Overhaul Canada's Pacific forest industry - report
Date: 20-Dec-01
Country: CANADA
Author: Allan Dowd
Timber producers must replace obsolete mills with new facilities, but
will not be able to raise the needed investment dollars because their
current operations are not earning enough to cover the cost of capital,
the study said.
"In my view, the forest industry is in very bad shape and is getting
worse," said Peter Pearse, a respected natural resources expert who
prepared the report for the British Columbia government.
Pearse said the coastal region of Canada's largest timber producing
province suffers from excess capacity, outdated regulations and
production costs that are 40 percent higher than the international
average.
Eleven major sawmills in the region have closed in the past decade, but
as many has half of the 47 surviving mills should also be allowed to
shut down so new facilities can be built, according to the report.
"If we're going to have an efficient system... we cannot maintain the
current capacity of these old and out-of-date (mills)," Pearse told
reporters following the release of his report in the provincial capital
of Victoria.
British Columbia owns nearly all of the province's forest land and
leases logging rights to private companies under a byzantine regulatory
system that can even dictate were specific trees are milled.
Pearse agreed with other industry critics that the rules force companies
to keep open unprofitable mills, because logs cannot be shipped to
alternative facilities. "These mills are now in the wrong place," he
said.
British Columbia's Liberal Party government has proposed eliminating
regulations that tie mills to specific harvesting areas as part of a
settlement in the softwood lumber trade fight with the United States.
The study also chastised the industry for allowing its technology and
marketing practices to become outdated, and failing to address
international concern that its logging practices are environmentally
destructive.
The industry has long depended on logging in old-growth forests, but
Pearse said new mills are needed to handle the transition to using
younger, second-growth trees.
British Columbia Forestry Minister Mike de Jong said the province is
ready to act on the industry's problems. "Our unwillingness to address
these policies has landed us where we are today," he said.
De Jong acknowledge that changing the current policies will be
"painful," but warned that doing nothing will force the industry to
"wither and die."