The newly published report for the BC Business Council’s Outlook 2020 makes interesting reading. (“Opportunity BC 2020 – BC’s Forest Industry: Moving from a Volume Focus to a Value Perspective.”) In an effort to attract new investment into wood products manufacturing in BC, the authors have made the following observations:

“In the 1990s the provincial government’s priorities shifted dramatically in favour of land use issues, multiple use policies, ‘forestland’ set asides and the creation of parks”. The report notes that the result of this was many foreign investors withdrew capital from the industry and re-invested elsewhere.

The report goes on to say that the “removal of institutionalized obstacles to intensive forest management (eg. operating risks and excessive regulation and a shift away from high harvesting costs to product price ratio) could go a long way to generating new wealth on BC’s better growing sites”.

The report’s authors seem to suggest that protecting the land base and allowing other resource uses to be carried out in conjunction with timber harvesting is a bad thing. They say that a push towards intensive forest management will solve the woes of Crown land forestry and the wood products industry in BC.
But when you look at the large area of private forestland already being managed on Vancouver Island by much more intensive methods than on Crown land, with far less regulation and concern for set asides, are we really seeing evidence that this approach is the right one?

If the idea is to supply BC industry with raw material, it is certainly not the model, since the economic environment is such that a large majority of the timber being harvested now is exported for manufacturing overseas. In an effort to stay in business and provide the return required to shareholders, tens of thousands of hectares of “higher and better use” lands are on the market, awaiting an upswing in the housing market for development. Selling forest lands for real-estate development will further erode the supply of logs to BC mills.

To my way of thinking, there are pervasive issues contributing to the uncompetitive nature of our forest industry, ones that won’t be cured by relaxing forest management regulations to lower our operating standards. Topics such as trade negotiations, currency fluctuations, taxation burdens and wage structure and legislation all help to make it very difficult to compete with our US neighbors, let alone on a world stage. These are not just problems of the forest industry, but are magnified in the forest sector by nature of it being such a capital-intensive, primary manufacturing business.

What is apparent it that it is time for the true paradigm shift, to move away from the current industrial models and actually embrace the potential revenue options from truly multi-purpose land management. Precisely because BC has led the way in landscape level forest management, people are looking in this direction for guidance, and the perception is growing that opportunities now exist for new markets. For a start, it’s not that far a stretch to imagine all the province’s Crown lands having Forest Stewardship Council certification adopted by regulation, making our land base the premier place to purchase sustainably managed products, for which demand is currently outstripping supply. Even more interesting are the investors “waiting in the wings” for the chance to purchase forest carbon offsets from forest conservation projects; the result of this will be a new and potentially large investment pool that BC can access on account of our high standards of governance and regulatory controls.

A private forestland model that Ecotrust Canada has been working on involves using the full suite of natural resource revenue from the forest, on a scale that will be sustainable into the future, and that will equal or better the income from just harvesting timber. Watch this space for further developments in the coming weeks …

– Neil Hughes, Forestry Program Manager