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Blue Skies, Grey Skies

By Peter Ewart

Tuesday, September 05, 2006 03:43 AM

  
I worked on an asphalt paving crew in Prince George for a number of years when I was younger, much younger.  It was not an easy job.  We hacked away with our picks under the relentless sun, shoveled sizzling hot asphalt into wheelbarrows, and steered road rollers endlessly back and forth down long black ribbons of pavement.
One thing that pavers back then - and still today - always paid attention to was the weather.  It could be bright blue and as hot as hell, but if those fat clouds with dark bellies began to gather ominously over Cranbrook Hill, we knew a storm was coming and we had to watch out.
Why?  Because rain is the bane of pavers all over the world.  A few minutes of rain and the compact gravel base, so carefully prepared, dissolves into a soupy mess.  Another few minutes and the hot asphalt that, in good weather, slides off shovel blades like butter, turns into a cold sticky mass that is as ornery as crazy glue and as stubborn as a chunk of old concrete.  If there is a hell, one of the jobs down there surely must be shoveling cold asphalt in a heavy rain.
So good pavers always watch the weather, and prepare accordingly.  As much as possible, they schedule their work to avoid getting caught in the inevitable downpours.
Today, in the Prince George region things look positively sunny, at least relative to a few years ago.  Houses are selling like hotcakes; highways are choked with logging trucks groaning with freshly cut logs; construction companies are advertising for tradespeople; and restaurants are screaming for cooks and waiters.  In the coffee shops, rumours swirl of oil and gas in the Nechako basin and of pipelines crisscrossing the province.  The population of the town will surely shoot up, the chatter goes, just like that crop of dandelions that dots our lawns every spring. 
Some even claim that the lustre of the Vancouver – Whistler 2010 Olympics will rub off way up here in the North.  And then some even say that the sun will never stop shining. 
There truly is a fever in the air.
But times are coming when the sun will cloud over.  And there is a lot of evidence that such times are gathering on the horizon.
The American housing market is starting to fall – no, a better word is plunge - into a freefall that threatens to pull the entire North American economy into recession.  British Columbia supplies half of U.S. lumber imports, and the ripple effect from the U.S. downturn will not be small for our region.
If the price of lumber dips more, and there is good reason to believe it will, the export taxes in the Softwood Lumber Agreement will kick in, further aggravating the problems of Canadian lumber producers.
And then there is the pine beetle epidemic, which is being described as the largest natural disaster of its kind in North American history.  8.5 million hectares of prime BC timber is already destroyed, and the epicenter of the infestation is in our region.  There is no disputing the results: the annual allowable cut will go down significantly, jobs will be lost, and mills may close. 
These are pretty hefty clouds that we ignore at our peril.
Lately, I, along with others, have been involved in a regional “Stand Up for the North” committee that is planning and organizing a conference at CNC in Prince George for the weekend of November 4th and 5th about what communities can do in the wake of the pine beetle.  The idea is to bring people together from across the region, both small and big towns, to discuss and develop made-in-the-north solutions as to how we can renew our communities and forests in the challenging period that is looming.
Some sectors of the community have been very supportive.  Others don’t see much of a need for such a conference, given that the economy is going so well.  Still others hang back because they fear they will offend the provincial government in some way.
The reality of the situation is that we are entering a period where the forest industry (and by extension the economy of the Prince George region) cannot and will not continue in the old way.  Big, even potentially cataclysmic, changes are coming.  Unless we begin to discuss the new realities that are rapidly descending on us, we will be caught unprepared and some communities may even be swept away by the storm. 
Pavers often glance up at the horizon as they work.  Despite their watchful eyes, they are an optimistic bunch.  And so are Northerners.  From the time of the first native people and the time of the first settlers, Northerners have never ignored the realities of life in this beautiful, productive, but sometimes harsh land.  Indeed, healthy optimism, unlike euphoria, means facing reality square on and developing plans accordingly.
Blue skies, grey skies.  Whatever the weather is today and whatever it may be tomorrow, we can still continue to build our communities and prosper in the future.  But only if, like those pavers sweating away on the roads, we keep our eyes wide open and our gaze to the horizon.
  
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Comments

Truer words have seldom been spoken!
But tell that to the ones wearing those rose colored glasses?
No such thing as a "rainy day" on their horizon.
So many are just going into debt like there is no tomorrow, and it is a spree to spend, spend, spend, and those good old credit cards can be maxed right out. Going to be a lot of "haves," and who wants to be a "have not?"
When it comes time to "pay the piper" and the economy flip flops and goes sideways, those who operate on the side of caution can pick up some good deals from the "haves" who cannot keep.
Experience may be the best teacher, but there will be learning experiences which will devastate many.
When the crunch comes, and it will, there will be no building of the community, and prosperity, if any, will be for very few.
Recovery always takes time!
Anyone remember how quickly the fall came in the early '80's?
Many never fully recovered!
The best way to ensure continued prosperity after the current period of economic buoyancy is to strengthen the union movement in both the public and private sectors.

Another good way would be to print more money, so we have extra when we run out.
"a conference at CNC in Prince George for the weekend of November 4th and 5th"

Whoop dee ding!!! .... one more conference .. sort of like one more study ......

Then what? ....

What is the big plan??????

A conference ... and then ??? ... and after that??? and then further down the road???? Or do we need a conference on that as well???

Where are our leaders? ... does everything these days have to be designed by a committee of sorts? We all know what they say about the stuff that gets designed by committee.

http://en.wikipedia.org/wiki/Design_by_committee

The US housing market is collapsing?! If so, anyone know and understand why? If, or as, prices go down, what will happen? Fewer will be built? More will be built? What are the demographics? Where are they going in 5 years? 10 years? 15 years? 20 years? What housing requirements will this result in?

Who understands these things and goes to high ground to see what the weather looks like for much of the remainder of the day rather than sweating it out at the base of the hill and accepting whatever happens when it happens? Or how about the person who has a bit more savvy, realizes the weather is coming from the west that day and calls someone in Vanderhoof? Burns Lake??

BTW ...... who is working on the diversification approach? Don't hear much of that these days.

And another BTW .... I saw a recreation/retirement housing project under construction in the Shuswaps recently where the builder had switched from stick-framed wood to stick-framed steel half way through the project. Albertan and European buyers. Different expectations? Poor access to wood? Steel cheaper?
A long-winded Cup Is Half Empty diatribe.

The bottom line is, how many resource communities would have given their eyeteeth for such a 10 to 15 year economic boost as we're in with the Pine Beetle.

To nay say such opportunity is the equivalent to not taking a well paying employment contract, because it won't last forever.

Get over it and plan accordingly or you'll miss the good times worrying about what might happen.
If you went back 100 years ago the sky was going to “fall in” because the farmers and black smiths did not pay attention to change when the first automobile drove by their farms. Those that embraced change survived and made money and those that refused to change went broke.
Some made things happen – Some watched things happen – Some said ‘What happened’?

Prince George and area will become a massive distribution centre by Highway, Railway & the biggest of them all, Airport. Also Oil & Gas, Mining, Hydro Power & yes Forestry (which will play a smaller part in the future). Folks we have not even seen the beginning of prosperity and positive change.
Ain’t it great…
If one wants a snap shot of our future in forestry 5-10 years from now I highly recommend a drive down the Nazko highway west of Quesnel. It is one of the most beautiful 90km cruising stretch of highway in the province with lakes around every corner and little small town service stations dotting the highway. Even a very nice provincial park as well as numerous resorts.

It looks like it was once paradise, but has been devastated by the pine beetle to the point that it would shock you to think this is what the rest of our landscape and resource base has in store for it. Its a highway harbinger of our near future.

Take a nice Sunday drive, the whole highway was recently repaved this year and is awesome for motor bike touring. Spend some money at the small cafes and service stations, and think how their future is linked to ours. My thinking is people will not be so confident in the future of our forest industry.

--------------------------------------------

That said the facts are now that the US housing industry has every single indicator in the negative for the first time in 30+ years and by all accounts is a bubble about to burst. Most in the US have taken advantage of low financing (lowest in 40 years), 50 year mortgage terms, and 0-5% down payments.

They are so leveraged that a 20% drop in the market would devastate the economy wiping out ten times what the tech meltdown did, but in this case targeting families of the middle class and not institutions that can absorb the lose through diversification. It is like margin investing to the max and getting wiped out by a 10% drop on the margined investment.

The banks created this mess with easy access to cash for real-estate investments by promoting the high housing valuations to increase interest payments and spur on the consumer economy with appreciation wealth. It was a short term policy driven by the foreign bankers that own the US Federal Reserve and set US Federal Reserve policy for their own agenda. A strong middle class does not fit with their long term objectives.

Time Will Tell
A Zebra is a horse designed by a committee.

Albert Einstein once said that there are two things that are infinite. (1) the universe and (2) stupidity. He said that he was not so sure of the 1st one.

We had better become aware of the 2nd one. Stupidity in an under utilized word, in a world where stupidity runs rampant.

If we do not understand the problems that we will be facing, how can we expect to fix them.

We do not have (1) politician in this Province that would put his job on the line by telling the truth. Everyone has only one concern and that is getting re-elected. How can we solve long term problems with short term and short sighted politicians.

Now lets look at the Pine Beetle. The Sawmills and Pulp Mills in North Central BC are operating at capacity. There are no plans that I am aware of be build any new Sawmills/Planers or Pulp Mills, in fact the opposite is more likely. Some mills will close. How then do you propose to utilize all the extra logs that are available because of the beetle kill. You certainly cant do it by trying to turn them into pellets. Pellets as far as I know are made from surplus sawdust from Sawmills/Planers and therefore unless you build more you have a limited supply.

Dont for one minute think you can take logs out of the bush, haul them to a sawmill site and turn them into pellets. That is totally uneconomical and would never happen.

If the Beetle Kill timber is not logged and utilized in the next 5/10 years it will rot where is stands. If you do not build capacity for this timber then you will only utilize a portion of it.

I am not aware of anyone building new mills. The OSB Mills planned for Vanderhoof and Quesnel have been put on hold. If the US Market takes a nose dive, you can rest assured that the local mills will not be breaking their backs to log beetle kill timber that they cant sell.

Oil/Gas. Some of the smartest and savage companies in the world are Oil Companies. They have a history of moving into areas and exploiting the oil with a vengence. If there is so much oil in the Nechako Basin, why has no oil company been their since Canadian Hunter left in the 1980's because they couldnt find anything worth drilling for. Even if their is Oil in the Nechako Basin lets not forget that it stretches from North of Smithers to South of Quesnel so only God knows where the oil will be found if it ever is, and if it is in Smithers or Quesnel why do we feel that Prince George will be the big benificiary.

The CN Rail has been going through Prince George for almost ninety years. BC Rail arrived in the early 60's. There are less trains going through Prince George to-day than there were in the 60's and 70's. Those that are going through operate with a lot less people. CN Rail has been downsizing since the 1970's and has gone from approx 150,000 employees to 30,000 employees, so if you are counting on this company to bring employment to the area do not hold your breath.

The Prince Rupert container terminal will have little or no effect on the City of Prince George, because with all the mills operating at capacity we cannot produce anymore than we are doing now. If you think that we can build a distribution terminal here that can compete with the big boys in Memphis, Ohio, and other areas dream on.

The Prince George Airport has not yet even got to the point where it is considered an International Airport. The Federal Government was in the process of further downsizing this Airport just last year, and has held off for the time being. Most major airlines now stop in Anchorage Alaska, Seattle, Vancouver, etc; If you think you can pull this business away from them and have it come to Prince George ((Lots of luck))

We have to go back to the drawing board if we want to get things going in this town. At the present time, we get out fresh vegetables from California most of the year. Then we get it from Austrailia, or South America etc; We buy our Potatoes from Idaho, Washington, Alberta. I doubt if someone started a potato farm that they would get enough support to keep it going.

We cant even get the local gas companies to give us a fair price for gas, and all we do is complain. This town if high on talk and short on action.
Palopou, Chadermando and owl-you do a great job of laying it on the line and "telling it how it really is."
At the same time, I can understand fully what Free Enterprise means when he says "Some made things happen-some watched things happen, and some said what happened."
I established another business in Prince George in 1987, and at the time had doubts.
An acquaintance said "only a damn fool would build in Prince George now."
That business is still operating-so proof positive even a damn fool can do something right when times are shaky. It was the right time to build. Contracters were hungry, and work progressed as planned-no holdups waiting for material and the job got done.
If one has the finances, there is no better time to build than when the economy is in the tank, and people are searching out work. Amazing how intelligent people will say, "I'll just wait until things pick up." They never will unless the people with money put it to work, and the people with it.
Yes, I foresee some tough times, as this beetle catastrophe will be far reaching.
As for this big oil and gas hype-where are the companies responsible for making it happen?
Read again what the previous posters have said.
The big hype right now will come to an abrupt end-and we will have many saying, "What happened."
Those of us who have been around the board and are aware of these downturns tanking the economy will be safe. We have been there and we can say, "Look at what happened." We worked to safeguard our future.
The majority have a hard lesson to learn.
And believe me, it is coming!
Let the chips fall where they may!