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VANCOUVER, B.C. /Troy Media/ â€“ Constructing an industryÂ without all the necessary supplies can lead to fiscal imbalance. Welcome to the post-truth world of economics.
Facts areÂ hard and certain, true and real â€“ as opposed to opinions, beliefs or stories. Alternative facts, contradicting old-fashioned facts, are what we used to call lies. And in the midst ofÂ this new post-truth reality, we must also deal with partial truths.
The oath of witnesses in court binds them to tell the truth, the whole truth and nothing but the truth, because an incomplete truth can lead to very unfairÂ consequences.
However, in a world where time is scarce, attention spans are short and news is delivered in tweets, very few people make the effort to see the whole picture.
One person who does is Vaclav Smil, professor emeritus of University of Manitoba and versed in engineering, math and many of the social sciences. His work shows that getting at the whole truth takes some doing but it’s important.
Take, forÂ example, the idea of eating locally. Environmentalists rightly point out that eating locally saves the energy costs of transporting food from far away. But that’s only part of the truth. They often don’t mention that producingÂ vegetables in CanadaÂ year-round requires heating greenhouses for months.
The lack of a softwood lumber agreement between Canada andÂ the United States illuminates another partial truth.
Lumber sales affect the heart, soul and pocketbook of many Canadians. Most ofÂ British Columbia’sÂ income from wood is the result ofÂ exports to the States, for example.
The lack of a replacement for the agreementÂ that expired over a year ago leaves B.C. producers subject to punishing duties and reduced sales.
Unfortunately, current American policy related to lumber duties is framed byÂ partial truth.
Slapping expensive dutiesÂ onÂ imported Canadian lumber increases employment in the U.S. lumber industry and improves its profits. The American lumber lobby makes sure itsÂ government knowsÂ this.
But this is only part of the picture, according toÂ research fromÂ Naomi Christensen of the Canada West Foundation.
The U.S. imports Canadian lumber not just becauseÂ it’s cheap. The American lumber industry can’t produce enough to meet itsÂ country’sÂ needs. So by blocking Canadian lumber,Â the U.S. industry can inflate the prices for their scarce production. This hurts American consumers, andÂ reduces construction and other related jobs.
The National Association of Home Builders (NAHB) is working to present theÂ full story. This American organization points out that the 25Â per cent duty proposed forÂ Canadian imports would reduce lumberÂ supply and increase the price of new homes.Â The NAHB estimates that every $1,000 added to the price of a new home puts itÂ out of reach for anotherÂ 150,000 Americans.
And as many asÂ 8,000 jobs will disappearÂ in construction and related sectors. That means aboutÂ $450 million inÂ wages won’t be paid. The impact on the American economy would beÂ significant â€“Â a depressed housing industry would diminishÂ overall economic growth, running counter to U.S. government targets.
It’s vitally important that all the facts about the impact of duties on lumber reach American decision-makers. Too often, only the words of the U.S. lumber lobby reaches their ears. Hopefully,Â the NAHB can makeÂ its findings heard and other lumber users similarlyÂ find a voice. Unions whose membersâ€™ jobs will be affected should also speak out.
Canadian negotiators in government and the lumber sector must gather all the facts on the impact of lumber duties, especially those that will hurt the fellow citizens of the American negotiatorsÂ across the table from them.
Otherwise, the voices of the U.S. lumber interests â€“ andÂ their partial truths â€“ will be the only ones heard.
The economies of Canada in general and B.C. in particular will be hurt.
And the unemployed U.S.Â construction worker who can no longer afford a house will think that American border barriers are keeping America great, never realizing how badly he has been hurt.
Troy Media columnist Roslyn Kunin is a consulting economist andÂ speaker. Roslyn is included in Troy Mediaâ€™s Unlimited Access subscription plan.
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