B.C.’s forestry industry’s woes impact on economy

Friday 28 Jun 2019

Battered and bleeding, the B.C. lumber industry has seen better days. Today, it is grappling with tough market conditions, a diminished domestic timber supply (along with rising fibre costs), U.S. softwood import tariffs and a lack of provincial government interest in doing much to improve the competitive environment.

That is worrisome. Forestry – of which lumber production is the largest component – is a high-wage industry that remains the mainstay of regional economies across the province, particularly outside of the Lower Mainland and Greater Victoria.

The activities across all segments of forestry combined account for billions of dollars of B.C.’s economic output (GDP), provide direct employment for more than 50,000 British Columbians, and pay $4 billion a year in taxes, royalties and fees to various levels of government. Tens of thousands of additional B.C. jobs also depend on forestry because of the industry’s extensive linkages with other sectors of the economy.

Then there is forestry’s outsized role in B.C.’s exports. British Columbia is a small jurisdiction that must trade to ensure its economic well-being. Exports of goods and services amount to about one-third of the province’s GDP. These exports furnish the economic means that enable households and businesses to pay for imports of a wide array of goods and services – everything from vehicles, medical devices, pharmaceutical products and IT equipment to consumer electronics, clothing and many foodstuffs.

As a small economy, B.C. needs to pay close attention to the health of its “traded industry clusters,” the industries that produce goods and services for sale outside of the province.

Today, despite its manifold challenges, forestry ranks as B.C.’s biggest traded industry, and by a significant margin. While B.C. boasts an increasingly diversified economy, forestry continues to generate 30% to 35% of the earnings that B.C. garners from selling goods abroad. The softwood lumber business alone cranks out exports of $6 billion every year – at least 10 times the value of exports from the “clean tech” industry that fascinates so many of our politicians.

Forestry’s contribution to B.C.’s exports hasn’t fallen, even though other industries – e.g., energy, agriculture and high technology – have gained a higher profile over time. Indeed, if anything, forestry’s place in B.C.’s merchandise export mix expanded slightly over the 2009-17 period. More >>

Source: biv.com

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