Jobs and Trees The Forest Economy in British Columbia

"We don't have to choose between jobs and trees. If our forest industry was managed properly we would have plenty of both."

- Pulp, Paper and Wood Workers of Canada, Jobs, Trees and Us, 1993.

"It's obvious we have to find ways to get more jobs from every tree. Diversification and value-added manufacturing are our best hope for the future."

- David Zirnhelt, Minister of Forests (former Minister of Economic Development quoted in the Vancouver Sun, 1993).

Why the logging industry of B.C. is failing the public:

Canada is the largest exporter of forest products in the world, and British Columbia is responsible for half of that production (1). It is thus commonly believed--and the timber industry does all it can to convince people--that Canadians accrue large benefits from industrial logging. In fact, every year the logging companies make billions of dollars in profit by clearcutting old-growth forests, but the taxpayers are footing the bill. Whether it is for restoration of damaged salmon streams, direct government subsidies, resource giveaways, or the social and financial costs of dislocation due to "cut and run" policies, the people of Canada are actually paying to have their forests destroyed. In B.C., the timber industry enjoys a $2.5 billion per year subsidy (2).

The large B.C. timber corporations are leading many rural communities and the resource base of the province toward collapse even as its importance to B.C.'s economy steadily decreases (3 & 4). An economic transition from clearcutting and over cutting to long-term, ecosystem-based planning must begin now. The government's program Forest Renewal B.C. was a step in the right direction, but does not go far enough, nor fast enough. Substantial change must begin before the timber resource has been reduced to low-value second growth, which will soon be unable to compete in the global market. In effect, in ten years the most valuable timber will be gone, precisely when Brazil, Chile and other countries will be producing pulp and paper at prices that will push the value of B.C.'s second-growth even lower (3).

"If we allow the timber companies to control the future, they will ensure that vibrant rural communities become ghost towns and our ancient forests become an ever-expanding clearcut wasteland". -Tzeporah Berman, Forests Campaigner, Greenpeace.

THE LOGGING INDUSTRY'S ROLE IN THE B.C. ECONOMY

Forestry is no longer a vibrant, growing industry and is a far cry from "the backbone of the B.C. economy", as it once was. Since 1975 the Allowable Annual Cut has increased from under 40 million to cubic metres to nearly double that (5), while forestry's contribution to the provincial GDP has decreased steadily. In fact, all primary industries together (eg. mining, forestry) contribute only 4.7% to provincial employment, the lowest percentage among the eight employment sectors identified by B.C. Stats (6).

Other industries dependent upon the forests are on the increase, although their future growth is threatened by clearcutting and other poor forestry practices (7). There were 223,700 tourism related jobs in BC in 1996, compared to 171,100 in 1985. Tourism in general has increased rapidly, faster than the provincial GDP in the last two years, while forestry's position has contracted. Four sectors of the economy -- the service industry; finance, insurance and real estate; retail and wholesale trade; transportation, storage and communication -- all contribute more to the provincial GDP than forestry. In addition, continued degradation of the environment acts as a disincentive to attracting capital and business to the area (6).

A slight increase in employment levels, around 1200 jobs, has been noted in relation to the Forests Practices Code (1). While the logging industry complains to the public and government about increased costs associated with the Code and also claims the Code is costing jobs, its real intention is to gut it thereby increasing corporate profits through reduced employment levels. Better stewardship of our resources will lead to greater and more valuable employment, not less.

CORPORATE WELFARE

Canada has been called the "Brazil of the North" because of its timber industry. In the province of British Columbia the government has handed out land to the forest industry in the form of Tree Farm Licences and Timber Supply Areas with no public input. Just four groups of companies in a complex web of ownership control 93% of the trees logged in B.C.'s public forests (8).

The trees in those forests include some of the world's most valuable and could fetch prices of tens of thousands of dollars each if available on the open market. Instead, the BC timber industry runs the trees through their mills as quickly as possible, destroying much of the valuable timber. It is then converted to dimensional lumber (eg. 2 by 4's) and pulp in order to keep employment to a minimum and volume to a maximum.

Direct subsidies to the B.C. timber industry amount to $2.5 billion per year(2). And the Government has spent additional millions in free advertising and international lobbying efforts to convince governments and companies that the clearcutting and over cutting of British Columbia is "sustainable forest management". In addition, stumpage fees in B.C. are some of the lowest in the industrial world. Stumpage in the U.S., for example, is more than 5 times what it is in B.C. (3) Costs to the public from damage to salmon runs and mudslides push the public price yet higher. The loss of biodiversity and the reduction in the genetic stock through this unprecedented liquidation have yet to be quantified into dollar amounts.

OREGON'S OWL RECESSION THAT NEVER HAPPENED

Before setting aside large areas of old-growth for the protection of endangered species, notably the spotted owl, Oregon's timber industry claimed there was an impending crash of the Pacific Northwest economy entirely due to conservation (9). A 100,000 jobs were at stake, it was claimed. But the crash never came. Other industries have sprung up quickly to replace logging and the industry itself has changed to accommodate the protection of old-growth. With a similar economic background and resources, B.C. could do the same.

Independent economists and policy analysts agree: "Our natural landscapes no longer generate new jobs and incomes primarily by being warehouses from which loggers ...extract commercial products. In today's world, these landscapes often may generate more new jobs and income by providing the natural-resource amenities -- water and air quality, recreational opportunities, scenic beauty and the fish and wildlife -- that make the Pacific Northwest an attractive place to live, work, and do business" (7). Economists are beginning to recognise what environmentalists have been saying for years -- the resources we are decimating have greater value intact than destroyed.

DOING MORE WITH LESS

B.C.'s record on job creation in the timber industry is one of the worst in the world. Less than one job is created here in B.C. for every 1000 cubic metres of wood cut. The U.S. average per 1000 cubic metres is 3.4, and in California they manage 5.2 (10).

An official B.C. committee estimated that value-added processing creates more than 4.5 times as many jobs as simple saw milling (11). By focusing on minimally processed raw materials exports, B.C. is trading in jobs for corporate profits that often quickly escape the province. MacMillan Bloedel has sawmills and other operations in the U.S. Southeast that process wood coming by rail and sea from B.C.'s forests. The CEO of MacMillan Bloedel has even pledged to move capital generated by B.C.'s forest liquidation out of the province and out of the country: "There isn't any possibility of (MB) expansion in B.C..... When we make any large investments, we'll put them where they can get the best return. That's not in B.C., and it's probably not in Canada." (12).

B.C.'s forest industry is extremely inefficient. The consultancy firm Price-Waterhouse has said that an increase of 12% in timber efficiency is possible and that a reduction of the Annual Allowable Cut (AAC) to 57 million cubic metres a year could be mitigated by "increased utilization of marginal wood supplies" (13). In other words, we could reduce the AAC by 12% and still get the same amount of fibre from the forest. The preference of industry is clearly to log the forests first and then worry about efficiency once they are gone. To create jobs, the Government should force the industry to increase wood utilization efficiency, not cut more trees.

REFERENCES

(1) Council of Forest Industries, British Columbia Forest Industry Factbook, 1995.

(2) Mascall, Michael and Barbara Campbell, "Executive Summary," Draft Study 2: "Public Investment in the B.C. Forest Industry: 1988/89 to 1995/96," prepared for B.C. Wild, March 1997.

(3) Burda, Cheri and Fred Gale, Trading in the Future: An Examination of British Columbia's Commodity-Export Strategy in Forest Products. Discussion Paper D96-8. December 1996.

(4) Heaps, Terry and Richard Schwindt, Chopping up the Money Tree: Distributing the Wealth from British Columbia's Forests. Vancouver, David Suzuki Foundation, 1996.

(5) B.C. Ministry of Forests Annual Reports.

(6) BC Stats. British Columbia Economic Accounts, 1986 - 1995; Tourism Related Employment 1984 - 1996; 1996 Financial and Economic Review. 1997.

(7) Powers, T.M. Economic Well-Being and Environmental Protection in the Pacific Northwest. University of Montana, December, 1995.

(8) Marchak, Patricia M. Logging the Globe. Montreal-Kingston: McGill-Queen's University Press, 1995.

(9) Egan, Timothy. "Oregon, Foiling Forecasters, Thrives as it Protects Owls." New York Times. Oct. 11, 1994.

(10) Pulp, Paper and Wood Workers of Canada, Jobs, Trees and Us, 1993.

(11) Select Standing Committee on Forests, Energy Mines and Petroleum Resources. Lumber Remanufacturing in British Columbia. 1993.

(12) Findlay, Bob. CEO of MacMillan Bloedel, quoted in Canadian Business, July 1991.

(13) Price-Waterhouse. An Analysis of Recent Forest Policy and Land Use Initiatives in B.C. B.C. Forest Alliance, 1997.

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