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British Columbia’s Forestry Industry

History:

British Columbia’s forestry industry has a long dated past back to 1778 where Captain James Cooke used the coastal Douglas fir trees from the Nootka Sound to repair his damaged ships masts and spars. The industry and resources up until this point were utilized by the first nations who used these materials for canoes, tools, fuel and clothing. The ways in which the abundant resource were utilized up until 1848 took place on a very small scale and involved local construction projects such as forts and other early settler commodities and basic utilities. These pre-1848 constructions were all completed with hand sawn materials and no mechanization. The first mechanized, operational mill was constructed by the Hudsons Bay Company in Victoria in 1848. As Canada began to develop as a nation, the British North America Act of 1867 was established linking Ontario, Quebec, Nova Scotia and New Brunswick. These provinces joined with the promise of a railway to connect them all. This promise was then guaranteed to British Columbia where the Canadian Pacific Railway (CPR) was guaranteed to be constructed within 10 years to span across the entire country securing the steam powered shipping required for massive quantities of lumber. British Columbia joined as a province of Canada in 1871, and construction began in 1881 and was completed in 1885 (which was 6 years ahead of schedule) offered British Columbia’s immense quantities of natural resources a diverse network that easily transfers to the markets of the furthest Eastern Provinces, or the close direct foreign market located in the United States. Another incentive towards joining Canada for British Columbia’s forestry industry is the "Management and Sale of the Public Lands belonging to the Province and of the Timber and Wood thereon". This means that the Province is able to manage its resources and properties where the resources exist. Various management tactics from the federal government all the way to today establish control over Crown Lands, stumpage fees, and other regulatory acts to prevent the resources from being exploited by private industry. The pre-cursers of the CPR railroad as well as the opening of the Panama Canal in 1914 allowed the British Columbia forestry industry to blossom into a massive industry. The issues of transportation were overcome with the introduction of the railroads, and other steam powered technologies that in turn allowing the harvesting process to move away from the coastal regions and venture inland. The lumber industry became the provinces leading industry and forest products were the staple of the industry. The industry followed the booms and busts of the times, being very volatile to price fluctuations and demand. The industry grew dramatically between 1896 and 1913, but was interrupted by the Great Depression.

1895-1930 Forestry Production:

This era of production was hit with a massive boom and the industrialized process began to take off making record setting levels every year, in “1895 a timber harvest of around 127 board feet supplied by 77 different saw mills operating in BC”. By 1913 the supply was over 1650 board feet and was supplied by 270 different mills. The value of this production was over 33.6 million dollars which had exceeded mineral production for the first time. This achievement confirmed BC’s forest economy as the leading and most valued industry to the economy for the first time. The recovery of the post-war economy saw a decline in demand for forestry production, and did not recover until 1917 where it peaked again at new record setting levels. A steady increase occurred until 1929, where the board feet peaked again at 3300. The great depression offset this growth immensely, causing a heavy blow to the growing industry. The decline hit rock bottom in 1932, where values were one third of the 1929 values and production were back at 1913 levels. Recovery took until the end of the decade where in 1939 production and value both were ahead of 1929 values. The majority of exports (70%) at this time were headed to the UK to support their low cost housing boom.

1914 to 1945 production:

By 1940 the forestry policy set by Fulton Commission in 1909 regulated the timber- leasing and licensing. This commission was changed in 1945 to facilitate the growing industry. First, the industry was expanding and needed more supplies of raw materials and a steadier stream of materials to facilitate the growing size of the industrial complexes. Second, the industry was demanding the Douglas fir trees, and the forest parcels owned by the companies were being liquidated at an unsustainable rate with the increase in technology and capacity. The Sloan commission was British Columbia’s transformation into the Fordist production. This commission outlined large parcels of land to the companies and made them practise sustainable yield rather than liquidation. Sloan states talking about the challenges of changing from “a system of unrestrained and unregulated forest exploitation regarding the forest as a mine to be exhausted of its wealth ... to a system based on sustained yield, wherein the forest was to be considered as a perpetually renewable asset”. Sloan was an innovator that saw sustainable management of resources lead to a sustainable industry for a long time. This commission however completely capitalized the industry eliminating the small entrepreneur who was no watch for companies such as MacMillan who could only afford these massive investments in expensive parcels of land and huge factories to produce goods. Sloan’s recommendation and commission were the basis of the forestry policy in 1947. This commission sealed in British Columbia’s forestry industry into Fordism. It was to be dominated by large corporation have large government influence and large labour unions.

The Forestry Industry Today:

With Forests covering two thirds of the lands in British Columbia (59 million hectares), including 25 million hectares of old growth forests (over 250 years old). 95% of the lands in BC are publicly owned, and just like the 1867 BNA act states these lands are controlled by the provincial government and allocated through the sale of stumpage fees in a heavily regulated system by various forest preservation policies. British Columbia produces about half of all softwoods produced in Canada today. Forestry products account for the most important export for BC, accounting for over 60% in 1995, but down to 30% in 2008. The role of forestry in the economy has taken this rapid downturn due to market conditions and economic crisis, such as the US housing market crash that triggered a huge loss in demand, and value of the products in 2008, dealing a possibly fatal blow to the industry much like the Great Depression of 1932, that took nearly a decade to recover from. The forestry Industry in turn to this drop in production is becoming a less significant part of the economy with a GDP dropping from 3% to 1.5% between 1990 to 2008. The industry has seen great changes in recent years, but as it remains a very volatile industry following the booms and busts of the economy as a whole it is expected to come back. The industry saw in 2010 the sales in exports of raw, unprocessed logs increase 50%. The sale of these logs were off to Asian destinations with 36% exported to Japan, 30% to Mainland China, 20% to South Korea and the US taking a mere 12%. This lack of exports to the US was severed because of the housing market crash. The recent boom in China has created an insatiable demand for raw logs. This volume grew 78% between 2009 and 2010, BC had exported more logs to China in 2010 than the previous 20 years combined. This huge increase in demand for unprocessed logs is eliminating jobs in British Columbia (in material processing) and de-valuing the forestry industry as a whole. A similar trend was stopped by Russia in 2008 as a 25% tariff was introduced on all exports of raw logs to China. This tax was meant to increase processing within the country to make more profitable and processed products (such as processed lumber) which in turn would stimulate the economy and jobs within Russia. This tax however led to British Columbia taking all the needed imports from China, who dropped trade with Russia, thus increasing the volume exported to China to record setting highs. BC’s forest economy has halved since 1991 to 2011, going from 97,149 in 1991 to 46,203 in 2011. This is a direct result from limiting the processing and manufacturing of wood products within the province. From 1991 to 2011, Jobs in the forestry sector have dropped from 7.5% to 2.4%, forestry and log-dropping fell 56%, pulp and paper manufacturing employment fell 69%, and wood product manufacturing jobs fell 40%, total manufacturing shipments fell from 45.6% to 29.4%, and the total share of BC’s GDP fell from 10% to 5%. This drastic change has re-structured BC’s entire economy as forestry products used to serve as 55.8% of the total exports in 1991, now down till 30.4% in 2011. These figures all represent the decline of an industry that has been outsourced to sources of cheaper labor and has lost demand for its processed forms. The British Columbia forestry industry is a dying giant and may soon be just a source for raw materials, as it is being used for at this time.