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Sask. economic ‘bright spot’ hit with new tariff
April 25, 2017 – 4:51pmUpdated: April 26, 2017 – 6:45am
Forestry remains a key industry in northern Saskatchewan, where it is the second most important economic driver.
Quebec and B.C. will be hit the hardest by new duties imposed on the Canadian softwood lumber bound for the U.S. – but they won’t be the only ones.
On Tuesday, the Trump administration announced its first batch of duties on imported wood in the neighbourhood of 20 per cent.
Forestry remains an important industry in northern Saskatchewan, where it is a key economic driver.
“We export about $550-million worth of forest products, largely into the United States,” said Chris Dekker, president and CEO of Saskatchewan Trade Export Partnership.
“Any trade barrier to what we produce and export abroad is going to be concerning, not only to the economy, but to the industry itself.”
The new tariffs come during a positive period for the Saskatchewan forestry industry. Dekker called it a “bright spot,” noting an “upsurge of late” at a time when other parts of the provincial economy have faltered.
“There’s about 13,000 direct and indirect jobs across the industry and our sales, exports in that industry have been climbing, counter to other exports where commodity prices have been decreasing,” he said.
But Dekker also pointed out only a minority portion of Saskatchewan’s annual forest product exports to the U.S. are in softwood lumber.
“There’s a lot of pulp and a lot of oriented strand board. Only about $84 million of exports is in the softwood lumber area,” he said.
Over the short term, Dekker doesn’t expect these new tariffs to have a serious impact in this province. As for the long term, he’s waiting to see.
“They have announced that this new duty is as a result of an investigation that has been ongoing. Now, there is a second and parallel anti-dumping investigation that is also going on,” he said.
“That could come out this summer and the duty rate that could apply as a result of that investigation could be established in the fall.”
The Canadian government condemned Tuesday’s announcement. In a statement, the federal government called the move unfair, baseless, unfounded and it promised help for its industry.
Natural Resources Minister Jim Carr said the action hurts people in both countries — not only Canada’s lumber sector that employs hundreds of thousands, but also American home-buyers, who must now pay more for wood.
The buildup to this new lumber war began with the 2015 expiry of a decade-old agreement. It stems from a fundamental, long-standing dispute over whether Canadian companies’ access to public land constitutes a subsidy.
Duties will be collected retroactively, too — the U.S. says it will gather them for the previous 90 days. Industry analysts have been expecting the combined duties — Monday’s and the upcoming ones — to range between 30 and 40 per cent.
Carrier Forest Products, a medium-sized company operating in Saskatchewan, will be among those forced to pay retroactive duties.
According to the company, it will cost Carrier millions of dollars and could mean job losses.
Serial lumber litigation is a game of ‘heads I win, tails you lose’ for the U.S.
OTTAWA — The Globe and Mail
Published Tuesday, Apr. 25, 2017 5:03PM EDT
Last updated Tuesday, Apr. 25, 2017 5:06PM EDT
It is easy to figure out how U.S. tariffs on Canadian lumber will affect Americans.
It’s going to make U.S. homes, renovations and furniture more expensive. Even before Monday’s move by the Trump administration to hit Canada with a preliminary 20-per-cent duty, the price of lumber was rising in anticipation of the looming dispute. Lumber is up 22 per cent since January, adding roughly $3,600 (U.S.) to the price of a typical new home, according to the U.S. National Association of Home Builders.
A sustained price hike of this magnitude will put the dream of home ownership out of reach for nearly half a million Americans.
The United States can’t just produce more lumber. The country has traditionally relied on imports for roughly a third of its lumber needs – and virtually all of it comes from Canada. The math is pretty simple: Tax Canadian lumber, or restrict imports though a quota, and the price of lumber goes up.
Unfortunately, none of this matters. If this dispute was about the cost of a home, Canada would not be facing its fifth lumber trade war since the 1980s.
Canadian officials love to trot out U.S. home builder statistics to demonstrate how Americans are actually hurting themselves when they put a tariff on Canadian lumber.
“This decision will negatively affect workers on both sides of the border and will ultimately increase costs for American families who want to build or renovate homes,” Natural Resources Minister Jim Carr and Foreign Affairs Minister Chrystia Freeland said in a statement Monday.
These arguments did not win the day in the early 2000s or in any of the earlier showdowns. And they are unlikely to work this time.
Here’s why: The average price of a newly built U.S. home was $388,000 in March. Lumber adds less than $10,000 to the final price. That pales compared to the contribution of land, labour and interest rates to the final price. Lumber is little more than a rounding error in this calculation.
Nor is this a dispute fundamentally about saving U.S. logging and sawmilling jobs – although U.S. President Donald Trump will insist it is. Mr. Trump can “Buy American, Hire American” all he wants, but it won’t create more jobs in the highly automated logging and sawmilling business, and it could costs tens of thousands of U.S. home-building jobs.
The essence of this fight is about the market value of trees. Nearly three-quarters of U.S. forest land is in private hands in the United States. In Canada, just 10 per cent is, with the rest owned by governments.
There are more than 10 million small woodlot owners in the United States. A much smaller clutch of a few thousand very large forest owners are the driving force behind the U.S. Lumber Coalition, which launched this and earlier trade cases.
They have one motivation: increase the value of timber, which has become a phenomenal store of value in a world of slim investment yields.
Taxing Canadian lumber is an easy way to make that happen. Win or lose a trade case and it still pushes up the price of lumber, and more importantly, stumpage rates.
The economics made another trade case against Canada inevitable, in spite of previous lost rounds of litigation. The final duties applied on Canadian lumber are likely to be in the ballpark of the combined 27-per-cent anti-dumping and countervailing duty applied in the early 2000s.
Nothing has really changed in the intervening years. Canadian provinces still set the price of most harvestable trees. If anything, Canadian stumpage rates are more reflective of market prices than before and that should reduce the level of alleged subsidies.
What hasn’t changed is that litigation is a relatively cheap way to push up the value of U.S. lumber, trees and land.
For the U.S. industry, a loss hardly matters because lumber prices stay artificially high while the case plods along.
And if the U.S. Lumber Coalition is really lucky, Canada will eventually cave and agree to cap its exports. That also does the trick because squeezing supply inflates the value of U.S. trees, transferring wealth from U.S. consumers and Canadians to U.S. woodlot owners.
Tails I win. Heads you lose.
U of S looks at health of mine workers
ANDREA HILL, SASKATOON STARPHOENIX
Published on: April 22, 2017 | Last Updated: April 22, 2017 7:00 AM CST
Cameco Corp.’s McArthur River uranium mine in northern Saskatchewan is pictured in this undated handout photo. CAMECO CORPORATION / SASKATOON
Saskatoon researchers are looking at how the health of people working in Saskatchewan’s mining industry stacks up against other workers.
Lorna Butler, a University of Saskatchewan nursing professor, said she became interested in the subject after the Conference Board of Canada published a report in 2013 that showed work lost because of illness cost the Canadian economy an estimated $16.6 billion in 2012.
Saskatchewan fared worse than the country as a whole, with an average absenteeism rate of 11 days per full-time employee in 2011 compared to the national rate of nine days.
“We asked the question: What does that look like in the mining industry? And interestingly, they didn’t know,” Butler said.
While mining industries pay a lot of attention to health as it refers to injury prevention on the job and other occupational health and safety matters, they spend less time thinking about the overall health of workers, Butler said. However, it’s probably something they should consider; if workers living at isolated mining camps have poor health, they could lose work days due to illness, which would hurt the companies that need their productivity.
“Some companies invest a lot in trying to make sure that they have a good environment for their workers, but how do we get it right? Do we know what the workers really want? Do we know what the issues really are? It may be as simple as someone who’s really homesick, who’s never been away, and so they’re ill based on just the isolation. We don’t know those kinds of things, so we don’t know the impact,” Butler said.
“The mines probably have a lot of rich data that they don’t even realize that they have because they haven’t looked at it that way.”
Researchers will spend the year looking at data provided by Cameco, the Mosaic Company, PotashCorp and K+S Potash Canada to figure out what the absenteeism rate is for people in the mining industry and how it compares to the rest of the country. They will also look at what health promotion programs are in place at various mine sites to see which ones, if any, appear to be contributing to better worker health.
“We want to be able to share within a mine and across mines and across types of mines — is uranium different than potash or are health issues health issues, not mine specific?” Butler said.
Potash producer Belaruskali to make new kind of fertilizer — report
April 14, 2017
While potash prices have been fairly stable this year, they remain weak and could stay this way for years due to a current oversupply likely to get worse with the planned opening of new mines.(Image courtesy of Belarusian Potash Company (BPC), the trading division of Belaruskali )
Belarus’ state-owned fertilizer group Belaruskali plans to make a new kind of crops nutrient in partnership with Chinese companies in an effort to diversify its portfolio.
According to Belaruskali’s director general, Ivan Golovaty, the company is also mulling a number of investment options involving a Chinese chemical company, the country’s news agency Belta reported.
Those projects include the formation of a new firm focused on the making of fertilizers by using Chinese technologies, the article said.
Potash prices, while relatively stable so far this year, remain weak due to oversupply, declining farm incomes and weak demand from India and China.
More competition, either in terms of new fertilizers or more mines, is not exactly what the potash market needs these days. Global prices, while relatively stable so far this year, remain weak due to oversupply, declining farm incomes and weak demand from India and China.
Those factors haven’t stopped companies for moving ahead with plans to open new mines. German K+S AG (FRA:SDF) is expected to open its Legacy project in Saskatchewan, Canada, before the end of the second quarter this year, while the Garlyk mining and processing factory in Turkmenistan began operations last month.
Russia’s EuroChem, in turn, is building two mines in Russia, and Sirius Minerals (LON:SXX) is moving ahead with construction of its vast mine beneath a U.K. national park. The York project is set to start producing in 2018, initially generating 10 million tonnes per year of polyhalite – a form of potash that is used in plant fertilizers –, before it enters a second phase that will double that production to 20 million tonnes a year.
Wall insists cities use ‘small’ portion of reserves; Regina has approximately $236M, Saskatoon has $141M
Sask. premier insists cities use reserve funds to account for budget shortfalls
Wall insists cities use ‘small’ portion of reserves; Regina has approximately $236M, Saskatoon has $141M
CBC News Posted: Apr 12, 2017 6:00 AM CT Last Updated: Apr 12, 2017 6:00 AM CT
Premier Brad Wall says Regina and Saskatoon should dip into reserve funds to address budget shortfalls. (Mike Zartler/CBC)
Saskatoon city manager Murray Totland has likened dipping into municipal reserves to cover a funding shortfall to dipping into an RRSP to buy groceries.
But Premier Brad Wall disagrees.
Speaking to reporters after question period on Tuesday, Wall suggested the cities dip into their reserves to help cover their budget shortfalls — an idea that’s already been rejected by both cities.
Regina and Saskatoon are dealing with multi-million dollar funding crunches due to the province scrapping its grants-in-lieu program. Regina is facing a $10.3 million budget deficit, while Saskatoon is facing a $9 million shortfall.
The grants-in-lieu program, which was cut in the most recent provincial budget, saw the Crown corporations SaskPower and SaskEnergy transfer payments to municipalities.
The premier cited municipal budget documents, and the wording used to describe funding reserves, to bolster his argument on Tuesday.
“It talks about operating deficits,” Wall added.
Regina currently has $236 million in its reserve while Saskatoon has $141 million, according to numbers provided by the provincial government.
“The bottom line is [the two cities] are very healthy right now,” Wall said.
The premier also referenced comments made by Regina Mayor Michael Fougere in 2003 when he was a councillor, in which Wall claims Fougere suggested using reserve funding to mitigate a tax hike.
He also noted reserve funding in Saskatoon and Regina has more than doubled since 2007, in part due to revenue sharing.
Regina received $15.7 million in revenue sharing that year, while they’ll receive $40.5 million this year. Saskatoon received $17.8 million in 2007 and is in line to receive $46 million in revenue sharing this year.
“There is no reason the two cities cannot absorb this grant-in-lieu increase without taxes by controlling spending and using a small portion of their reserves,” a government spokesperson said in an email.
2,000 JOBS CREATED IN MARCH
Released on April 7, 2017
There were 2,000 jobs created in March 2017 in Saskatchewan when compared with March 2016.
“Saskatchewan’s economy is strong and resilient and the job numbers today are an encouraging sign,” Economy Minister Jeremy Harrison said. “March was the second consecutive month with year-over-year job creation. This news combined with recent announcements including Brandt Manufacturing’s expansion to Saskatoon, G3’s new grain elevators, and Grain Millers expanding its plant in Yorkton, are signs that our economy is moving forward.”
The seasonally adjusted unemployment rate was 6.0 per cent in March, third lowest among the provinces, unchanged from February and down 0.2 percentage points from last March. Nationally, the unemployment rate was 6.7 per cent.
Other March 2017 highlights include:
- Major year-over-year gains were reported for trade up 6,900; professional, scientific and technical services up 6,000; manufacturing up 3,700.
- Full-time employment was up 6,000 while part-time employment decreased 4,100.
- Regina’s employment was up 4,300 and Saskatoon was up 1,100.
- Off-reserve Aboriginal employment was up 4,100 (9.4 per cent) for nine consecutive months of year-over-year increases.
- Youth unemployment rate was 10.8 per cent (seasonally adjusted), third lowest among the provinces and below the national rate of 12.8 per cent.
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Saskatchewan, people and businesses are continuing to show signs of confidence in the diversified economy you have built.
Residential and non-residential building permits are up significantly in our province, even as national numbers have declined.
The 2017 Saskatchewan Mining Supply Chain Forum was a huge success. In a time where other resource shows are shrinking dramatically, ours grew!
See also HERE
Top 50 biggest mining companies
LIST AT BOTTOM OF STORY
April 3, 2017
MINING.com and sister company IntelligenceMine‘s ranking of the world’s 50 largest mining companies based on market value continues to show an industry in recovery.
At the end of the first quarter this year the top 50 companies had a combined worth of $842 billion. In total these companies’ added $258 billion in market capitalization over the past 12 months and a good fifth of those gains occurred in 2017.
Another indication of how the rising tide of commodity prices lifted all boats is the fact that the cut-off today to make the ranking is $5 billion (number 51 Kumba Iron Ore has a market worth of $4.96 billion). A year ago it was less than $4 billion.
Changing fortunes in subsectors saw the ranking change noticeably lower down the field. A year ago when gold was still enjoying one of its best starts in decades, gold miners were riding high, but well-known names like AngloGold Ashanti and Kinross no longer make the grade. That said, world number one gold company Barrick managed to improve its ranking.
In contrast, coal and iron ore players bunched up near the bottom at the beginning of the second quarter 2016 when most steelmaking raw materials prices were hitting multi-year lows significantly improved their rankings. Australia’s Fortescue has shot up 20 places while Canada’s Teck managed to climb 26 spots.
As with any ranking, criteria for inclusion is a contentious issue. We decided to exclude unlisted and state-owned enterprises at the outset due to a lack of information. That of course excludes giants like Chile’s Codelco, Uzbekistan’s Navoi Mining which owns the world’s largest gold mine, Eurochem, a major potash firm, trader Trafigura, top uranium producer Kazatomprom and numerous entities in China and developing countries around the world.
Another central criterion was the depth of involvement in the industry before an enterprise can rightfully be called a mining company.
For instance, should smelter companies or commodity traders that own minority stakes in mining assets be included, especially if these investments have no operational component or not even warrant a seat on the board?
This is a common structure in Asia and excluding these types of companies removed well-known names like Japan’s Marubeni and Mitsui, Korea Zinc and Chile’s Copec.
Levels of operational involvement and size of shareholding was another central consideration. Do streaming and royalty companies that receive metals from mining operations without shareholding qualify or is are they just specialized financing vehicles? We included Franco Nevada and Silver Wheaton.
What about diversified companies such as BHP Billiton or Teck with substantial oil and gas assets? Or oil sands companies that use conventional mining methods to extract bitumen for that matter?
Or vertically integrated concerns like Alcoa and number three on the list Shenhua Energy which is a power and shipping company more than a coal miner.
Chemical companies are also problematic – should FMC Corp not be ranked because its potash and lithium operations are such a small part of its overall revenues and what about Albermarle? While the merger of Potash Corp and Agrium is still to close we included only Potash Corp on this listing.
Many steelmakers own and often operate iron ore and other metal mines, but in the interest of balance and diversity we excluded the steel industry, and with that many companies that have substantial mining assets including giants like ArcelorMittal, Magnitogorsk, Ternium, Baosteel and many others.
Let us know of any omissions, deletions or additions to the ranking or suggest a different methodology.