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B.C.’s forest industry faces numerous challenges

B.C. Premier Christy Clark will be ushered into Buckingham Palace on Nov. 15 for an event where she will promote her Great Bear Rainforest agreement on an international stage, under the auspices of the Queen's Commonwealth Canopy.

The agreement to preserve a vast stretch of the province's prime old-growth forests is a great marketing tool for the B.C. forest sector, representing the Cadillac of sustainable forestry practices. That agreement is a bright spot for a sector that is facing a convergence of adverse conditions.

"It's a huge recognition from Her Majesty for British Columbia," Ms. Clark said in an interview. "It's an opportunity to introduce millions of people to the beauty and ecological balance of the Great Bear Rainforest."

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Read more: Duke and Duchess given royal welcome at B.C.'s Great Bear Rainforest

That's just one half of her agenda: Tourism from the United Kingdom is important to British Columbia, but forest products are the next largest export item. The Premier is confident that there is an opportunity, in the post-Brexit world, to expand trade agreements with Britain.

"This allows the forest industry to grow their reputation as the best sustainable forestry in the world."

But the state of B.C.'s forest industry can be measured by the number of tugs and barges mothballed by Seaspan, because the services those vessels once provided the forest sector are no longer needed.

The marine transportation company owns the largest active fleet in Canada, but "if you look at our current out-of-service fleet, by itself it would be the second-largest tug and barge fleet in Canada," noted Jonathan Whitworth, Seaspan's chief executive officer.

Forestry is still a large part of the company's marine portfolio, he said, "but it's a glimmer of what it was 15 years ago."

Forests, Lands and Natural Resource Operations Minister Steve Thomson is crafting the government's response to the challenges facing the industry, which even in its diminished state still provides 65,000 direct jobs, is critical to the economic health of more than 140 rural communities, and created exports of almost $13-billion last year.

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Here are four areas where the sector is struggling:

Uncertainty over the land base

There has been little progress in settling treaties with the province's First Nations, so the issue of ownership remains a question mark over much of the 55 million hectares of forest land in B.C. The government is pursuing a fast-track solution by seeking to negotiate economic benefit agreements and partnerships with indigenous communities. Mr. Thomson says between 10 and 15 per cent of the annual allowable cut is now in the hands of First Nations.

Competitiveness

The forest industry says it faces rising costs of harvesting and hauling that threaten to erode its competitive advantage. Mr. Thomson acknowledges that government has a role here regarding taxation, energy costs and regulation. "As an example, costs are rising because the timber isn't as close to the mills as it used to be. So we are working on innovations in hauling," he said. The province has approved the use of larger trucks for hauling – nine-axle vehicles – to reduce the cost of logging transport. But it has to be cautious about tax breaks, given the precarious state of trade now with the expiration of the Canada-U.S. softwood lumber agreement.

Getting to market

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The U.S. election results on Nov. 8 means that Canada now faces a staunchly protectionist administration as it seeks to renegotiate a trade deal on softwood. British Columbia accounts for half of Canada's softwood lumber sales to the United States and is anxiously looking for a new agreement. Canada has fought a long battle with the U.S. Lumber Coalition in the courts and before trade tribunals over allegations that B.C. has subsidized softwood lumber.

While all that has been going on, the province has sought to reduce its dependence on the U.S. market by prying open new markets. China is now a significant buyer and the province is working on opening doors in India with value-added products such as doors and windows.

Meanwhile, Mr. Thomson is off to China and Japan later this month to shore up B.C.'s trade by showcasing new products, "to continue to move up the value chain in those markets."

Timber supply

After a rush to process dead and dying wood in the wake of the pine beetle epidemic, the available supply of logs in the interior of the province is now cresting over the edge toward a long downhill. And this is a shift that will last a generation or more – the annual allowable cut is expected to be reduced by 20 per cent, and it is not expected to rise again for at least half a century. But that's not all. The devastating spread of the tiny beetle was attributed to a series of mild winters that failed to check their advance through the forests. The changing climate threatens to bring a biblical plague of drought, pests, disease and wildfires for B.C.'s forests.

Susan Yurkovich, president of the B.C. Lumber Trade Council, remains optimistic about the future because the sector has faced hard times before. "The reason that our industry in British Columbia is highly efficient is because adversity is the mother of invention," she said.

The Great Bear Rainforest pact cannot be replicated across the province, but it was founded on a groundbreaking agreement between industry, environmentalists, government and First Nations. To survive this coming round of adversity, the forest industry will need to engage once again on all those fronts.

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About the Author
B.C. politics reporter

Based in the press gallery of the B.C. Legislature in Victoria, Justine has followed the ups and downs of B.C. premiers since 1988. She has also worked as a business reporter and on Parliament Hill covering national politics. More

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