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Forest industry coming to crunch time, says Ben Meisner. It's winner takes all in B.C.'s forests
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By Ben Meisner
Over the next ten years, the lumber industry as we have known it over the past 100 years is set to hit the wall and we are oblivious to it. The recent comment by Brink Forest Products owner-operator John Brink, that he will not have access to product come this April, only points further to a growing problem within the forest industry.
We are being attacked from two fronts; first, the beetle infestation. While a boom for the forest companies over the past few years and expected to continue for the next five to ten, can only be described as a short time fix. We are under siege from the worst beetle plague to ever hit North America. When the beetle is finished, our pine supply will be reduced to a fraction of its former self. That section of the woods industry will dry up until new wood has reached maturity. That takes time.
But wait, there is an equally serious problem lurking in the background that has not been addressed, and that is the problem that threatens the very economic fibre of the entire province. When the Provincial Government introduced its new forest policy, it was with the hope it would make major changes to the way in which we harvest our forests.
It has, but not in the manner envisioned, with the result that the government is unable to get control over the problem. That problem is the ever-increasing control of the forests by fewer and fewer companies. The original hope was that the new code would result in more of a market based pricing. Instead, we have been besieged with a flurry of take overs. Canfor and West Fraser control 70 per cent of the forest industry north of 100 Mile House. Toss Tolko into the mix and these three giants control 80 per cent north of Hope. It is the average resident of B.C. who supposedly owns the forests, the minerals and the water, but more and more these precious and prosperous resources are falling into the hands of a few.
With 20 per cent of the holdings, Jim Pattison, (who no one denies is a sharp operator) has quietly become the single largest shareholder in Canfor. After Canfor gobbled up Slocan, the management of Slocan (under the stewardship of Jim Shepard) was moved over to Canfor with a view to trimming costs.
Large corporations will take what they can. They are profit driven and the responsibility to provide jobs in return for the forest tenure becomes secondary. If the total production is controlled by a couple of players, it is very easy to set the standards under which contractors, sub contractors, truck drivers, salesmen and indeed office workers operate. As John Brink is discovering, you can also effectively control the market.
Today, logging contractors are required to furnish a financial statement to the companies they do work for. Now it may be argued that it gives the forest company an opportunity to see who is liquid enough to be in business. On the other hand, it also gives the lumber company an opportunity to squeeze some more money from the contractor.
A further problem facing the industry is the growing super mills. Six mega mills north of 100 Mile House could easily process all of the lumber currently being milled to the Yukon border. On the other side of the ledger, of the 1.5 billion board feet of low grade lumber, less than 5 per cent is being manufactured in the north.
That's where John Brink came in. The problem is that he is the first person who has had the conviction to step up to the plate. Forest revenue should benefit all the people in the province. Nearing the bottom of the ninth, we have to find some way to adjust our swing and hit this one out of the park. In this game, winner takes all, and we cannot afford to lose.
© Copyright 2005 Prince George Free Press
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