September 29, 2009
BC Forestry Sector Commends HST as “Biggest Thing” to Aid Recovery

VANCOUVER- A key representative of BC’s forestry sector has challenged the province’s political parties to unite in support of the HST as “the single biggest thing” to help the struggling industry become more competitive on the world stage.

In a presentation to the Legislature’s Finance and Government Services Committee in Vancouver yesterday, Coast Forest Products Association President Rick Jeffrey outlined the immense challenges that the BC forestry industry is now facing as a result of the global economic downturn, decline in American housing starts, and falling international wood product prices. He concentrated his presentation on what measures the government can do to help the forestry sector with a strategic, sustained recovery.

“The HST is probably the single biggest thing you could have done for us, so I guess the first recommendation I'll have for this committee is to make sure that you put your politics aside, look at good tax policy, understand that this is a good tax policy and make sure you implement it and pass the legislation,” said Jeffrey in a plea for the NDP to end their irresponsible, public pandering opposition to the Harmonized Sales Tax introduced by the BC Liberal government.

Jeffrey went on to demonstrate the NDP’s lack of understanding of the HST by correcting comments by NDP Finance Committee member Doug Donaldson. 

“I couldn't help but hear Mr. Donaldson's question, I believe it was, about what we were going to do with all those savings. I might just remind you. They're not really savings. You've been taxing us to the tune of $140 million a year, a tax that we can't recoup anywhere in our marketplace. It's really hard for us to tell the Chinese, when we sell them a thousand board feet of lumber: ‘By the way, here's your 7 percent sales tax. We're just going to tack it on so we can recoup it,’” said Jeffrey.

“It brings our marginal effective tax rate in B.C. down from 29 percent to 14 percent. We in the forest industry have a real hard time getting a return on capital. As long as we have a hard time getting a return on capital, finance institutions and lenders don't want to provide us money. One of the ways that you can make it more attractive to invest is to make sure that the marginal effective tax rate is in a place that's competitive. This helps us get there.

"We know that this will lead to lower operating costs. It will preserve cash flow at this time. It will help preserve the existing jobs and the incomes that go with those jobs. It will assist us, when the recovery comes, in being able to take advantage of that, and it will lead to investment, productivity, competitiveness and longer-term jobs.

The HST for the forest industry is a very good thing, and we commend the Liberal government for bringing it in and request all parties to support it, because it is good public policy,” said Jeffrey.

A BC Liberal committee member, Nechako Lakes MLA John Rustad, who represents Northern communities heavily dependent upon forestry, is challenging Donaldson and his NDP colleagues to support forestry by supporting the HST.

"It was embarrassing to see just how uninformed the NDP are about the plight of the forestry communities and the vital role that the HST will play in that sector's recovery," says Rustad."If the NDP are against economic recovery and sustainable jobs that will help hard-working families and communities that depend on forestry, then they should come out and say it rather than play games with the HST to score cheap political points that do nothing but hurt our resource-based economy."

"Donaldson is a northern MLA. His constituents depend greatly on forestry jobs. He should listen to forestry experts such as Rick Jeffrey, put politics aside, and do what is right by voting in favour of the HST," added Rustad.

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