On January 18^th the United States requested arbitration with Canada under the Softwood Lumber Agreement (SLA). This agreement has been in effect since October 2006 and was designed to create a predictable trade environment and provide stability and certainty to producers and consumers on both sides of the border. It put an end to unproductive trade litigations and has served both countries’ industries well during the recent global economic downturn. The dispute settlement mechanism was built into the Agreement to address differences in opinion and position that are bound to occur in the implementation of such a complex Agreement. The U.S. complaint deals with a pricing system that is no longer in place. The SLA provides that so long as B.C. follows the practices and procedures in place the U.S. has no right to complain that the Agreement is being breached.

Your Conservative government and British Columbia have been transparent on B.C.’s market-based timber pricing system. The increased proportion of low-value logs in B.C.’s timber harvest is due to the unprecedented infestation of the mountain pine beetle. The provincial forestry ministry estimates the epidemic of mountain pine beetles, whose larvae eat the inside of pine trees, has affected about $16.3M hectares of B.C.’s Crown forests. There is no justification for arbitration, and our Conservative government will vigorously defend the interests of our softwood lumber industry.

Under the SLA, the arbitration will be conducted in accordance with the rules of the London Court of International Arbitration (LCIA). An arbitral tribunal of three arbitrators will be established to hear the matter. The next step is for the U.S. to file its Statement of Case. Canada will subsequently respond.

The impact on B.C.’s timber supply has been staggering, as well as the impact on our communities, our economy, workers and families. Be assured that as your Member of Parliament for Okanagan-Shuswap, our Harper government will work closely with our province and the softwood lumber industry.