Sunday, January 13, 2008

The Tangible Results Of The Anschluss


Well, you'd think people like me, people who have made a fuss about the softwood lumber capitulation for a resource-based nation, would be eating crow today.

After all, on the surface at least, Mr. David Emerson, my MP from Canforcouver Kingsway, appears to have come through:

OTTAWA - The federal government is distributing nearly $470 million to six lumber-producing provinces in the first payout of revenues from charges on exports of softwood lumber products destined for the United States.

The announcement was made Friday by Minister of National Revenue Gordon O'Connor and International Trade Minister David Emerson.

And out here in Lotusland the story seems, at least at first blush, to be even better:

BC will get $371 million from the $467 million collected in the first year of the deal

Of course, Mr. Emerson, ever the self-promoter, is crowing:

International Trade Minister David Emerson said the payment demonstrates that the agreement is "delivering tangible benefits."

Now that's all the surface stuff, released on a Friday for maximum headline effect, hoping that the few true diggers still left in the pro-media would just let it slide.

Unfortunately, for the Anschluss makers at least, business writers are often not as easily bamboozled as political ones.

Case in point is a very good article in yesterday's Vancouver Sun by Gordon Hamilton that digs deep below the surface:

B.C. Forests Minister Rich Coleman said the tax transfer is already being folded into other government revenue streams, but it is not a windfall. The $372 million does not cover a decrease in stumpage revenues caused by low timber values, he said.

Now this is important because if the Anschluss' blood money is not even covering stumpage revenues lost, which are based on sales, how, exactly, are Mr. Emerson's results 'tangible'?

Well, you could, if you were in the Anschluss business, argue that the stumpage was lost because of the subprime mortgage-induced timber price collapse and the high Canadian dollar.

Which, of course, is part of the story.

But, you should also realize why BC got the lion's share of the money.

Essentially, along with all that beetle wood, it is because producers in Lotusland are paying an extra 15% tax on every board foot of lumber sold.

As a result, David Gray, a Lotuslandian lumber producer (ie. an owner, not a worker) told the VSun's Mr. Hamilton the following:

"The industry has been flatlined. The softwood deal prevents any resuscitation of the industry and our workers are being offered some consolation cookies," Gray said in an interview.

"The combination of today's market, the exchange rate and the softwood deal has placed the industry at its worst point in living memory. There is no dressing that up.

Now that's tangible.

As in, a tangible kick to the head of the industry when it's down.


The thing that really gets me about the softwood deal, and in fact so many of the privatization/ corporate welfare deals of the neandercons, is that the vast majority of them were built for good times which can have dire consequences for huge swaths of people when things go bad.
Please note that Alberta is the only other province that gets to kick themselves in the head to the tune of 15% thanks to Mr. Emerson. Thus, they came in second in the 'tangibility sweepstakes.


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