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Canadian forestry sector gets help to become leaner, greener
Ottawa (AFP) June 17, 2009 Canada on Wednesday offered its pulp and paper mills up to one billion dollars (883 million US dollars) to convert to renewable energies and boost competitiveness, after a US subsidy controversially gave trade advantages to US mills. "Canada's forest industry is going through a very difficult period of restructuring and it's compounded by the collapse in markets caused by the global recession we're experiencing," said Natural Resources Minister Lisa Raitt. The funds are to be used over the next three years "to improve the energy efficiency of Canada's pulp and paper mills," including the installation of energy-efficient machinery, boilers or equipment to make ethanol from forestry byproducts, she said. Twenty-seven Canadian pulp mills that are producing "black liquor" -- a byproduct of the chemical pulping process that is used to help generate new energy for mill operations -- between January 1 and December 1, 2009 are eligible for the funding, Raitt said. In the United States, mills unexpectedly took advantage of a federal subsidy meant to help other firms convert to renewable energy sources, and reaped billions of dollars in tax credits for their black liquor fuel mixtures. The US tax credit is set to expire at year's end. But Canada and the European Union say the credit has given US forestry firms an unfair trade advantage. It also has led to US overproduction of pulp that created a glut in the global marketplace and depressed prices. "The credit in the United States is a significant incentive to US producers to both overproduce pulp... and has placed them in a very much more competitive position vis-a-vis the Canadian sector," said Raitt. The US Coalition for Fair Lumber Imports said in statement it was "deeply troubled" by this latest Canadian salvo in decades-long Canada-US timber trade disputes. The US forestry lobby said it was "disappointed that Canada chose a path that may harm the US softwood lumber industry and workers instead of addressing their grievance through the appropriate trade agreement vehicles." The Conference Board of Canada, however, said last week the Canadian forestry sector faces losses of up to 513 million dollars this year, and some 8,000 forestry jobs could vanish by 2010. The sector employs more than 90,000 workers in 85 Canadian municipalities. Share This Article With Planet Earth
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