Pricewaterhouse Cooper's - Unrealized Potential Report

Forestry Can Drive BC Economy Higher
VANCOUVER -- A PricewaterhouseCoopers report shows that BC's forest industry can create thousands more jobs and drive the provincial economy to new heights if it can shed the chilling constraints of excessive costs and regulation that characterized the 1990s.

The report -- "The BC Forest Industry -- Unrealized Potential" -- was released today by Council of Forest Industries (COFI) President Ron MacDonald during a speech to the Canadian Club in Vancouver.

The report graphically demonstrates that there could have been, and can be, profoundly positive impacts on employment, the economy and government revenues if the forest sector enhances its competitiveness and achieves higher, sustainable harvesting levels.

MacDonald said: "Our members have a vision for change that makes the industry globally competitive, environmentally sound and the most vital contributor to BC's economy and its way of life. One of the keys to this vision is an allowable annual harvest that grows on a sustainable basis rather than shrinks."

He added: "The PricewaterhouseCoopers report graphically illustrates that the benefits of this vision are dramatic and we are placing that vision of growth before the citizens of British Columbia."

PricewaterhouseCoopers spokesman Mike MacCallum said: "Our report shows that BC's sagging economy in the late 1990s was directly linked to regulations and policies that rendered the forest sector noncompetitive.

"It also shows that simply harvesting to the actual Allowable Annual Cut (AAC) set by government would have created thousands more jobs and injected millions of new dollars into the provincial economy."

The PricewaterhouseCoopers report leaves no doubt about the causes of the forest industry's diminished competitiveness in the 1990s:

1. Profitability of the BC forest sector did not keep pace with forestry in the rest of Canada.
   
   
2. That difference in profitability was almost entirely due to increased fibre costs in BC.
   
   
3. Fibre cost increases were the result of increasing regulation, increased stumpage and lower supply.
   
   
4. Lack of profitability, onerous regulation and reduced harvest severely impacted employment, production and capital investment.
   
5. The relative decline in forestry profitability had a direct correlation to BC's economic performance during the decade.