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Forest revenue well down from initial forecast |
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Written by Citizen staff
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Monday, 24 November 2008 |
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After predicting in its first quarter update that revenue would be off $262 million, the Ministry of Finance said it would be down a further $38 million in the second quarter update for the 2008-09 fiscal year.
Weaker lumber markets and the beetle infestation are expected to reduce both volumes harvested and average stumpage rates, offset partially by a lower Canadian dollar, according to the update.
Forests MInister and Prince George North MLA Pat Bell said the government is trying to be prudent with its revenue projections and make sure nothing is overstated.
"We've seen what happened in 1996 when the NDP government of the day far overstated their revenue projections," Bell said. "People called it the fudge-it budget."
The province moved to a more market-based stumpage system in the Interior in 2006, with rates derived from open log auctions through the B.C. Timber Sales program.
The move fulfilled a B.C. Liberal election promise from the 2001 election and was also in answer to U.S. allegations provincial timber pricing systems subsidize Canada's industry.
"We think we are getting fair return on the asset at this point," Bell said. "It's very challenging times at this point in the industry and we have no interest in revisiting the stumpage rates looking for increases at this point."
A similar downturn even a decade ago would've had a much worse effect on the region said Bell, who noted unemployment in Prince George was 16.8 per cent in 1998, "and that was in a time that arguably wasn't that bad around the world economically."
As of October, the city's unemployment rate was 6.9 per cent.
"The fact that we've been able to maintain reasonable employment levels, people are still working, they're making money, they're able to sustain themselves is a testament to the diversity that's been created," said Bell.
"The mining sector, the education sector, the health sector, the oil and gas sector are all helping drive to help our economy and continuing to support forestry through a tough time."
But NDP forests critic and Cariboo North MLA Bob Simpson said the worst is yet to come as commodity prices start to plummet. As for improving revenue at the Ministry of Forests, Simpson said the government needs to break the stranglehold major lumber producers have on the land base and free the fibre up for new uses and put a greater emphasis on hardwood.
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Last Updated ( Monday, 24 November 2008 )
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CEEripes Pat, you've worn the dam NDP did it record clean out.
Even a child could've seen this coming and yet your government just gave out 60% salary raises to keep the best people on staff??? Laymen were predicting this coming recession/depression 2 years ago.