COLUMN: Government can’t fix forest industry
It’s a question that has bugged British Columbians for decades: How is it that a place with one of the richest forest resources in the world still turns out mostly rough-sawn lumber? Then when we need furniture, we head down to Ikea for a nice flat-packed dresser made of plain Swedish pine, or to Wal-Mart for a finished particle board audio stand made in Ohio.
It’s a question that will return as the B.C. legislative session resumes this week. The NDP is looking to shine a bright light on the crumbling forest industry, the dark corner of a provincial economy that still basks in booming employment and growth numbers in its urban areas.
NDP leader Carole James set the tone with a speech to tree-planting contractors at SunPeaks resort near Kamloops last week. One of the points she and forests critic Bob Simpson will be hammering home is the dominance of Crown timber land by a handful of big companies, who sold Premier Gordon Campbell on their need to be globally competitive and were rewarded with loosened regulations. Now small, value-added producers who serve the renovation market with things like pine paneling can’t get enough logs, they say.
I asked Forests Minister Rich Coleman about that last week, and he acknowledged that supply is a problem for some small operators. But he says that was addressed by legislative changes made last year and a series of earlier moves. Community forests, interim resource settlements with aboriginal groups and B.C. Timber Sales have diversified the timber market.
“It’s really about people negotiating with each other to get the wood they need,” Coleman said.
Now there’s a new big player in B.C., but that may be a mixed blessing. The major beneficiary of the Pope & Talbot bankruptcy sale is an Indonesian outfit called Sinar Mas Group, which is apparently looking for new wood sources as the post-Suharto government of that country tries to exert control over unregulated logging. Sinar Mas, which also operates in China, just added the idle Fort St. James sawmill to its shopping cart, along with the Mackenzie and Nanaimo pulp mills.
Interfor moved in earlier to buy up two of Pope & Talbot’s three Kootenay mills, using their cash to place a long-term bet that the region’s relatively healthy timber will rise in value once the U.S. economy recovers and the torrent of beetle-killed timber isn’t flooding the market.
And in a classic example of the old investment saying, “Buy on the sound of cannons, sell on the sound of trumpets,” Jim Pattison has quietly increased his stake in Canfor to about a third.
The B.C. Liberals are setting up a “working roundtable” on industry solutions that should be announced this week. The NDP says that’s another ad-hoc crisis management move, and what’s needed is a permanent commission that’s at arm’s length from both corporations and unions. It’s hard to imagine either of these guiding the industry back to competitiveness.
As Simpson points out, the danger of basing the B.C. industry on a few high-volume lumber and wood pulp producers was known long before the U.S. dollar and housing market hit the ditch. As B.C. was going through its hard effort to raise environmental standards in its logging operations, the surging competitors were in Russia and China, neither noted for stringent ecosystem protection, or high wages. Add fast-growing fibre plantations in South America, and an oversupply of commodity products from B.C.’s own mills.
Innovation will finally come when easy money from two-by-fours is gone for good. Until then, the big investors can afford to wait out the storm.