Alberta is trying to support its slumping forestry sector without sparking a trade battle with the United States and without having to dig too deeply into its cash-strapped coffers.
A report by the province paints a grim picture of plant closures as companies face unprecedented financial challenges and continue to lose money because of the economic downturn.
Part of the problem is that the forestry companies in Alberta are operating under outdated rules that must be overhauled, the report says.
“The ‘Alberta Advantage’ that originally attracted and retained forest industry investment has since eroded,” says the competitiveness report, which was completed eight months ago but just released Thursday.
The government has accepted most of the report’s recommendations, including making it easier to transfer timber rights and allowing companies to sell wood to coal-fired power plants for fuel.
Calls by the industry for the province to reduce its municipal tax burden and electrical power costs are under review.
Ted Morton, minister of sustainable resource development, said the province is limited in what it can do to help the industry.
“The six recommendations that we did not accept we rejected either because they would have violated the softwood lumber agreement . . . or because of lack of funds.”