We Need More (not less) Wood Manufacturing in BC – Part 4
By Peter Ewart
Monday, April 26, 2010 03:44 AM
By Peter Ewart
( for previous articles in this series see Part 1 ; Part 2 and Part 3)
Wood is our oil. Alberta and the northwest corner of British Columbia have vast reserves of petrochemicals that are currently being tapped. But in the Northern, Central and Southern Interior of BC, as well as Vancouver Island, we have our own version of these oil and gas reserves, and that is our vast forests of wood.
Like oil, wood is an organic substance with a complex molecular makeup, from which human beings, through their labour and ingenuity, have developed into a bewildering variety of products and uses. One of the greatest qualities of wood, and the reason why it has been used by all cultures going back hundreds of thousands, if not millions of years, is its tremendous versatility. Used extensively for shelter and tools, as well as transportation (canoes, boats, bridges, aircraft, etc.), wood has played a crucial role in the development of virtually all societies.
Another great quality of wood is its renewability, something which oil and gas lacks. Trees and forests are stubborn things. Not long after the ice age ended and the glaciers receded over British Columbia, pine, spruce, fir and other species re-colonized the devastated, barren landscape and established the forests of today. Even now, in the wake of the pine beetle, these forests have begun their regeneration. If environmentally sound policies are followed now in terms of silviculture and harvesting, there is no reason that the vast pine forests of the Interior will not return.
Like oil, wood has a virtual bounty of “value chains” whether these be in the production of dimension lumber, secondary solid wood, pulp and paper, engineered fibre, biofuels, biochemicals, pharmaceuticals, and so on.
Today, wood in its many forms is utilized in thousands of consumer and industrial products, and is one of the key materials in trade and industry. Indeed, in that regard, a countless number of products and uses for woods are still waiting to be discovered. Thus, any economist or pundit who suggests that forestry or wood manufacturing is a “sunset industry” clearly has a narrow outlook and limited imagination.
The issue today is not whether wood has potential. It clearly does. Rather, the issue is whether we take up the challenge of realizing this potential - of getting more value out of the bountiful wood found in our province; of further extending the value chains and increasing their number; of building on the invaluable work and innovation carried by all the generations of foresters, both native and non-native, who came before us; of ensuring that the forests are healthy and environmentally sustainable.
In the past, especially in the Interior of the province, a primary industry (dimension lumber, pulp and paper) has dominated. Indeed, this sector of the industry has reached a high degree of technical development and sophistication which, in itself, is an important backbone to the provincial economy.
One shortcoming, however, has been the fact that additional “value chains” such as secondary wood products and a production machine industry, have remained seriously under-developed, at least compared to the primary sector. Even more than that, there has been a tendency for the largest companies that dominate the primary sector to stand in the way of the development of secondary industry, for example, secondary solid wood products, especially in the Interior (see Part 3 - OBAC and the strange case of the missing word – Opinion250 – June 29, 2007).
In the political sphere, various governments over the last twenty years and before have proclaimed that they will take up the issue of expanding secondary industry in the Interior and the province as a whole. Indeed, when the NDP was in power in the 1990s, it put forward various initiatives through the Forest Renewal program which had that professed aim. However, by the time it left office in 2001, while there was notable successes in dramatically boosting secondary wood exports in some areas, the overall results compared to other provinces were disappointing, with BC’s production slumping from 33% of Canada’s total in 1990, to just 14% in 2002. In addition, BC had “the smallest ratio of value-added wood to total wood exports of any province in the country” (BC Stats – August 22, 2003).
The situation deteriorated much more after the Liberals won the election in 2001. Various programs initiated when the NDP was in office were terminated, and secondary wood production plunged. The Liberals seemed to lack any vision regarding the development of the secondary wood industry in the province. Indeed, it is hard to detect any vision for the entire forest industry during this time other than allowing the existing monopolies and multinationals to have their way in practically everything and further consolidating their hold on the industry.
In effect, while there were some exceptions, especially when the NDP was in power, the fact remains that the policies of both parties did not halt an overall decline of the secondary wood sector over this entire period. Most apparent was that, under the influence of neo-liberal ideology, neither the NDP nor the Liberals were prepared to take on the primary forestry monopolies in any kind of substantive way and demand changes that would turn the situation around and stop the decline. As the old saying goes, the proof of the pudding is in the eating.
So now we flash forward to 2010. Most of the vast pine forests of the Interior of British Columbia have been ravaged by the pine beetle. In years previous, the Softwood Lumber Agreement curtailed exports to the American market; now the American housing market itself has virtually collapsed in the wake of the Wall Street meltdown. In addition, as has been noted by other business analysts, BC and Canadian forest companies in recent years have maintained “low levels of spending” in R&D and new product development, have not re-invested adequately in its aging pulp and paper mills, and “do not compare well against other countries in the value created from its wood harvests” (see “Part 2 – Critique of Business Council of BC discussion paper on forestry” – Opinion250 – Oct. 23, 2009).
The outcome of all of this is that the forest industry in the province is experiencing the most catastrophic downturn in memory, with forest companies closing dozens of mills, thousands of workers laid-off, and communities sent reeling.
Now we have the report from the International Wood Markets Group predicting that up to sixteen major primary mills could close in the Interior over the next few years. Coupled with the existing devastation in the industry, this possibility poses a huge dilemma for the provincial Liberal government, which has always presented itself as the most “business savvy” political force in the province. The fact is that much of the destruction of BC’s world class forest industry has happened on its watch.
Thus we have the spectacle today of the Liberal government re-discovering forestry “diversification” and “value-added” as a way to demonstrate that it, indeed, has a way out of the forest industry crisis and that there is a future for forestry-based communities. This has been coupled with forays to China and other Asian countries to further diversify the markets for BC wood products, which various industry analysts have been urging for a long period of time as a means to lessen the industry’s dependence on the U.S. market.
In themselves, some of the Liberal government’s proposals to diversify the industry could be positive, whether these be expanding community forests, establishing a wood innovation centre in the Interior, fostering bio-fuels and bio-energy production using waste wood, and so on.
But the current government faces the same challenge that the previous NDP government did. In order to seriously diversify and expand secondary wood production in the province, the monopoly stranglehold of the primary producers has to be loosened, whether it be over timber licensing, forest policy, or access to timber for value-added producers, and demands have to be put on the big companies to expand and extend production into the secondary sector.
At this point, it should be noted that industrial, large-scale, primary wood production, as exists in the Interior of the province, is not in itself the problem. Rather the problem lies with the narrow, limited, “cut and run” outlook of the financiers who now control these companies. Having such advanced, large scale production facilities is a valuable asset for the province, especially if these are built upon to extend advanced production into the secondary wood area. Despite what some may wish, the era of technologically unsophisticated small scale wood production as a key driver of the forest economy is long over. We cannot go back to an idyllic past, but must build upon the advanced technical foundations that have already been established.
Now it is a fact that the financiers who now dominate the forest industry have huge influence in government. These financiers are quite adept at suffocating secondary and other kinds of wood initiatives if they do not perceive them to be in their interest. In addition, there is the added problem that a number of the so-called “green initiatives” being put forward at the provincial and national level appear to be simply means for government to shovel money out to big business supporters and lack any context of a broad industrial strategy to preserve and expand manufacturing.
So what social force is there that can effectively push a strategy to save mills from closing in the short term, as well as expand and extend wood “value chains” for the long term? One that has the possibility of formulating a vision for re-industrializing the forest industry, and expanding wood manufacturing throughout the province and country?
The business owners and entrepreneurs in the secondary wood sector have some desires and aspirations in that regard. But, economically and politically, as a sector it remains weak, often at the mercy of the big monopolies and multinationals which dominate the primary sector and have huge influence in government.
Forestry-based communities throughout the province also have a keen interest in expanding wood value chains. But, under the system of governance in the province, the municipal level of government has little power and, as presently constituted, does not have the clout to push through a far-reaching industrial strategy at the provincial level for forestry. A similar challenge exists for Native bands and nations.
That leaves one organized force – the workers of the province. It is this force, acting in partnership with communities, First Nations, and other sectors, that has the best potential for spearheading a broad movement to save the existing forest industry, expand wood manufacturing “value chains” throughout the province, and truly make “wood our oil”.
How might this be accomplished? We will discuss that question further in the next article in this series.
Peter Ewart is a columnist, writer, and community activist based in Prince George, BC. He can be reached at: peter.ewart@shaw.ca
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Not too long after, fuel prices began to rise and the explanation was shortage of supply and specifically "they" explained to us; it was a shortage of refining capacity. This even went so far as critical diesel fuel shortages in western Canada.
Fuel prices are largely manipulated by throttling refining output rather than an actual shortage of crude oil. "They" can do this because a very few control this output worldwide. It's obviously a selfserving monopoly which "we" consumers are held hostage.
There are a few aspects to this example which are worth considering. One would be to export logs or consolidate timber supplies into fewer and fewer regional facilities rather than local facilities because "they" make more money doing this.
"We" lose local employment and "we" lose economic viabilty and sustainability of our communities.
The second would be to contract low cost power exports to others while we in BC supposedly run out of affordable power.
Power rates are supposed to increase by nearly 30% over the next few years and a large part of this will go to independent power producers to assure ROI.
Why is it that while natural gas prices are continueing to drop and are very low,our prices "we" must pay continue to rise?
Why do "we" have to pay to increase power output and build a transmission line to the huge northeast natural gas plants so "they" can keep expanding, employ Albertans and still profit from exporting cheap natural gas?
It is hard to believe anything that "we" are told when governments give wide open licence so "they" (monopolies)do what makes them more money, regardless of what "we" must pay for.