How Bad Will It Get In Five Years? One Man's Opinion

Wednesday, October 17, 2007 03:45 AM

The Royal Bank has now joined the list of economic experts in suggesting that in about 5 years the rubber will hit the road in the beetle epidemic.

That prediction seems to now be the norm for economists who are taking a long look at the future of this region.

With 75 % of the pine eaten up by the beetles it will become much more difficult in the next few years for those people in the industry to obtain fiber.

Now to answer the question about just how the reduced harvest will affect this area, economists generally agree that 40% of the economy hinges on the forest industry. Want a more local take, local economic expert Alan Idiens, says it used to be about 50% but now you’re safe to say 40%.

The next question is what effect would taking a slice out of the economy have on the region? That seems to be where everyone gets hung up. We are not going to go down with the bath water because it is generally agreed that about 50% of the forestry companies will continue to operate.

Using those figures it makes sense that about 20% of the economy will be affected in this region, more in Quesnel, Mackenzie, Ft St James and other small forest dependent communities.

If you factor in the possibility that we have some mines up and running by that time and they employ about 1200 workers, then the impact on the economy will be lessened.

There is one more piece to the puzzle however that hasn’t been looked at. Prince George feeds on the small communities around us, they represent a large section of our trade and commerce and when you remove that buying power the effect on the economy becomes more severe.

If the provincial and federal government are prepared to shore up the regions most affected, the future may not be as bleak as has been suggested.

I’m Meisner and that’s one man’s opinion.

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Posted on Wednesday, October 17, 2007 03:45 AM in Views by Ben Meisner

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Comments

Posted by: Andyfreeze on October 17 2007 9:41 AM

"Prince George feeds on the small communities around us'...exactly right Ben,and if the smaller forestry based communities hurt,PG hurts.
An economic result that human nature allows us to forget!
Hopefully,the impact will be less than predicted, but let's not hold our breath!
We are going to encounter a change in our economy,job market, and the way we do business in general and there is not much we can do about that,except to look for ways to diversify.
The effects will be far reaching.
Unfortunately,many are only just starting to wake up to that concept including our government.
We all need to get over the denial issue and begin creating new opportunities as best we can.
I also think this would be a good time for towns and citys to begin hanging on to some of that money for the proverbial rainy day,they seem so hell bent on spending with abandon!
That rainy day is not far away!

Posted by: owl on October 17 2007 11:03 AM

The rainy day will be a long one and when the sun comes out, it will not be the same sun. (It will not be fed by forestry, it will be fed by something else and we cannot sit around with our fingers crosses as a responsible reaction) It will be a new sun or two or three which will shine on this and other communities.

You can either wait for those other suns to show up, or you can "build" those new suns through investing time, effort, money.

In my opinion, putting money under the mattress for a rainy day simply does not work in this context.

If you are looking for an example, then look to what some governments as well as large companies, tend to do during such times - they will build capacity for the change which will happen and they want to be part of. Look at all the infrastructure work which went on during the depression as an example.

Here is an excerpt of the result of the �new deal� approach in Ontario as a response to the depression.

�Much like in the United States, the Government of Ontario decided to start numerous Public Works projects (such as highways, dams, bridges, and tunnels) in order to employ construction workers and pump money into the economy. By 1937, the province's unemployment levels began to recede towards their pre-crash levels. It was during this time that the Queen Elizabeth Way, Highway 2A (which would later become Highway 401), and the routes of today's 400-Series Highways were set. During this time, Highway 7 was also paved by hand and man-power from Peterborough, Ontario to Ottawa, Ontario, through some of Southern Ontario's roughest terrain. The Province of Ontario used manpower whenever possible, to employ as many people as it could.�

Posted by: owl on October 17 2007 11:05 AM

Maybe we need to look at Site C in this context. The post Olympic BC.

Posted by: Gofaster on October 17 2007 3:56 PM

Maybe we will be kept busy keeping CN cars upright on the rails?
That still bothers me that nothing has been done, CN has pooh poohed everyone and is sitting back with a smug look.
And we sit back wondering when the next one is going to happen and if it is going to be a big one?

Posted by: Andyfreeze on October 17 2007 5:05 PM

Sure don't want to be in the right hand lane heading east along side the Skeena, between Rupert and Terrace, if CN loses a double stacked car!
Ouch!

Posted by: Harbinger on October 17 2007 5:41 PM

Like I said before, watch Gord Campbell head off to Ottawa soon to get the Feds on side to let us start offshore exploration and drilling. If we find fossil fuels, that could keep 604 comfy for many years to come. Feds get a cut, as always. No trees and a couple of holes in the ground (mines) just won't cut it. It sure saved the Newfies bacon. They screwed up their cod fishery, we screwed up our salmon fishery. Irony or what?

Posted by: Buzz on October 17 2007 6:24 PM

Ben: thoughtful article and quite accurate from my point of view. If you add in some more jobs in healthcare (if we can find more workers to fill upcoming needs/expansions), perhaps some air & ground cargo jobs, maybe the downside of the 'forestry wave' will be lessened. Don't discount the services industries in general continuing to expand...it's extremely hard to hire employees in some businesses and the demand seems to be increasing, not decreasing, for now. It's also encouraging to hear some leaders from PG talking & caring about the surrounding communities and the fact that our local economy is truly regional.......how the Mackenzies of the area do will partially dictate how PG does.