B.C. budget underscores job losses of old-growth logging deferrals

February 24, 2022

By: The Working Forest Staff

Vaughn Palmer Opinion: Despite political rhetoric, NDP approach suggests it considered forestry a dying industry

Author of the article:

Vaughn Palmer

VICTORIA, VANCOUVER SUN  — The New Democrats have played down the consequences of their decision to defer, probably on a permanent basis, the harvesting of 26,000 square kilometres of old-growth forests.

But the impacts are there for all to see in this week’s budget documents.

The province is budgeting for a $700 million drop in forest revenues this year and blaming it partly on reduced harvesting of old-growth.

It is also having to budget almost $200 million over three years to compensate workers and communities hurt by the NDP government’s old-growth deferrals.

The government is projecting a 12 percent drop in the annual timber harvest, from the current 45 million cubic metres a year, down to 39.5 million by the end of the three-year fiscal plan presented to the legislature this week.

“The reduction in harvest incorporates the impact of logging deferrals in old-growth forest,” says the plan.

The government also expects a 33 percent drop in the amount of timber that will be sold to the highest bidders through B.C. Timber Sales.

The revenue impact of these shifts is immediate.

Forest revenue is expected to decline from $1.847 billion in the current financial year to $1.121 billion in the financial year starting April 1, a drop of almost 40 percent. The slide is expected to exceed 50 percent in the 2024-25 financial year.

The government attributes the revenue drop to other factors in addition to the old-growth deferrals, including “an assumed decrease in lumber prices from the historically high levels experienced in 2021.

It also expects a reduced harvest from Crown land as a result of a recent court finding that provincially authorized resource exploitation has infringed the treaty rights of the Blueberry River First Nations.

But the budget also says that the impact of the Blueberry judgment “on the province’s economic and fiscal outlooks are uncertain at this point.”

Moreover, the court judgment was confined to the traditional territory of the Blueberry River First Nations in the Peace River country.

Old-growth deferrals, being spread across the province, are the main reason for the reduced harvest levels.

As well as absorbing hundreds of millions of dollars worth of revenue loss, the New Democrats are having to spend money to help out those on the losing side of the old growth strategy.

Budget 2022 commits more than $185 million over three years “ to bring forth co-ordinated and comprehensive supports to help forest workers and contractors, industry, communities, and First Nations to adapt and respond to the impacts of deferrals.”

The New Democrats maintain that forestry has a bright future in B.C.

But the $185 million package sounds more like something crafted for a sunset industry: short-term employment, retraining, and early retirement.

The New Democrats have lately been using a new analytical tool — known as gender-based plus analysis — “to assess where appropriate the effect of different spending or tax measures on different groups, including different genders, incomes, ethnicities, geographic locations, ages, abilities or sexual orientations.”

They’ve not always made these analyses public. It would be interesting to know more about the groups that are most affected by the old-growth strategy.

The New Democrats say that if every deferral were made permanent, about 4,500 jobs would be lost.

The estimate was derived from a preliminary analysis of the socio-economic impact of the deferrals. But the government has not released the socio-economic report to the public, leaving one to guess about its reliability or limitations.

Even if the projected 4,500 job loss is accurate, the impacts would be disproportionate on forest-industry-dependent communities in the North, Interior, and Coastal regions.

There is also the likely effect of these changes on the investment climate in the forest industry, well-put in an analysis released last year.

“The impact is clearly negative for the B.C. forest industry,” said the report from RBC Capital Markets. “The ongoing forest industry exodus will only accelerate. We suspect that sawmills will pull back on local investments, given the uncertain future of forestry in B.C.

The province has already moved from a low-cost producer to, by far, the highest-cost region in North America.

“The unfortunate thing is that less lumber will make it more challenging to grow the value-added applications, such as mass timber, given that lumber costs will be far higher than other regions.”

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