Softwood conflict

Questions abound over the softwood lumber deal speculation.

How much substance of the impending “framework” leaked to press and to market participants? Why do the Vancouver Sun and other media outlets have draft copies of the proposed agreement? Who else has had early access to this material information, an insider’s view that would allow a so informed speculator to turn some quick profits?

Pierre Lacroix, a Montreal-based analyst with Desjardins Securities, said he suspected a deal had been reached when he saw Canada’s hard-hit lumber stocks start to climb in recent days. More >

What is the scope of David Emerson‘s involvement in the negotiations? Did the former CEO of BC-based Canadian Forest Products create, influence or recommend an approach or specific points of agreement which favour one lumber producing region in Canada over another?

Ontario Natural Resources Minister David Ramsey said the agreement would cap the province’s lumber exports at 20 per cent below historic levels. “We’ve been short-changed and we won’t stand for it,” Ramsay told reporters outside the Ontario legislature. “This potentially could mean job losses for northern Ontario. “Every other province except B.C. is hurt by this.” More >

Ontario doesn’t like it. Market participants certainly see the deal works better for one region over all others.

Canadian Forest Products, International Forest Products, Ainsworth Lumber, West Fraser Timber – all significant BC producers – on speculation over an impending deal have very clearly outperformed eastern-based majors Abitibi Consolidated and Domtar. That outperformance may not last, as concern rises over emerging details of the deal, yet market speculators can do a lot with a little advance notice and 3, 4 or 5+% price moves. Both up and down.

The last government seemed to get in hot water when income trusts moved dramatically on rumours and speculation; should this government be in similar hot water?

When will a public inquiry be called?