousands of good jobs at risk.

• Canada’s softwood lumber industry fully complies with currentinternational trade laws – a fact that some in the U.S. refuse to accept.

Forestry Benefits Us All…why Canada needs fair trade in softwood lumber

Fair Trade Future

• President Trump campaigned on apromise of balancing internationaltrade, in the spirit of creating andsecuring jobs for U.S. workers.However, the decision to imposetariffs on Canada’s softwood lumberexports has less to do with helpingAmerican workers and more to dowith padding the pockets of privateforest landowners.

• American lumber lobbyists haveundermined our domestic industry bywrongly claiming that the way wemanage our forest lands constitutesan illegal subsidy to our industry.

• U.S. lumber producers have beenmaking these same claims for morethan 30 years, despite the fact thatthey have been repeatedly provenfalse by international trade tribunals.

• Currently, the U.S. can only supplytwo-thirds of its own softwood lumber needs, which means there’ll still bea need to import softwood lumber at a higher cost to consumers.

A softwood lumber dispute will hurt the industry• Canada’s forestry sector is highly integrated, operating in three broad

inter-connected segments: in-forest activity, wood products, and pulp andpaper. Many firms operate across all three segments, and the broaderforestry sector depends on the successful operation of each segment tosustain the others.

• A sudden disruption to lumber production would result in a dramaticdecline in the ability of sawmills to send by-product to the pulp and papersector, and dramatically curtail all logging and in-forest activities. All threesegments operate together, and a disruption to lumber production wouldhave immediate and far-reaching ripple effects.

• Canada exports $6 billion worth of softwood per year to the UnitedStates. As the destination of 70 per cent of our softwood exports, a

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Forestry in Canada• 202,000 direct jobs

• 300,000 spin-off jobs

• $60 billion production

• $35 billion exports

• 3rd largest export sector

• $5 billion annual investment

• $240 million in R&D

• $11.7 billion direct payroll

• $4 billion taxes from workers

• 17% higher wages thanaverage

• 650 reliant communities

• 44% cut in CO2 since 2000

Sources: NRCAN, FPAC, StatisticsCanada, Unifor calculations

sudden and major price increase will result in severely reduced Canadianproduction, leading to mill closures. Past experience demonstrates howquickly the impact will be felt. In the early 2000s, for example, the U.S.imposed a combined duty of 27 per cent and within months 15,000workers were laid off.

A green and renewable resource• Canada has the third-largest forest area in the world, which plays a major

role in combating climate change by storing carbon dioxide and reducinggreenhouse gases, and is key to a green future. Our forests remove onequarter of our fossil fuel emissions, and the industry has cut its owncarbon emissions by 44 per cent since 2000.

• Less than half of one percent (0.3 per cent) of Canada’s forests areharvested annually. The industry operates to the highest environmentalstandards in the world, and we have the world’s most third-partyindependently certified forests.

• Further environmental benefits are ahead as innovative new technologiesallow expanded use of wood in commercial, mid- and high-rise buildings,replacing carbon-intensive concrete and steel.

Forestry is one of Canada’s most successful and importantindustries. If properly safeguarded from damaging unfair tradesanctions, our forestry sector is poised for a bright future, whichwill benefit us all.Sources:Natural Resources Canada, “The State of Forest Canada’s Forests: Annual Report 2016;” ForestProducts Association of Canada, selected reports, http://www.fpac.ca; Canadian Council of ForestMinisters, “Criteria and Indicators for Sustainable Forest Management in Canada”; Industry Canada,“Trade Data Online;” Statistics Canada, selected CANSIM tables; Unifor calculations.Prepared by Unifor Research Department | May 2017

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