Back in the early 1980s, I was heavily involved in spelunking. One of our trips was a weeklong exploration of a cave system in southern Montana working with an American group of cavers.
One of the individuals I met through this trip was a forester working in the state of Washington. He took me out to his job site. He explained how the company he worked for owned the land on which it grew its trees and as a consequence had to invest in both maintaining and regenerating the forest.
The only way the company could ensure its future was by taking care of its forests today.
He went on to point out in British Columbia, it is done differently. Companies don't own the land. It is owned by the Crown. From his perspective, no one is directly responsible for maintaining the forests nor for ensuring trees are replanted after harvest. B.C. forests, in his opinion, are unmanaged and that was a significant economic advantage.
He felt it was unfair.
I didn't know enough about the softwood lumber dispute or B.C. forest practices at the time to debate with him. Indeed, I make no claims to be anything other than a casual observer in the whole, long, protracted, and bitter softwood lumber dispute between the United States and Canada.
However, with the expiration of the most recent agreement last year and the one year standstill period expiring last week, the Softwood Lumber Agreement (SLA) will once again be making news and affecting our communities.
To put it simply, the expiration of the SLA will have a major impact on Prince George as we are dependent on the forest for much of our primary wealth.
Indeed, the entire province will feel the impact as lumber exports, in 2015, amounted to $5.9 billion or 16.4 per cent of the $36 billion in commodity exports from the province. It is a substantial part of the overall pie.
But Peter O'Neil and Rob Shaw, writing in the Vancouver Sun, pointed out "Economists say Metro Vancouver is largely insulated from the economic impact, thanks to growth in sectors like housing construction and high tech."
They go on to quote Jock Finlayson, executive vice-president of the Business Council of B.C., saying "Much of the growth we are seeing in B.C. is urban-based, and urban areas of the province will not feel much impact from the reduced logging and lumber production. The interior and the north will feel most of the pain."
Other than the unintended swipe at an urban centre such as Prince George, the point being made is the SLA dispute is not likely to light up the radar in Vancouver and the Island.
Prince George will feel the pain but not Vancouver.
What is perhaps missing from these analyses is that despite all of the advances in service based industries (and B.C.'s labour market is now 80 per cent service based), the foundation of the economy rests on real industrial output.
This is a point which has been made over and over again. It was a central theme of the B.C. Progress Board reports from a decade ago.
The wealth of this province is built on its ability to export raw materials.
As forestry, agriculture, mining, energy extraction, and fishing goes, so goes the province.
Yes, we have a vibrant film industry and certainly the high tech sector has done very well. However, neither of these industries is place-based. They could just as easily shift next door to Alberta or halfway around the world to Sri Lanka. Nothing holds them here other than capital investments. From a labour perspective, many of these industries could do much better in other jurisdictions.
This is the underlying lesson of globalization. In the battle between resources, labour, capital expenditures, and market access, one will triumph and industry will move as needs be to take advantage. Indeed, this is what Donald Trump means when he says that as a business man, he takes advantage of the situation.
Renegotiating the Softwood Lumber Agreement or coming up with an alternative solution is critical for the economic health for British Columbia and one could argue for the country as a whole.
It is certainly an issue taken very seriously by our local MP, Todd Doherty.
He will likely need to keep pestering the government until a deal is done.
As a closing note, the scary aspect of the SLA arises from the American election. Both candidates seem to now be committed to protectionist policies - to re-examining trade deals. Are they likely to go after NAFTA or the Trans-Pacific Partnership? No. These deals are "too big to fail."
But the SLA? Yes, there is a winnable treaty from the American point of view which would allow the new president to appear to be tough on trade.
As a consequence, Prince George may suffer no matter who wins.
