Secondary, or second class?

The other day, we heard about the signing of a new free-trade deal, this time with South Korea. According to the government, the South Korean deal means, “Forestry and value-added wood products: (emphasis added) duties on 85 percent of tariff lines will be eliminated.” This, of course, begs the question: what portion is value-added, and what does value-added mean? Better yet, who lobbied for the deal?

Unfortunately, value-added is only: the value-added sectors of oriented strand board, plywood and particle board — what we know as “primary.”

Kerry Knudsen

Kerry Knudsen

Therefore, when I asked myself what organization in Canada is responsible for lobbying for such value-added products as cabinetry, bedrooms, dining rooms, flooring, millwork and toys when it comes to working out trade deals, I hit the same old wall. Nobody. Every time an institution is created, money is allocated or a trade deal is cut, there stands primary.

One of the commonly cited organizations in news stories is FPInnovations, which receives between $90 and $100 million annually in revenues and had a profit of a little over $2 million in FY 2012/2013. About 50 percent of revenues are from federal and provincial governments.

Terry Knee, media relations for FPInnovations, says, “FPInnovations’ mandate is research and development which also leads us to work in the areas of codes and standards on a national and international level. We have a world-class reputation in these fields. We are not mandated, nor do we work at marketing the industry via trade agreements or other tools and believe your readers would be better served by consulting organizations both on a regional and national level that successfully fulfill that mandate.”

However, FPInnovations is both active in supporting our Canadian competitor in the secondary industry and actively tried to gain oversight of Wood Industry. We were just asking what FPInnovations does to market secondary products in its overseas endeavours.

Not so long ago we remarked how many of the rural B.C. students trained at the secondary-founded Centre for Advanced Wood Processing were taking their skills back home to primary. Dick Stroink, the former general manager of Blum Canada, was on the board that founded the CAWP. Long-since retired Stroink speaks freely about the decision to place the CAWP in B.C. “I said at the time,” he says, “we should place the secondary-wood program in the middle of the country, because if we placed it out in B.C., the primary side would move in and take over our work and our investment.”

I can’t blame the primary forestry industry for laying claim to everything we establish. There is nothing like power for a bureaucrat or money for his union. However, if the real value-added wood sector in Canada does not get a grip on the propaganda machine, we will continue to see others stepping up to take credit for Canada’s wins on the one hand, and sliding Canada’s resources into its pocket with the other.

And, in case you hadn’t noticed, it is hurting us. If FPInnovations, alone, is getting $100 million per year in part to promote secondary, any benefit to secondary is news to Wood Industry.

In terms of export potential, making stuff out of wood is the only rational way to define value-added. I will grant that making trash into OSB adds value. But the dollars are being allocated based on a claim to supporting secondary, even if the only visible evidence of a relationship with secondary is the ability to spell millwork on a grant form.

Our sector has more businesses. Wood Industry’s mailing list varies between 13,000 and 14,000. Before the crash, we were at 18,000. We also have more urban involvement, a broader tax base and better public contact than primary. If our combined governments can pay out $50 million a year, a portion of which is claimed to be for value-added, maybe the governments should ask a professional producer instead of a professional recipient.

Editor’s note: Because this issue involves millions of dollars of tax money, and because it involves federal and provincial governments, we request that you forward a copy of this editorial to your MP or MPP. A PDF is available for download here, as is the contact information for your representatives here, and please cc me at kknudsen@wimediainc.ca.

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