Welcome 2018

Greetings to our CWPCA members, and Happy 2018!

Reflecting back on 2017, it was a big year for both the CWPCA and the Wood Packaging Industry.  The biggest story of the year bar none went to the Softwood Lumber negotiations with the USA and its impact on the lumber markets.  While the dust has yet to completely settle around this issue, one thing is for sure, the legacy of the impact to the lumber markets looks to be lengthy. The current situation can be quite simply assessed like this:

• Softwood markets remain strong and inventories remain low. 
• Eastern hardwood and aspen markets face a similar situation.
• Cut stock exports to the USA remain brisk
• While there seems to be no end in sight to the strong lumber markets, there is a positive theme that I am hearing from both Canadian and US manufacturers.  That is that lumber prices are driving higher sell prices on finished goods, and there is less undercutting of the market as a result.  The common hope is that once the lumber markets level off (which invariably they will do at some point) there will be a time frame where profit margins will be increased as the higher sell prices on goods will be maintained through the anticipated decline in raw material pricing. 

The CWPCA, in its participation with other affected industry groups and the Government of Canada (GoC) in the negotiations, managed a small but important victory in keeping fully assembled wood packaging exempt from duties.  However, the war is still being waged where pallet kits (unassembled packaging) are concerned and our Trade Advisory Committee should be thanked for springing into action and guiding the CWPCA through a very interesting process.

Last year, the CWPCA was able to secure another three-year term with the CFIA as a service provider for the HT Program.  This is good news as it ensures that we can maintain our mandate to provide low cost services to wood packaging manufacturers in ALL regions of the country.  The contract also ensures that the voice of the wood packaging industry is represented on government committees, the Canadian Forest Products Advisory Committee (CFPAC) and the Canadian Forest Phytosanitary Working Group, for which we will be participating in meetings early this year.  Involvement in these committees ensures that issues specific to the wood packaging industry are not only heard, but understood by the GoC and other sectors of the Canadian wood products industry.

For more details of the past year, we will provide our annual report in the coming months which will include more highlights from 2017, as well as some interesting statistics gathered in our recent production survey.

Looking forward, there are many reasons to believe that 2018 will not be without some other challenges to our members:

• New Provincial legislation in Ontario will impart higher operating costs on business by way of higher minimum wages, and more employee benefits. 
• Federal EI premiums will rise marginally, and several provincial workplace insurance boards are making changes to rate group structures. 
• Those in Alberta, Quebec and Prince Edward Island are all expected to face minimum wage increases later in the year, while those in New Brunswick will see the addition of another statutory holiday as the Province will now observe Family Day in February. 
• An overall federal business tax rate cut of 0.5% along with some provincial tax cuts and small business income threshold adjustments will help to offset some of these costs, but we will have to wait and see how the changes will affect our industry in the long term, both regionally and as a whole. 

In light of the challenges, however there appears to be much optimism and indication that demand for our products will remain strong.  Reports from across Canada indicate that the appetite for wood packaging is large. In many conversations, I hear phrases like “too busy”, “coming off our best December ever”, and “cannot even take on any new accounts”. 

2017 saw an ever-increasing level of investment by manufacturers in new technology and automation and it is anticipated that this trend will continue.  Having seen numerous production equipment installations over the past year it is evident that the manufacturing equipment suppliers are really upping their game and integrating some absolutely awesome technology into their products.  I encourage all of the wood packaging manufacturers out there to have a look at some of the new and exciting technology that exists in the market today. 

As the CWPCA moves into 2018, we look forward to our continued and growing partnership with the NWPCA and WPA, and our joint initiatives.  Nature’s Packaging will continue to evolve, and work will continue in the development of a North American Environmental Product Declaration (EPD) for wood pallets to promote and validate the sustainable nature of our industry. 

We are also very pleased to play the role of co-host with the NWPCA for Interpal 2018, which will be held in Minneapolis, September 18-20.  Interpal will feature not only the CWPCA AGM, but participants will be treated to plant tours, educational sessions, and a chance to network with wood packaging professionals from around the globe.  This will be THE can’t miss event of 2018, and although registration is not yet open, we advise all of our members to register quickly when it does as Interpal will sell out.  We look forward to a large representation by CWPCA members.

My best wishes to you all for a Healthy, Happy, and Prosperous 2018.