BC's New Era of Labour Relations
The settlement of a nine-mmonth strike has resulted in a contract that will give Fletcher Challenge the flexibility eastern Canadian companies have had for years.
If anyone needed an illustration of the polarity in the Canadian forest industry, they should look no further than the long dispute between Fletcher Challenge Canada Ltd. and the Communications, Energy and Paperworkers Union in British Columbia.
Fletcher's attempt to get the same kind of flexibility in working conditions and job scheduling that the union has agreed to in Quebec has long been an anathema to the pulp workers in BC. No matter that the union has done it Quebec's way, in BC you do things BC's way.
After a bitter and very costly nine-month strike, the union has been dragged whimpering, if not kicking and screaming, into a new world of labour relations in which old ideas are dying. It has agreed to a contract that gives the industry the same kind of flexibility in work scheduling that Eastern Canada has had for years. Jurisdiction lines between union trades are coming down.
Until now it has been as if the pulp and paper industry exists in two different worlds, which of course it does. Provincial jurisdiction certainly comes into play. But even if the country functioned as one homogeneous whole - not divided into ten principalities guarding their rear ends like scared rabbits - there would still have been a Fletcher fight to settle.
Quebec, long dependent on its pulp and paper exports, has discovered the 2X4 market, and has been pumping so much lumber into the US Midwest and Eastern Seaboard that the Americans have said "enough". They have forced Canada into softwood export restrictions greatly resented in BC, and many feel that Quebec should get some of the blame for that.
West Coast stumpage costs are far higher than anywhere else in the country, particularly higher than in Quebec and Ontario. Indeed, in BC, Quebec is considered an unfair competitor, now that it's in the 2X4 business, by keeping its stumpage rates too low - less than half of BC's.
Quebec says it would gladly charge more if it had BC's quality timber. But with stiffer logging regulations and tougher terrain to work in, West Coast companies are paying the highest wood costs in the world, with little let-up in the foreseeable future, notwithstanding the provincial government's recent moves to ease the burden slightly. Corporate profits are consistently eight to nine per cent below those in the East. BC forest cormpany share prices run at 91 per cent of book value. East of the Rockies, they're 132 per cent of book Value, a clear 31 per cent advantage when capital is needed for expansion and modernization. Eastern Canada doesn't seem to mind paying the poor cousin. This helps define the root difference in the pulp union's schizophrenic position on workplace flexibility in Quebec and BC.
In the 1980s and early 1990s the mills in Quebec were in real trouble. Some still are. They're old and obsolescent. They're generally smaller in scale than the newer mills out west They're often tied directly to specific market arrangements with big customers, like the Wall Street journal.
In those years the industry began pushing for concessions, among them more flexibility, less jurisdictional rigidity between trades and more company control over work scheduling.
There was resistance, of course. The biggest confrontation was in Trois Rivieres, a town heavily dependent on the pulp mill. The town needed the mill to keep operating, a factor that weighed significantly in favour of the owners in the dispute. Out of such circumstances was bom the eastern version of the pulp union's bargaining catechism.
For most West Coast unions, not just the paperworkers, there has to be a BC solution to a labour problem in BC, not some blueprint from Quebec. When a argument gets to be nine months old, like the one at Fletcher Challenge, the sentiments run very deep. It also has to be said thar when one side is as conservative as the trade union movement generally is, fundamental movement toward change can be a rare commodity.
However, it does reflect the situation in the Canadian forest industry, where there's little co-ordination in national policy. The absence of national policy or even a national perspective is hurting the business now and will hurt it even more in the future.
Foreign consumers buy "Canadian" lumber and pulp - they don't specifi call buy "Alberta" "BC" or "Ontario" or "Quebec." product. When BC becomes the target of environmentalist-inspired boycotts in Europe, producers are at risk elsewhere, even if they are cutting less old growth than BC. But in fact BC's logging rules are more rigorous than anywhere else. So, sooner or later, Eastern Canada will have to recognize the danger everybody runs.
Technically it's very difficult to frame a national perspective. The West Coast is ecologically different from the BC Interior. The Prairies are different again and there are great contrasts between the Canadian Shield and the rest of the country. Common standards would require Solomon as the architect if they were to cross regional boundaries.
There's really not much the federal government can do to create a national focus. The provinces resist intrusion. But in truth, Ottawa's primary interest is in the tax revenue it gets from forestry. The jurisdictional argument ends up as a convenient excuse for not trying anything significant, except when it comes to external trade, as in the softwood export deal.
Even so, the world market in lumber and pulp is changing. Alternatives are being studied as raw material for pulping, such as straw and some arable crops. Fast-growing tropical forests are being developed for pulp production, and the temperate forest is being increasingly questioned as a priority source.
Forestry elsewhere may not be quite so vital to provincial economies as it is in BC, where in 1996 it provided 15 per cent of all jobs, and it was worth $18.6 billion, 20 per cent of the economy.
Whatever the difficulties, some kind of national perspective would be worth working for, if not a shared vision. Surely there would then be a better understanding of the problems that wend their way inevitably across the continent.
The forest industry is vital to the BC economy, providing 15 per cent of all jobs and contributing $18.6 billion annually to the economy.
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