Even though forest practices on the ground have scarcely changed at all under the Forest Practices Code, and there have been no court convictions for Code infractions, the B.C. forest industry's spin-doctors have recently been claiming in the local press that the Code is costing logging companies anywhere from $600 million to $2 billion per year.
One such study that has gotten wide press is a dubious report by University of B.C. forest economist David Haley. Haley says the Code is costing $2 billion a year -- $600 million per year in increased on-the-ground logging costs between 1992 and 1995, and another $1.4 billion in lost revenues per year because of lower volumes of wood being cut due to Code restrictions.57 Given that the Code did not become law until June 15, 1995, Haley's first assumption about logging costs between 1992 and 1995 is obviously deeply flawed, as the increase in costs occurred prior to the implementation of the Code. Those increases are the result of logging companies' decades of "high-grading" -- taking the closest and most easily accessible trees in the valleys. Now they are forced by their own cut-and-run practices to travel further into remote areas to get the wood from less accessible locations -- which raises their costs considerably.
Haley's second assumption of $1.4 billion in lost revenues per year because of a reduced cut under the Code is equally flawed. As our report shows, the volume of trees cut in 1996 on public land is virtually unchanged from 1995 and 1994 (when the industry earned record profits). As well, the projected AAC to the year 2000 for 71 Timber Supply Areas and Tree Farm Licences has been reduced by less than 1% -- hardly the equivalent of an annual $1.4 billion loss to the industry.
Other similar "costly Code" claims are coming from the industry lobby Council of Forest Industries, and chartered accountant Price Waterhouse --the latter hired by the B.C. Forest Alliance to assess the projected costs of the Code and legislated forestry reforms.58 Those claims, too, are based on flawed assumptions, such as that under the Code, the harvest is being reduced by anywhere from 6-16% within five to ten years.59
But this report shows that to the year 2000, the rate of harvest remains essentially unchanged, negating any impacts of the Forests Practices Code. To blame the Code for $2 billion in costs that are actually due to past overcutting and a slump in global pulp prices is merely spin-doctoring: an attempt to scapegoat environmentalists and the (already ineffective) environmental legislation like the Code.
The reality is that the industry's past practices of high-grading and over-cutting are catching up to them.