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.”