Low-interest loans needed to boost industry: Federation of Canadian Municipalities discouraged by the lack of funding aid for operating mills in the North. (Forestry: Special Report).

Government aid will assist communities during the softwood lumber dispute, but the Federation of Canadian Municipalities had hoped for low interest loans to help the industry.

The splinters of the trade dispute between the United States and Canada are being felt, particularly in communities that rely on the industry as a major employer.

The federal government announced $245.6 million in aid for communities affected by the dispute. However, of the total, $40 million will be used to combat pine beetle infestation in British Columbia, and more than $23 million for a pulp and paper centre in Trois Rivieres.

The government has committed $71 million to assist laid off workers, and $110 million for a national Softwood Industry and Community Adjustment Fund.

"We were pleased with the aid package because, when you are a community dependant on the industry, laid off workers need access to aid, and quickly," says Jamie Lim, mayor of Timmins and co-chair of the Federation of Canadian Municipalities' softwood lumber task force. "As for the Community Adjustment Fund, we are trying to find out the criteria and how it will be distributed.

"We hope it will be flexible so the municipalities that do need it can access the funds. I was concerned about the funds for the beetle infestation and centre; it should have been a separate announcement. I was disappointed that there were no low interest funds made available to the forest industry. Maybe the mills that did close would have remained open if they had access to low interest loans."

The FCM task force has been lobbying on the behalf of municipalities and has kept regular contact with all levels of government.

"We see ourselves as the voice of municipalities," she adds. "Our goal is to encourage the government to continue on with their dual track effort of litigation and negotiations to find a long-term resolution to ensure at the end of this war, we have unrestricted access. That has to be the final solution."

Canada has taken the dispute to the World Trade Organization and North American Free Trade Agreement commission. In preliminary decisions, the WTO has ruled in Canada's favour that the he U.S. imposed 27 per cent antidumping and countervailing duties on Canadian softwood lumber violated international trade rules. The FCM is still confident that Canada will prevail with regards to its litigation.

The task force has also formed allies in the U.S. that have also taken up the fight for unrestricted unencumbered free trade.

"I think it is better for President George W. Bush to hear the message from his own citizens that U.S. protectionism is unacceptable."

The FCM task force is planning a day-and-a-half event in Washington at the Canadian embassy with U.S. allies, including industry leaders, affordable housing associations and members of the U.S. congress who have supported Canada, she adds.

It is hoped that negotiations between the U.S. and Canada will resume early in the new year, however, if discussions do not resolve the dispute, Canada may have to wait until a final ruling from the WTO, which is not expected until spring.