Softwood Lumber: Emerson plays tricks with numbers

In a Department of International Trade news release issued today, Emerson marks implementation of Softwood Lumber Agreement, the following misdirection will probably go unnoticed by many:

Very shortly, sawmills and producers in many of the more than 300 forestry-dependent communities across the country will see the return of more than C$5 billion dollars, breathing new life into the sector at this crucial time.

Note the 5 billion dollars referenced? Some might think, “hey, we got the extra billion back and then some”, but that wouldn’t be true.

Approximately 5 billion dollars, U.S. dollars, were collected in illegal duties by the United States, over a course of time when the Canadian dollar was severely devalued. During the past couple of years the Canadian dollar has appreciated from approximately 61 cents to 90 cents. Canadian producers paid U.S. duties in U.S. dollars. The currency exchange losses during this period of time are enormous.

The lost opportunity costs, quite apart from currency losses, are equally significant. 5 billion US dollars could have been used by Canadian industry to further modernize and increase productivity, making them an even more formidable competitor against US producers. For those who worship at the altar of “free trade”, an unhindered and liberalized trade relationship is, according to the dogma, supposed to produce exactly such a result. Clearly this isn’t so when the implementation of such agreements is far from free.

Some might argue that being paid back when the Canadian dollar is at a relative high amounts to some twisted form of enforced savings, but only someone desperate enough to justify this breach of Canadian sovereignty and international law would step out on that limb.

Now Emerson is trying to paper over the lost one billion dollars which the U.S. has decided to keep, despite countless legal rulings by the courts – U.S. courts – which support Canada’s case that the duties were illegal all along.

By converting USD 4 billion and change into CAD, those not paying attention might just think we got back the 5 billion originally owed us. It isn’t so.

[1] Softwood Lumber Agreement 2006 (PDF)