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Survival the Name of the Game in BC Forest Industry

It just may be that quiet power is the route to survival. Three headlines on page five of a recent edition of the Prince George Citizen newspaper reveal much about the sad state of British Columbia's forest industry. "Skeena Cellulose announces plans to lay off 400 sawmill workers," proclaimed one headline. The Skeena mills at Carnaby, near Hazelton, and Smithers face indefinite closure. When you count in the logging contractors, log haulers, suppliers and merchants in the area's forestry dependent communities, the true impact is greatly magnified. 

The provincial government assured taxpayers in 1998, when it assumed majority ownership in Skeena Cellulose and began injecting the first of several hundred millions of dollars, that it was taking this action to preserve jobs in the northwest. "Unemployed mill staff hold another protest outside of legislature," reads the next headline. This story involves the 220 people out of work at Youbou on Vancouver Island after TimberWest failed to find a buyer for its aged sawmill there. 

The company still has its timber licence but the government is doing nothing to help the dispossessed workers, say their union representatives. Taking their concerns to the legislature is significant. The unemployed forest industry workers know full well that NDP politics is the magnet rigging the wheel of business enterprise in BC. The third headline read: "Forest firms dodging timber fees through loophole, activists say." The piece refers to coastal forest companies grade setting to reduce stumpage payments. The headline reflects two fundamental problems stifling the industry's ability to compete globally, where it must to succeed. 

Regardless of the ethics of grade setting, the story provides further graphic evidence of a redundant and flawed stumpage policy and ideology in BC that serves no one well. The second problem in the headline concerns "activists". Dealing with issues-that are real or perceived and are raised by environmentalists, First Nations or any number of other agenda driven, third party interests-takes an inordinate toll on the ability to stay in business. And that's what it's all about. Survival is the key word. And figuring out ways to be one of the survivors. 

It's a cruel irony that the entertainment business is preoccupied these days exploiting the word "survivor" for profit. Those people in Hazelton and Youbou are on the hard edge of real survival, not a motley bunch of well-paid wannabe stars-for-a-day. (Mind you, entertainment's version of survival does possess a vague and bizarre appeal on one level. For more than 100 years, Canada and the United States have been at odds about the lumber trade between them. The expiry of the latest salvo-the softwood lumber agreement-appears poised to degenerate into another round of countervailing duties. So what do we have to lose in throwing together a team of Canadian and American envoys in some exotic locale and seeing who can out-wiggle whom TVstyle? If Canada prevails, the country enjoys unencumbered free trade. Rulings in Canada's favour under GATT and free trade panels have in reality proven equally artificial.) 

Tough economic times elicit endless rounds of finger pointing and recrimination. But there is within the industry a silent majority. The quiet ones. Companies, businesses and individuals who are enduring the same conditions as everyone else by concentrating on what they can control to best accommodate the impacts of what they cannot. They don't make much noise publicly about it. It's not their style. They usually run the types of enterprise that have habitually prized the value of establishing and maintaining sound business relationships based on respect and performance. 

Those ties become more resilient as the business operating climate worsens. The quiet ones are equally adept at recognizing opportunity and having the gumption and sense of timing to seize it. Possibilities for niche marketing and diversification appear more frequently when the fabric of traditional business practices is consistently stretched, as it has been in BC. One man's ceiling is another man's floor; bad news on one front spells potential on another. The surging price of natural gas has and will continue to cause hardship for business and individuals. But some western US forest companies with a suitable infrastructure are racking up handsome profits generating additional power and selling it onto the grid at generous spot prices. 

In BC, the power cost situation should breathe new life into cogeneration projects that add value to wood residues. BC Hydro has been a stumbling block with its reticence to guarantee power purchase, something it should find harder to justify in an energy cost scenario unlikely to improve significantly in the near term. The wood pellet sector stands to benefit. The enlightened Swedes have long recognized the advantages of the lowly wood pellet as a clean, efficient source of energy. Potential customers closer to home have been decidedly hohum-until now. 

Wood pellets are being re-examined more closely by more people and the bottom line is making increasing sense. All forest companies and value added plants are hopeful external circumstances will improve their lot. A sustained increase in lumber prices will greatly hearten the commodity producers. And there are those resting their hopes in a change of provincial government before June. 

Many are the expansion plans rumoured for kick starting once a different government attitude toward the industry is ensconced in Victoria. But one sound prediction-whatever happens with prices or at the polls-is that the quiet ones will continue to feature prominently among the survivors. And that's also why, if we were permitted a peek at them, the headlines in the Prince George Citizen for early 2002 would reveal the story of a stronger and healthier provincial forest industry. 


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This page last modified on Tuesday, February 17, 2004