The
Forestry Industry Faces Challenges and Change
By Jane Mundy
Challenges facing both the interior and
coastal industry have placed the future of BC’s #1 industry in doubt. While the Competition Council is due to release
its recommendations on the future of the industry sometime this spring, changes
are needed to ensure its continued viability.
Rick Jeffrey, president and CEO of the Coast
Forest Products Association (CFPA), says traditional markets are declining due to
lack of investment and regulatory and cost burdens we face in BC that don’t
exist in competing jurisdictions. “In addition, the risk for capital that does
come here is high given uncertain labour costs and First Nations land claims
that continue to be unresolved,” says Jeffrey.
“So
the challenge is to create a regulatory framework – a business climate that
will allow for positive net earnings and attract capital,” he says. To
revitalize the coast, he estimates $2.5 billion is needed to update manufacturing
facilities, enabling us to compete in global markets.
According to Jeffrey, companies alone aren’t
generating positive net earnings that would give them the ability to reinvest.
“That requires a partnership between the industry, the three levels of government
and key stakeholders such as communities, labour and First Nations,” he says.
To maintain existing markets and tap into
emerging markets, investments in productivity and innovation are required. Jeffrey
says there is progress: “The current Liberal government, through its Asia
Pacific and forest investment activities, is working on marketing with the
industry.”
Jeffrey urges understanding, reminding the
public that the industry is evolving. “The
CFPA is working with both federal and provincial governments to secure funding
for workforce and community transition. Some mills will close and production
will move to other areas; some communities will gain and some will lose. And
new mills will be built as we attract the capital.”
John Allan, President and Chief Executive
Officer, Council of Forest Industries and President, BC Lumber Trade Council, cites softwood lumber, the pine
beetle and a strong Canadian dollar as major challenges faced by the interior.
As well, “The industry needs to be globally competitive for its survival and
companies need to understand local communities’ anxieties about where the
industry is going, especially with the pine beetle and possible future loss of
timber supply,” he adds. “One remaining challenge is to implement a new
timber pricing system which I suspect will happen sometime later this year.”
Allan is anxious to work with the government, communities and First
Nations. “We are talking about beetle strategy but right now we are in a
day-to-day fight with softwood,” he says. We should take a step back and do
some long-term planning once the report from the Competition Council on
Forestry has been reviewed by government.”