David Emerson: Canada's corporate cowboy

The only sector of B.C. that has benefited from Emerson's contributions as CEO and federal Liberal industry minister has been its big corporations, mostly giant forest companies.

The end justifies the means: that's the “new” ethics of the Stephen Harper government, and David Emerson's defection fits the mould perfectly. The only excuse that Harper can come up with is that former Canfor Corp. CEO Emerson will be “good for B.C.” Never mind the continued anger over Emerson's disdainful response and Harper's arrogance: just what is the evidence that Emerson will be good for B.C.?

The only sector of B.C. that has benefited from Emerson's contributions as CEO and federal Liberal industry minister has been its big corporations, mostly giant forest companies. Everyone and everything else has suffered: small forest companies, forest communities, forestry workers, and Canada's best chances of solving the softwood dispute with the U.S.

Emerson is still acting as a forestry CEO first and a public servant second. As Canfor CEO, Emerson was largely responsible for engineering the transfer of control over forestry policy from the government of B.C. to the large forest companies. In 2001-02, the newly elected B.C. Liberal government's Ministry of Forests commissioned George Hoberg, head of the forestry faculty at UBC, to make recommendations for implementing a new “results-based” forest policy. The process was to include extensive consultations with all stakeholders.

But Emerson and Canfor were not willing to wait. Emerson is enormously influential with Gordon Campbell, who appointed him to the politically sensitive chairmanship of BC Ferries, and over a nine-year period Canfor was the third-largest corporate contributor to the B.C. Liberal party ($332,593 between 1996 and 2004).

He ended up co-chairing a secretive parallel process involving just industry executives and government officials. They did an end run around Hoberg's recommendations and the new Forest Revitalization Act became law with no consultations whatsoever.

In an interview, Will Horter of the Dogwood Initiative, a land-reform NGO, said Emerson's intervention with Campbell led to “massive deregulation, which reduced public oversight and turned over every meaningful decision involving forestry to the [big] companies.” Until the new legislation, all transfers of forest tenure required public hearings in affected communities. That democratic process was gone with the stroke of a pen.

Emerson did not return a call to respond to Horter's comments.

Emerson has also played a defining role in the whole NAFTA/WTO softwood-lumber dispute, helping B.C.'s forest-industry giants cast themselves as the victims of the U.S. trade bullies. The fact is the Canadian forest industry is massively subsidized by the unconscionably low stumpage rates. All the rulings from NAFTA and WTO panels recognized these subsidies — what they rule against is the U.S. method of calculating the penalties.

And while the big companies cry crocodile tears about the American “bullying,” they make every effort to keep those huge subsidies. In doing so, they rob B.C. citizens of their rightful revenue from this valuable public resource.

British Columbia almost gives away its trees. More than a third of the trees harvested in B.C. since 2001 were sold to logging companies for 25 cents a cubic metre (physically, the equivalent of an average telephone pole). More than 85 per cent of the trees in the North Coast Forest District — home to the Great Bear Rainforest — go for this absurdly low price. The full market price for that telephone pole is closer to $5.

That is the real issue: what are British Columbians getting for their valuable forest resource? But Emerson will avoid this critical issue for as long as possible. He has already been accused of shelving a softwood-lumber deal that was ready for signing just before the federal election was called.

“Were there negotiations going on this fall and were they close to an agreement? Yes. Absolutely,” John Ragosta said in an interview with the National Post. Ragosta is with the U.S. Coalition for Fair Lumber Imports, the lobby group for the U.S. industry. Why did Emerson scuttle the pan-Canadian deal? Probably because his forest-company buddies refused to support it.

Dogwood's Horter thinks companies like Canfor, and CEOs like Emerson, aren't that unhappy with the U.S. tariffs. The tariffs and duties — which the big companies can absorb and still make a profit — set up a situation in which they can swallow up the smaller ones for whom the duties really are devastating. This is exactly what has happened.

As Horter said: “Canfor bought Northwood, then they consumed Slocan. Doman was cannibalized by Brascan, who merged it with Western Forest Products and then consumed Weyerhaeuser's coastal operations. Then Weldwood was consumed, Riverside and Lignum merged, then were gobbled up by West Fraser. And on it goes, with more mill closures and lost jobs.”

But Emerson didn't stop there. As industry minister under the federal Liberals, he supported tax regimes that rewarded forestry companies for rapidly replacing workers with machinery, a process accelerated by consolidation. And just for good measure, he played a key role in the $1.5-billion bailout for the forestry industry. The U.S. warned that this giveaway is also a subsidy and could undermine any new deal.

Will David Emerson continue to be “good” for B.C.? Thanks, but no thanks.

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