This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L QUEBEC 000016 
 
SIPDIS 
 
E.O. 12958: DECL:  2/2/2016 
TAGS: ECON PGOV CA
SUBJECT: SOFTWOOD LUMBER: QUEBEC INDUSTRY LOOKING TO NEGOTIATE 
 
CLASSIFIED BY: Abigail Friedman, Consul General, Quebec City, 
State. 
REASON: 1.4 (b), (d) 
 
 
 
¶1. (c) Summary: Quebec Forest Industry Council President Guy 
Chevrette told CG Feb. 1 that Quebec industry is ready to 
negotiate a solution to the softwood lumber dispute, and has 
been so for quite some time.  They have been held back, in his 
view, by British Columbia's lumber industry and by former PM 
Martin's "purely political" interest in not negotiating. 
Chevrette believes the new Harper government will be willing to 
enter into negotiations with the U.S. side, but that the 
minority government may not be in a position to take the first 
step.  A public statement from the U.S. reiterating our desire 
to negotiate a solution and a willingness to entertain 
"asymmetric solutions if needed" (i.e., different solutions for 
different provinces) may help break the impasse, says Chevrette. 
 End summary. 
 
¶2. (c) CG sounded out Guy Chevrette, President of the Quebec 
Council on Forestry, Feb. 1, on the prognosis for a return to 
the negotiating table on softwood lumber.  Chevrette said that 
the Quebec softwood lumber industry is small compared to British 
Columbia's and that the money that is now in escrow is sorely 
needed in Quebec to allow for investment in equipment.  (Of the 
roughly 5 billion dollars now frozen, Chevrette estimated that 
about 1.2 billion is derived from Quebec industry.)  He 
indicated that Quebec's lumber industry is more than ready to 
negotiate and that Quebec would accept a limit on volume.  A 
return to the 2004 volume would be acceptable for Quebec 
industry, he said. 
 
¶3. (c) Chevrette considers British Columbia's lumber industry to 
be the obstacle to a return to negotiations.  Quebec and Ontario 
have similar softwood lumber profiles, both in terms of the 
financial stakes, and in what would constitute an acceptable 
agreement.  Both would favor some form of restriction on the 
volume of exports, he said.  BC industry, on the other hand, has 
a market strategy that is based purely on pushing volume trade. 
(A chart comparing BC and Quebec exports of softwood lumber to 
the U.S., shows Quebec exports at only about one third of BC's. 
While Quebec exports are declining, BC's has soared since 2000.) 
 
¶4. (c) Given the difference between the volume-based approach of 
BC and the approaches of Ontario and Quebec, Chevrette proposes 
an "asymmetric" solution to the softwood lumber dispute.  Quebec 
is willing to accept a limitation on volume, but this would be 
unacceptable to B.C.  Inversely, B.C. would accept a tax, but 
this would kill Quebec's industry.  Chevrette mused that a 
"volume" solution might work if it were province by province. 
 
¶5. (c) Chevrette expressed optimism that the timing is 
propitious for a reopening of negotiations.  In his view, even 
the B.C. government is ready to return to the negotiating table. 
 As for the Harper government, Chevrette believed that the 
Conservatives want a renewed dialogue with the U.S. in general, 
and a solution to the softwood lumber dispute in particular. 
This cocktail of interests suggests to him a rather quick 
reentry into negotiations.  PM Martin, he felt, put the brakes 
on negotiations for purely political motives, i.e., to boost 
anti-Americanism and popular support for his government.  The 
challenge for the Conservatives is that there is no consensus on 
a softwood lumber negotiating strategy within Canada and that 
they are leading a minority government.  Chevrette continued by 
saying that this simply means that the new government might have 
difficulty making the opening move. Chevrette considers the 
recent U.S. reduction of tariff rates as a signal that the U.S. 
is ready to negotiate.  Chevrette believes that if the U.S. and 
Canadian governments announce a restart of negotiations, this 
will pressure B.C. industry to the table.  The next step is for 
the U.S. to announce that it can accept an "asymmetric Canadian 
position, if needed." Chevrette believes this would force the 
disparate Canadian elements to work seriously toward a 
negotiated solution. 
 
FRIEDMAN