May 18, 2017

Injured Workers Demand Canadian Standard Compensation

"We Are Working on a Provincial Campaign to Reform the Compensation System to Fulfill Its Mandate"

- Karl Crevar, Ontario Representative, Canadian Injured Workers' Alliance -

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Injured Workers Demand Canadian Standard Compensation
• "We Are Working on a Provincial Campaign to Reform the Compensation
System to Fulfill Its Mandate" - Karl Crevar, Ontario Representative,
Canadian Injured Workers' Alliance
• "We Want to Restore Balance at WorkSafe New Brunswick" - Patrick Colford, President, New Brunswick Federation of Labour

Canadians' Need for Their Own Steel Industry
• New Class-Action Lawsuits Against U.S. Steel
• U.S. Steel Faces Historic Necessity for Change - K.C. Adams

Consequences of Trade War in Forestry Industry
• Resolute Forest Products Lays Off Workers
• Softwood Lumber Prices Rise Sharply in Canada

Injured Workers Demand Canadian Standard Compensation

"We Are Working on a Provincial Campaign to
Reform the Compensation System
to Fulfill Its Mandate"

- Karl Crevar, Ontario Representative, Canadian Injured Workers' Alliance -

Workers' Forum: What are the main issues facing injured workers at this time?

Karl Crevar: What we find in our work is that there are common problems going on right across Canada such as the treatment of pre-existing conditions. Some of the legislation is also very similar. Even on the health and safety issues, the numbers of workplace fatalities are similar and they are on the rise.

We have a court case that is going on in regard to Non-Economic Loss (NEL) awards. We went to court to see if workers can proceed and the Supreme Court said yes, we can proceed. There are a number of people whose NEL has been reduced because of existing legislation on pre-existing conditions. A NEL award happens when you have a permanent impairment. They were introduced to replace full lifetime pensions back in 1990. Before that, if you had a permanent impairment you could be awarded a lifetime pension. Now, if you have a permanent impairment, you are only going to be assessed up to age sixty-five. Pre-existing conditions considered in adjudicating claims are being used widely all over the country to reduce injured workers' benefits.

Then there is the issue of the workers' doctors. A number of doctors came out publicly two years ago because their decisions were being overturned by Ontario's Workplace Safety and Insurance Board (WSIB). A number of complaints have been filed with the Ontario Ombudsman. Professional medical opinions are being overturned by workers' compensation boards across the country, which are using medical consultants to override the opinion of the workers' physicians.

The Ontario Network of Injured Workers' Groups, of which I am a member of the Board of Directors, also obtained intervenor status in the Supreme Court of Canada in a case out of Quebec regarding the human right of an injured worker to an accommodation with suitable duties when the worker exercises their right to return to work. We were part of that case because we are concerned that a Supreme Court decision could have an impact not only in Quebec or Ontario but right across Canada.

Generally what is happening is a push for financial stability of the system. Compensation boards are trying to get rid of their unfunded liabilities, particularly in Ontario where for the last seven years there has been a strict focus on unfunded liability. The government and the WSIB have developed policies to more strongly enforce the issue of pre-existing conditions in order to reduce NEL awards. What it has actually done is increase the number of cases that are going to the Workplace Safety and Insurance Appeals Tribunal. People are rejecting the decisions of the Board and there are approximately four to five thousand claims sitting or waiting to be adjudicated just in Ontario. Workers have to wait anywhere from two to five years and I suspect that the same thing is happening across Canada. The Ontario government and the Board are addressing the issue of unfunded liability, but who is paying for it? It is the injured workers. It is not true that the system has to be 100 per cent funded in order to pay the cost of the future claims if the Board and the government were willing to raise the assessment rates, which they are not doing. In spite of the increase of cases that are being denied and going to the tribunal and the cuts we have been seeing in the NEL because of pre-existing conditions, the Board in Ontario reduced assessment rates for the year 2017.

As more and more workers' claims are being denied they are forced to go to other social services such as social assistance. Governments are downloading costs onto communities, onto the taxpayers, which is not the way the workers' compensation legislation originally was. The employers were to pay the assessments to fund the program, not the taxpayers or the injured workers. We are raising this in the communities, particularly with our Bike Ride that is going on from May 25 to June 1. We are opposing the downloading of the costs of the compensation system from the employers onto the communities and the taxpayers.

Another big issue of concern is the fact that there is a trend, especially in the U.S., for employers to be able to opt out of the compensation system. This has already happened in a few states in the U.S. and this means that the employers are managing their compensation, their injuries. This is self-regulation and it is an alarming trend that we are witnessing.

In Ontario, we are also working on a provincial campaign, with our labour and community partners, to reform the compensation system so that it fulfills its mandate as was set by the Workplace Safety and Insurance Act. This is going to be a real challenge not only to the Board but to the next government.

Ontario elections are coming in 2018 and we want this reform of the compensation system to be part of the platform of the parties that are going to run to form the government. Poverty of injured workers has gone up, family breakups have gone up, all these things are on the rise. We are going to make these issues election issues.

"We Want to Restore Balance at
WorkSafe New Brunswick"

- Patrick Colford, President, New Brunswick Federation of Labour -

Workers' Forum: The government of New Brunswick announced at the beginning of May that it will establish a task force to examine WorkSafe, the workers' compensation in New Brunswick. What is the stand of the Federation of Labour on this move by the government?

Patrick Colford:  Certainly, if this is the direction that the government wants to go with the task force, the New Brunswick Federation of Labour, the largest labour body in the province, should be at the table. We are also asking for the public to talk to their MLAs about WorkSafe. We want the public to ask questions. We have been calling for a while for assessment rates to be increased, because the WorkSafe Board told us that by 2017 the fund may be in a deficit position. Over the last six years the average rate has declined from $2.08 per $100 of payroll in 2010 to $1.11 in 2016.

We are a little bit worried with that because last time that it was in a deficit position, in the early 1990s, workers gave up a lot of benefits and a lot of clawbacks were introduced. That is when New Brunswick introduced the three-day waiting period, when we went from 90 per cent wage recovery back to 80 per cent, as well as a whole host of clawbacks. It was presented at the time that we were going to do this until the system got back to being funded at 110 per cent as that is where the comfort zone is. We have seen the system funded as high as 130 per cent and actually in the last two years, since 2015-2016, when the system was in that surplus range, rebates were given back to the employers. In the last three years employers have received rebates of up to $51 million and workers' benefits have not increased. There has been some increase of the assessment rates for 2017 and the employers' side is crying foul, saying they can't afford assessment rates to go up otherwise benefits will have to shut down. This is the same rhetoric we hear all the time. We even have some of the biggest employers' representatives saying that WorkSafe should be run by a private insurance firm.

We hope this task force won't result in more cuts to the benefits of injured workers. Our main concern is restoring the balance at WorkSafe New Brunswick, getting rid of that three-day waiting period. In the province of New Brunswick if you get hurt at work and need to file a claim you have three days without pay before you file your claim. That is three days of lost wages. The other aspect is the wage recovery. A lot of my members have a hard time living on 100 per cent of their wages so to be penalized for being injured at work does not make sense. Injuries are not being reported because workers say that they will work with their injuries because they cannot afford that three-day waiting period and the lost wages. People are working injured and suffering even greater harm because their injuries do not have time to heal.

The New Brunswick Federation of Labour is holding its Biennial Convention May 28-May 31 and we are going to be launching our WorkSafe campaign at the convention.

Canadians' Need for Their Own Steel Industry

New Class-Action Lawsuits Against U.S. Steel

Numerous class-action lawsuits were launched against U.S. Steel at the beginning of May, accusing the company of misleading shareholders and buyers of USS stocks. According to press releases, lawsuits have been filed on behalf of U.S. Steel investors by Robbins Arroyo LLP, Lundin Law PC, Khang and Khang LLP, Kessler Topaz Meltzer and Check, LLP, Rosen Law Firm, Johnson and Weaver LLP, Goldberg Law PC and others.

Excerpts from two of the legal firms' press releases explain the nature of the complaint. In a news release on May 9, Robbins Arroyo LLP said:

"Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed against United States Steel Corporation (NYSE: X) in the U.S. District Court for the Western District of Pennsylvania. The complaint is brought on behalf of all purchasers of U.S. Steel securities between November 1, 2016 and April 25, 2017, for alleged violations of the Securities Exchange Act of 1934 by U.S. Steel's officers and directors. U.S. Steel produces and sells flat-rolled and tubular steel products primarily in North America and Europe.

"According to the complaint, in 2013, U.S. Steel launched a process called the 'Carnegie Way,' which was a business strategy designed to create stockholder value. In the company's 2016 Form 10-K filed with the U.S. Securities and Exchange Commission on February 28, 2017, U.S. Steel stated that '[t]he Carnegie Way has already driven a shift in the Company that has enabled us to withstand the prolonged downturn in steel prices while positioning us for success in a market recovery.' However, on April 25, 2017, U.S. Steel reported a net loss of $180 million, or negative $1.03 per diluted share, and a negative operating cash flow of $135 million. The company further revealed a reduced 2017 outlook that widely missed analyst expectations, including a 35 per cent reduction to its 2017 adjusted earnings guidance before interest, tax, depreciation, and amortization. During a conference call on April 26, 2017, U.S. Steel's Chief Executive Officer, Mario Longhi, stated that the company would 'be taking more downtime at our facilities, which will limit our steel production volumes.' On this news, U.S. Steel's stock fell 26 per cent to close at $22.78 per share on April 26, 2017...."

On May 9, Lundin Law PC announced a suit concerning the same period. It stated:

"According to the Complaint, during the Class Period, U.S. Steel issued materially false and/or misleading statements and/or failed to disclose: that while the Company was implementing its Carnegie Way program, it was focused on cutting costs and was not making investments necessary to position U.S. Steel so that it could respond to improved market conditions; that the Company's failure to invest in improving capital assets during the industry downturn, in order to report apparent financial improvements, meant that U.S. Steel had higher production costs than its competitors, even in the face of improved pricing, which would negatively impact its financial results; and that U.S. Steel was forestalling expensive capital equipment upgrades in order to boost its short-term financial results at the expense of long-term financial performance, leaving U.S. Steel in need of accelerated, costly equipment upgrades that would leave the Company years away from generating improved financial performance. When this news was released, U.S. Steel's stock price declined materially, which harmed investors according to the Complaint."

U.S. Steel Faces Historic Necessity for Change

- K.C. Adams -

Ruling oligarchy blocks resolution of economic problems and
continues on failed path

U.S. Steel considers the amount it does not spend on renewing its productive force as savings. The quantified savings year upon year since 2014 is $2.5 billion. It reports that the company "has realized from CEO Mario Longhi's Carnegie Way efficiency and cost-cutting initiative $575 million in 2014; $815 million in 2015; $745 million in 2016; and $310 million so far this year."

The result, in the words of USS, is "enormously more efficient operations." This factor coupled with rising steel market prices should result in "enormously" improved financial results. Why then, did U.S. Steel report a $180 million first-quarter loss and slash its 2017 profit outlook in half? Simply put, the Carnegie Way and other forms of refusal to renew productive capacity such as closing perfectly good mills are examples of the ruling oligarchy's unwillingness to face the historic necessity for a new direction in the economy.

The present relations of production whereby the actual producers are not in control of the socialized forces of production doom the economy to failure. Private control of socialized production cannot take advantage of or control the production and distribution of the enormous social product. The aim of private ownership to compete globally for profit and empire-building with other privately owned parts of the economy is in contradiction with the objective conditions of modern socialized production.

Socialized production demands broad cooperation of all parts and sectors of the economy in a nation-building project to guarantee the well-being of the people and general interests of society that opens a path towards the emancipation of the working class. The modern working class is the only social force with the aim and outlook to manage the socialized means of industrial mass production for the benefit of all, in harmony with all its interrelated parts without crises. The working class as the actual producers has the aim and duty to distribute the social product within a nation-building project that guarantees extended reproduction of the economy and the well-being, security and rights of all.

U.S. Steel and Its Years of Failure

U.S. Steel executives and private institutional ownership of its stock equity and debt refuse to recognize and accept the law of a falling rate of profit in industrial mass production caused by the ever-increasing amount of social wealth required in modern productive forces. To counter the law, the ruling financial oligarchy engages in reckless parasitic adventures including predatory and inter-imperialist wars with competitors and lashes out at the working class and productive forces in destructive anger.

USS has made equity profit in only one year -- $102 million in 2014 -- since 2008. Why then have all the "cost savings" from closing and abandoning facilities in Canada and elsewhere, refusing to invest in renewing production, and forcing concessions from steelworkers and salaried employees not resulted in profits? Where is the much-ballyhooed $2.5 billion in cost savings from the Carnegie Way? This puzzle confounds financial analysts and representatives of the institutional owners of the company's stock equity and debt who are impatient for positive answers and results and do not appreciate continuing losses. The experts, journalists and university pundits are all schooled in seeing only what the ruling imperialist class wants them to see. They are not good at engaging in acts of finding out what the root problems really are in the socialized economy.

Len Boselovic of the Pittsburgh Post-Gazette writes, "The miserable performance makes U.S. Steel's constant contention that the company can compete with anybody if only Washington would crack down on predatory, subsidized imports look pretty ridiculous." He quotes Axiom Capital analyst Gordon Johnson saying, "They (USS) can't compete with anybody on a level playing field. They have the highest costs in the industry."

Boselovic writes, "In announcing the company's $440 million loss last year, Mr. Longhi emphasized that 'Carnegie Way transformation efforts' have improved the company's cost structure. 'These substantive changes and improvements have increased our earnings power'."

Really, Mr. Longhi, why then is USS facing another huge quarterly loss and projected losses for years to come?

New York economic analyst Charles Bradford was not convinced and looking for the promised improved earnings in U.S. Steel's first-quarter numbers asked rhetorically during the company's quarterly conference call, "Where is it?"

"Oh, it's there," replied a U.S. Steel spokesperson. "The company completed nearly 450 Carnegie Way projects in the first quarter and has over 3,500 more in the pipeline."

Boselovic writes, "Such pronouncements make skeptics think the critical elements of the Carnegie Way are smoke and mirrors.... [Axiom Capital analyst Johnson] believes the problem is that for years, U.S. Steel has spent less on capital expenditures to modernize its mills than it has reported in depreciation and amortization expenses -- an accounting measure that expenses the cost of the company's steelmaking equipment over its useful life and measures how much book value the equipment loses each year.

"When depreciation and amortization exceed capital expenditures, it is a strong indication that a company is not investing enough to keep its plant and equipment up to date. 'This is a company that has under maintained its facilities for 80 years,' Mr. Bradford said."

Mr. Bradford could investigate who has claimed the added-value steelworkers have produced over the years. Added-value has been available for reinvestment in the productive forces if the owners of debt and others would reduce their claims and graciously accept a fall in the rate of profit. But that is not in their class nature.

Owners of stock equity have routinely claimed twenty cents per share annually for years, around $34.8 million, on greatly fluctuating stock ownership equity of $3.5 billion. Executives have doled out this amount even while announcing continuous quarterly losses per share.

The lion's share of the annual claim on added-value goes to owners of debt, which amounts to about $230 million on $3.4 billion of debt ownership. Other claimants on added-value include executive managers and governments.

The totality and pressure for claims on added-value go beyond what is available and often dips into transferred-value that should be used to replace depreciated machinery or pay for material inputs. Ironically, the subjective feature of the imperialist controlled economy with private ownership's insistence on an ever-greater return on its investment of social wealth despite the objective law of a falling rate of profit puts pressure on executive managers not to reinvest in production from added-value but instead use additional borrowing, which exacerbates the problem and leads to greater crises.

In large industrial companies requiring huge investments of social wealth in the means of production, the oligarchs prefer debt ownership for its regular claims, and stock equity ownership for a chance to manipulate the fluctuating stock price to their advantage and fleece other buyers of stock. Many industrial companies pay no stock dividend at all but must service the debt ownership with interest profit or go into bankruptcy protection.

Len Boselovic continues, "[Johnson] has been listening to the company's pronouncement about being able to compete on a level playing field for decades and isn't buying it. 'This is the same garbage story we heard in the '70s when [former chair of USS] David Roderick claimed they could compete with anybody,' he said.... If Mr. Longhi had paid more attention to his mills instead of government handouts, 'Maybe things would have been a little different,' Mr. Johnson said."

Forbes, a major news agency of the financial oligarchy, tried to explain the situation in an item entitled, "Underperforming Amid Favorable Business Conditions: The Curious Case Of U.S. Steel." The explanation looks only at the obvious surface features and fails to probe deeply into why such problems continually plague not only particular companies but entire sectors and the socialized economy captured within the private control of the oligarchs.

The Forbes article states, "U.S. Steel dismayed investors with an underwhelming Q1 earnings release last week. The company reported an unexpectedly steep decline in shipments for its U.S. Flat-Rolled steelmaking operations, which account for around 70 per cent of the company's revenue, translating into a significant decline in EPS (Earnings Per Share). The poor Q1 2017 earnings resulted in a sharp decline in the company's stock price over the course of the past week.... The company attributed the decline in shipments for the Flat-Rolled division to planned production outages as it embarks upon its asset revitalization program, which is aimed at improving the efficiency, reliability, and product quality in addition to lowering production costs. However, in doing so, the company is foregoing higher production levels during a favorable time period characterized by rising steel prices and demand for the commodity in key markets.

"The improved business conditions are reflected in the recent recovery in steel prices, with U.S. Steel reporting an 18 per cent year-over-year increase in realized prices for the Flat-Rolled division in Q1.... In Q3 2016, the division's shipments were negatively impacted to the tune of 125,000 tons, or around 5 per cent of the company's Q3 shipments, as a result of unplanned production outages. The division's shipments fell further 6 per cent sequentially in Q4, as a result of planned production outages. The company lowered production levels in Q4 as it undertook its asset revitalization process, partly aimed at addressing operational problems leading to unplanned production outages. However, problems for the company's Flat-Rolled steelmaking operations continued into 2017, with the accidental release of waste water from the company's Midwest plant in Portage, Indiana, which temporarily halted operations at the plant. Moreover, the company reported a 4 per cent year-over-year decline in shipments for its Flat-Rolled division in Q1 2017, with the decline in shipments attributed to planned production outages under the asset revitalization program.

"The recent disruptions at the Flat-Rolled steel division's facilities have raised concerns over U.S. Steel's ability to increase production levels to profit from the improved business conditions for steel in the U.S. The asset revitalization program will lower the Flat-Rolled division's shipments by around 1 million tons in 2017."

The Forbes article fails to mention the demands for concessions from workers, the numerous recent shutdowns, closures and sale of USS productive facilities including Stelco in Canada, a mill in Serbia, facilities in Gary, Indiana; Fairfield, Alabama; Lorain, Ohio; Lone Star, Texas; Granite City, Illinois; and a rumoured sale of its mill in Slovakia. All these anti-social attacks and refusal to deal with the root problems in the economy have resulted in a tremendous toll on active and retired workers and their communities that depend on the value workers reproduce at those facilities. The failure to act to resolve the problems and contradictions in the economy exposes the oligarchs as unfit to rule. The working class must organize to deprive the ruling imperialist elite of their power to block the opening of a new direction with socialized relations of production in conformity with the objective conditions replete with a new aim. The ruling financial oligarchy puts its narrow private interests ahead of the broad interests of the working people and general interests of society. The social responsibility falls on the shoulders of the working class to build the new.

Consequences of Trade War in Forestry Industry

Resolute Forest Products Lays Off Workers

Protest by forestry workers in Ottawa, June 2, 2009, demanding government take action to defend forestry workers and their communities.

Resolute Forest Products began cutting shifts at seven sawmills in Quebec this week and delaying the start of its forest operations. One thousand two hundred and eighty two workers will lose their jobs for an indefinite period. Forestry workers and their small communities are suffering the consequences of an orchestrated crisis in a sector dominated by huge companies such as Resolute.

The Quebec forestry industry accounts for 60,000 direct jobs and many more indirect ones. In addition to contributing lumber for Quebec and Canada, the social product is highly regarded as an export. Ninety per cent of Quebec's softwood lumber exports go to the United States. Workers in the sector contribute enormous value to Quebec and Canada. They deserve respect and peace of mind about their security and future.

La Tuque mayor Normand Beaudoin says Resolute has laid off 100 mill workers in his community located about 200 kilometres south of the Lac-Saint-Jean region. He said any extended downtime would be difficult not only for the working families directly affected but the entire town.

Outside Quebec, a small cedar mill in New Brunswick recently closed affecting six workers reflecting the growing crisis across Canada and hardship imposed on workers. Danny Stillwell, owner of Hainesville Sawmill Ltd., northwest of Fredericton, said the mill will have to cease operations until the nonsense is over and he can again sell lumber in the U.S. with some certainty without having to pay thousands of dollars in duties before any money is received from the buyer. Mr. Stillwell said his mill is the major employer in the small town so the closure "is a very big deal." Lumber from the small Hainesville Sawmill faces a U.S. duty of 19.88 per cent having been lumped in with all small sawmills throughout Canada. They also have to pay the duty immediately and retroactively on all the lumber they exported to the U.S. back to January 31.

Lumber from New Brunswick's J.D. Irving, which has mills throughout the province and in the U.S., faces a much lower tariff of 3.02 per cent. For the lower tariff, the self-serving company "voluntarily" argued before the U.S. International Trade Commission that the timber it mills comes from privately-owned forest land unlike many mills across Canada, which pay ground rent or stumpage fees to the state to log Crown-owned forests. Along with other forestry giants in North America seeking to raise prices, J.D. Irving implied that certain competitors, especially in the West, have an "unfair advantage," as almost all forest land is Crown-owned. The oligarchs at J.D. Irving will also benefit directly from this crisis with higher lumber retail prices both in Canada and the U.S. and possible expansion by taking over the market and even operations of small mills such as Hainesville Sawmill Ltd.

It should be noted that New Brunswick Liberal Premier Brian Gallant, a representative of the financial oligarchy in a province dominated by the Irving Empire, has been quick to argue against any state aid for small forestry companies and workers during the current lumber crisis. He contends that the U.S. government would use that as "further evidence of unfair subsidies." Gallant has appointed David Wilkins to manage the dispute on behalf of J.D. Irving's operation and others. Wilkins is the former U.S. ambassador to Canada during the reign of President George W. Bush.

Fears exist that this fifth softwood drama concocted by the financial oligarchy, which dominates and controls Fortress North America, could be as punishing as the last one from 2004 to 2006. During that period, Canadian forestry workers lost 20,000 jobs and 400 sawmills closed. The softwood sector had not even recovered from that blow when it was hit again with the collapse of the U.S. housing market in 2008. Once the worst of the damage of that crisis was thought to be over, the forestry oligarchs are now using the current upswing in U.S. construction and increased lumber demand to go after higher prices by orchestrating another softwood dispute.

The financial oligarchy and the oligopolies it controls in the forestry sector throughout Fortress North America are engaged in constant battles to defend their private interests and expand their empires, which continually disrupts the sector leading to economic crises. While falsely presented as a national dispute between Canada and the U.S. over terms of trade, the recurring softwood lumber drama in effect has become a regular occasion to raise retail lumber prices, weaken the forestry workers' organized defence of their rights, and to consolidate ownership and control of the sector in the hands of the few.

Calls are becoming louder to put an end to these recurring crises that disrupt the lives of so many working people in both Canada and the United States and seriously harm the economies of both countries. To bring stability and security to forestry workers and their communities and to those sectors reliant upon lumber supply and consistent pricing, a new direction for the economy free from the self-serving control of the oligopolies has become the order of the day.

(With files from the Canadian Press)

Softwood Lumber Prices Rise Sharply in Canada

Workers' Forum received a letter and photos from an Ontario construction contractor showing the sharp rise of softwood lumber prices in Canada. The letter and comment from Workers' Forum is below.

***

"This size lumber (in photo -- 2"x4"x8') was $2.59 over the winter. Now, Home Depot and/or the suppliers always price gouge come spring and summer but I have never seen it this high. I am thinking it is connected to the current scam trade "dispute" and the corresponding hysteria, which tries to justify price fixing. Weyerhaeuser [the company at the centre of the recent disputes -- WF note] is the other supplier at Home Depot. I find it goes back and forth with Resolute. Probably whoever gives the better deal for Home Depot at any given time."

Workers' Forum Comment

A 46 per cent price increase for lumber! The U.S. tariff does not apply to lumber sold in Canada but obviously, that does not stop the gouging. The big companies must have colluded to apply the higher U.S. price throughout Fortress North America. The contractor is correct in denouncing it as a scam.

Resolute's specific softwood lumber tariff is 12.82 per cent, which is lower than the average of 19.88 per cent most companies are assessed. This means it will pocket any difference from the tariff and the new higher market prices. Also, it is one of the four companies that do not have to pay the duty at the border but only after selling the lumber and submitting the paperwork.

Weyerhaeuser's assessed tariff is the average 19.88 per cent but Weyerhaeuser does not have to ship much lumber to its customers in the U.S., as it is the largest softwood lumber producer within the United States. Unless of course the specific wood product is only found in Canada. Weyerhaeuser and other companies with mills in the U.S. will greatly benefit from the tariff and higher prices, as they will pocket the duty as a higher market price.

All the larger lumber companies will benefit from the higher prices in Canada and from expansion as they seize control of the small mills that cannot weather the loss of some of their U.S. market, which has been the case each time the U.S. government has imposed a higher tariff. In addition, many smaller companies will suffer from having to pay the duty upfront and wait for it to be returned with higher prices when and if the product is sold.

Many construction companies will suffer a loss of business in both Canada and the U.S., if they cannot find customers willing to pay a higher price matching the higher price of production for their construction social product. There could also be some switching of construction material away from wood.

U.S. furniture manufactures have launched a petition for exemption from the softwood lumber tariff, as the type of lumber needed for much of their production is only found in the colder Canadian climate and they cannot sell furniture with the higher price of production forced upon them with the tariff.

Resolute may not profit as much as the other big companies in the Canadian forestry sector because at this point it does not have any U.S. lumber mills. In addition, Resolute's Canadian mills are in Quebec and Ontario where the ground rent for forest use is higher than in BC. The big lumber companies in BC with mills in the U.S can supply most of their U.S. lumber customers from their U.S. mills, especially as demand may drop off somewhat with these kinds of large price increases. They can also ship BC raw logs to their own U.S. mills and then cut them into lumber circumventing the tariff. Raw softwood logs are not subject to the duty.

Resolute and other producers in Canada are also threatened with the countervailing duty (accused of selling social product in the U.S. below the price of production) to be applied later this year on top of the tariff. The extra duty will then put even more upward pressure on lumber prices through North America.

The 46 per cent jump in the price of lumber at Home Depot in Canada shows how susceptible the economy is to manipulation by the financial oligarchy and how destructive this manipulation can be for the economies of both the U.S. and Canada. The time has come to remove the power of the oligopolies from the economy and march forward in a new pro-social direction under the control of the actual producers, the working class, and their allies.

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