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2010/08 (b)

Backgrounder

Federal Assistance for Canada’s Forest Sector and Communities


Through the Government of Canada’s Economic Action Plan (EAP), unprecedented steps are being taken to support forest workers and forest-dependent communities while securing a sustainable forest sector for the future.

Factors such as weak product end-markets and increased competition from offshore producers have created severe competitive pressures on Canada’s forest industry. The global economic downturn and the resulting tightening of credit markets have compounded these challenges. However, ongoing products and technologies are creating new possibilities for Canada’s forest communities.

Canada’s Economic Action Plan includes a number of measures that address the challenges facing our forest sector and the workers and communities that depend on it. These include:

  • $1 billion, over two years, for a Community Adjustment Fund to help mitigate the short-term impacts of restructuring in resource-dependent communities;
  • $170 million, over two years, to help companies develop new products and processes and capitalize on new market opportunities, including:
    • $120 million to support the development of breakthrough technologies and develop pilot-scale demonstration projects for use in commercial applications; and,
    • $50 million to expand domestic and international markets for Canadian forest products and to support large-scale demonstrations of the use of Canadian wood in construction domestically and internationally.
  • An extension to 2011 of the Accelerated Capital Cost Allowance (ACCA) to provide an incentive for companies to make new investments in machinery and equipment;
  • A proposal to permanently eliminate tariffs on a range of machinery and equipment to help lower costs for Canadian producers in a number of sectors, including forest and energy. This measure is expected to save the Canadian industry more than $440 million over the next five years;
  • Enhancing the capacity of Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) to improve access to credit on commercial terms. Included is $5 billion in new financing to be delivered under the new Business Credit Availability Program;
  • The Canada Skills and Transition Strategy, which helps workers directly affected by the economic downturn through:
    • Enhancements to the Employment Insurance (EI) program, including providing five extra weeks of EI regular benefits nationally and increasing the maximum duration of benefits from 45 to 50 weeks in regions of high unemployment;
    • The Career Transition Assistance Initiative, providing extended EI income support for long-tenured workers participating in longer-term training. The initiative also allows earlier access to EI regular benefits for long-tenured workers who use some or all their severance package to invest in skills upgrading or training;
    • An additional transfer of $1 billion, over two years, to provinces and territories to help them deliver skills and employment training for up to 100,000 unemployed workers who qualify for EI benefits;
    • $500 million, over two years, in a new Strategic Training and Transition Fund to support workers facing training and adjustment needs, whether or not they qualify for EI; and,
    • Increased funding for the Targeted Initiative for Older Workers of $60 million over three years to help more older workers get the specialized support they need while they transition to new jobs, helping up to an additional 250 communities across Canada;
    • In addition to actions taken under the Economic Action Plan, the Government is temporarily providing additional EI regular benefits to unemployed long-tenured workers. Long-tenured workers are individuals who have worked and paid EI premiums for a significant period of time and have previously made limited use of EI regular benefits. The legislation provides from five to 20 weeks of additional benefits (in addition to the extra five weeks), depending on how long an eligible individual has been working and paying into the EI program
    • EI beneficiaries whose claim is established between January 4, 2009, and September 11, 2010, and who meet the eligibility criteria for this measure have their benefit entitlement automatically adjusted. Approximately 190,000 Canadians will receive this extra support.

Media may contact:

Margaux Stastny
Director of Communications
Office of the Minister
Natural Resources Canada
Ottawa
613-996-2007

or

Media Relations
Natural Resources Canada
Ottawa
613-992-4447

NRCan's news releases and backgrounders are available at www.nrcan.gc.ca/media/index-eng.php.