............THE FOREST






‘Contractor Dilemma’

I t wasn’t always this way – but is it possible we are returning to some of the big company – small company problems of the long departed 1930s? Surely not – but let’s have a look – just for the record.
....On June 15, 1982, the forest industry in B.C. – as represented by those firms signatory to the master agreement between the International Woodworkers of America and the majority of forest companies in B.C. entered the second year of a two-year labor contract.
....This contract called for an increase of approximately 11 per cent. Meetings were held prior to the deadline at which the companies – through their negotiators, asked the IWA to roll back the increase. The Union said no.
So an increase of 11 percent was added to all company payrolls who were party to the agreement.
....At the same time, it was recognized that the cost of equipment, goods, and living, had risen from the year previous by at least four percent, for a total in-crease of about 15 percent in the year between June 15, 1981 and June 15, 1982.
....In addition, the interest rate on capital outlays for plant and machinery became staggering for those caught in the unhappy circumstance of not reading the future correctly. And few could read that future – for we had all experienced years and years of growth with only minor recessions to mar a few short spells. But this one was to be different.
....For as long as I can remember, dis-cussions or negotiations or reviews have occurred on the – contractor clause. Well, let’s say not as long as I can remember, but for 30-odd years anyway. I have gone with, and headed delegations to legislative forest com-mittees in Victoria and Vancouver on many occasions to discuss the elusive contractor clause. I am sure that good, intelligent committees are still discussing this clause in the various Tree Farm tenures and still are not coming up with an iron-clad style of contract between big company and the


contractor. I don’t think they ever will – and I hope they never do!
.... All the terms of reference can be worked out in such a contract, except one. ‘How long,’ can be defined. ‘How to do it,’ can be stated. ‘Who’s to do it,’ is easy. But ‘how much’ is in the hands of two individuals. To regulate a fixed price, destroys the initiative that the contract logger has spent decades honing.
....When the IWA refused the request of the negotiators to roll back the 11 percent increase on June 15, 1982, the large companies had to turn to other cost-cutting areas. One of those was the price of logs paid to their logging contractors. Here no legislation secures the position of a contractor, or the price he receives for his production.
....While Tree Farm License tenures call for so much percentage of the cut being performed by contract loggers – the guidelines of how much is paid for the production has never been outlined. As I said earlier, I hope it never is.
....The price negotiations between tenure holder and contractor are generally a once-a-year discussion, based on the contractor’s costs of operation with allowable profit. Just how the negotiation proceeds each year is dependent on the trust the two parties have in each other and the maturity they display in arriving at a fair and proper price. There are other systems of negotiation, but unless the trust is there, eventually one party or the other gets what is commonly known as the dull end of the stick.
....One of the costs the contractor is unable to do anything about is the negotiated increase in wages as settled by the International Woodworkers of Americas. This figure is always used and passed on to the contractor/tenure holder negotiations as a starting basis for their yearly log price.
....Not so last year. The large com-panies after the IWA contract was honored on June 15, decided on policies that, in some cases left the contractor to pay the IWA increase himself out of his costs. Some tenure holders paid a partial amount and I believe the odd one nearly covered the entire increase of IWA plus the added

inflation cost of machinery, cost of living, etc.
....I have talked to a good many cont-ractors and am surprised that so little has been discussed or written openly about this vital concern of contractors. The subject was felt that serious by Tom Waterland, Minister of Forests, that he wrote to each of the leaders of the tenure holding companies and told them that the contracting section of the industry was taking an inordinate share of the current difficult times. He went on to outline the obligation that integrated companies have in making sure the contractor negotiations are kept fair. A good many, in fact most, contractors would state that this has not been the case. But not too many are making noises yet. Most contractors have found temporary ways to keep going and they realize that these are difficult times for everyone. But the move was a brutal one by some companies, with no discussion on the matter until after the fact of the June 15 increase.
....I again say that some companies did pay some portion of the increase, but generally it is felt the contractors were left holding the bag.
....Now we are coming to a new set of labor negotiations in B.C. that will cover the entire forest industry in this province. This will be a first. In prior years the negotiating was done in three separate sectors.
....The industry can be sure that con-tractors will be watching and partici-pating in those negotiations with a very keen eye. If the large companies leave the contractors out in the cold again, it is just hard to predict an outcome. Certainly those old scars will show and even possibly, come back to haunt – in time.
....Big isn’t right anymore and of course small is not always beautiful. Common sense is both.
....Like the man said: “How do you spell perpetuity?”

Keep out of the bight,

Bill Moore