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BC forestry facing a tough year


January 8, 2008
By Pulp & Paper Canada

Prince George and Port Alberni, BC — Prince George and other forestry-dependent communities are in for a rough yea…

Prince George and Port Alberni, BC — Prince George and other forestry-dependent communities are in for a rough year, reports the Prince George Free Press. Council of Forest Industries president and CEO John Allan noted that the 15% export tax on B.C. lumber going to the U.S., poor American housing start projections and the high Canadian dollar are all hurting the B.C. forestry sector.

“Well, unfortunately I think we’re going to see more (sawmill) cutbacks and curtailments,” Allan said last month. “The forecast for housing starts next year is pretty dismal. It wont be until the end of next year (2008) we will see some recovery.” He added: “A one cent rise in the dollar… takes $150 million in sales value. Since 2003 we’ve lost $15 billion in sales revenue because of the appreciation of our currency.” Sawmill shutdowns and curtailments will create some longer-term issues for the industry to deal with, he noted, and companies will face issues such as customer loyalty, chip supplies to the still-profitable pulp mills and worker retention.

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Greg Halseth, director of UNBC’s Community Development Institute and Canada research chair in rural and small town studies, believes that Prince George is better positioned to weather the downturn than many surrounding communities. The Northern Development Initiative Trust, Initiatives Prince George, beetle action coalitions and 16-97 Economic Alliance are tools that give communities more options to diversify. “They’re not simply waiting for the forest industry to recover,” he said. “Chetwynd is ahead of the curve. It’s already moving to diversify its economy in a number of sectors. Prince George is an even more mature example of a diversified economy.” Prince George has grown from a forestry town in the 1980s and earlier to a retail, government, healthcare and education centre in the North, he noted.

On Vancouver Island, the Alberni Valley Times notes that 2007 was a difficult year for workers in the forest industry there. Catalyst shut down the PM4 at the Port Alberni Paper mill at the end of August, resulting in the layoffs of some 185 workers there. While there is some hope that the machine may start up again in the spring, a decision is only expected in late January. The three-month Steelworkers Strike also affected the local forest industry, and the weak support for the deal the union ultimately passed suggests division and a lack of confidence in the industry.

In his recent address to city council, Mayor Ken McRae talked about the Port Albernis transition from a “traditional resource-based community to one with its economy diversified to include new revenue streams and businesses, including tourism, outdoor recreation, heritage, sports, the arts, home-based businesses, new wood products, value-added and the high-tech industry.”

Sources: Prince George Free Press, Jan. 4, 2008 and the Alberni Valley Times, Jan.1, 2008.


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