Final Cut: B.C. industry at a crossroads
By James Gorman
June 16, 2015 - As anyone reading this will know, the forest industry remains a key driver of the economy in Canada. In B.C. alone, 150,000 people derive at least part of their income from the industry.
By James Gorman
Now, 150,000 may not seem like a big number in a city the size of Vancouver or Toronto. But in a place such as Williams Lake, where two in seven people are employed directly in the forest
industry, it means a lot. But I didn’t have to tell you that. You already know the industry is important to the economic well-being of our provinces and our country.
In B.C., forestry contributes $12 billion to provincial GDP and a combined $2.4 billion in revenues flow from our industry to the three levels of government in the form of taxes and other fees.
At a more local level, forest companies provide jobs to individuals across B.C. (40 per cent of B.C. communities are dependent on forestry). We provide the largest number of manufacturing jobs of any industry in the province, and businesses of all kinds rely on people working in our industry to purchase their goods and services.
In other words, a modern, healthy B.C. forest industry supports the stability of our homes and communities.
The B.C. industry is among the most efficient in the world, and it has a reputation for making high-quality products in an environmentally sustainable way. Not only do we produce lumber and innovative, high-value goods, we also use residuals from the forests to generate energy, pulp and paper and wood pellets.
We’re dedicated to continuing to find new ways to make the most of our forest resources. And we do it all with an eye on sustainability that is unparalleled in the world.
B.C. plants 200 million trees a year and our forests capture two billion tonnes of carbon annually. The province has more forested land covered by third party certification than any other country in the world – that’s something to be proud of.
But the world is changing. New challenges are emerging that threaten the competitiveness of the B.C. industry.
The interior of the province has just come through the largest timber salvage operation in British Columbia’s history as a result of the Mountain Pine Beetle infestation. Management and mitigation of the disaster by government and industry has been a significant success – we should not lose sight of that fact. However, the salvage operation is nearing its conclusion and the allowable annual cut will necessarily decline in the future. Timber supply will be impacted for decades to come and milling capacity will have to adjust.
Throw in the expiration of the Softwood Lumber Agreement in October, multiple points of environmental uncertainty on the land base, recent Supreme Court rulings on First Nations title and other pressures that have driven costs sharply upward relative to other lumber-producing regions in North America, and the threats to our industry and our communities are obvious.
However, we believe B.C.’s forest industry will maintain its position as the backbone of B.C.’s economy, with more investment in remaining mills, improved competitiveness and high levels of family-supporting jobs for generations to come.
What we need to focus on is streamlining the regulatory environment; ensuring the provincial timber sales program fulfills its mandate; creating a more competitive tax and fee environment; and priming the pump on established and emerging markets overseas.
By continuing to innovate and diversify products, pursuing new partnerships with First Nations and working closely with the provincial government to open markets and ensure policy helps bolster the competitiveness of the industry, we can continue to be recognized as world leaders in our sector.
James Gorman is the former president and CEO of the Council of Forest Industries, the largest forest industry trade association in Canada, and the current vice-president of corporate and government relations at West Fraser. He is also the president of the BC Lumber Trade Council.