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Today’s Reality in the Forest Industry
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From the Prince George Citizen
The BC forest industry has provided a lamentably low return on investment over
the past decade. Trade barriers, changing consumer preferences and a stubborn
refusal by the government to change the way that it manages the public forests,
have seriously impacted earnings. Furthermore, industry has been reluctant to
invest capital in an uncertain economic environment. Collectively the BC industry
has lost over 10% of the Canadian share of the US market in the past ten years.
At the same time, BC has become the highest cost producer in North America.
Much of this could have been avoided. “Our forest policy belongs in the
1950’s and are no longer relevant to today’s reality and certainly
nowhere near sufficient to meet future trends” says John Brink. The strategy
of the fifties was to become the lowest cost producer of commodity products
and until the 1980’s that was the case. “We should have spent the
past decade creating investor confidence but instead we have created a complicated,
expensive system of forest management heaped on outdated policies and subject
to attack by outside interest groups” he adds.
John is convinced that there must be a system that rewards the whole supply
chain in the forest industry: the harvest sector; primary saw mills and pulp
mills; and secondary and value-added wood manufacturers. “Access to fibre
at competitive cost is the key issue” he adds. “There is certainly
a need for change: A need for a new industrial strategy that looks at the interests
of all players allowing them a reasonable expectation of a return and which
permits us to face the reality of the changing market”.
“How the world perceives us is critical. BC is probably the most visual
piece of real estate in the world right now” John says. This is true. Consumers
in Europe and increasingly in our traditional US markets are demanding that
BC demonstrate, through independent verification, that it practices sound, sustainable
forest management. Today, the modern consumer demands a certification system
that contains the three critical elements of global recognition, independent
third party verification and multi-stakeholder buy in. “Whether we like
it or not, we must incorporate these concepts in the industrial strategy”
says John adding, “that strategy must look ahead to the next 5, 10, 25,
50 years”.
John says that until we resolve these fundamental structural problems, we will
continue to face uncertainties and economic hardship. He said “The real
shame of the situation is that we could be creating two to three times the number
of existing jobs in the forest industry – in a stable and profitable business
climate - if we agreed on a vision of a sustainable industry aimed at further
manufacturing and on ways to reduce our reliance on commodity products.”
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