What is future of forest industry?

Posted on July 5, 2007
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The New Brunswick forest industry is in melt-down mode. A combination of dwindling pulp and newsprint markets, a US housing slump, a growing Canadian dollar, high energy costs and third world competition is sucking the industry and its high paying jobs down the drain.

To some extent, we could see it coming. We’ve known, or should have known, for years that the days of wood fibre being most valuable in pulp for publishing were almost over. From the time someone hops in a half-ton to go to the woods to cut down a tree to the time a newspaper or flyer goes plop on your doorstep, a fearful amount of energy is used up.

Printing and publishing are quite labour-intensive too. Imagine you are in charge of flyer distribution in Calgary or Grande Prairie. Where and how are you going to get the people you need?

Daily newspapers also have to contend with the time between when they prepare a story and the time it reaches a reader. The world has developed an electronic nervous system. Young people are even developing an aversion to being responsible for the disposal of printed material.

It was quite predictable that media not subject to those challenges, TV, radio, the internet, would have an increasing advantage. Those industries face their own frightening challenges (fragmented audiences) but zooming energy costs are not among them.

The tree huggers arguing for maintaining the diversity of the Acadian boreal forest now appear to have been financially as well as ecologically wiser than government, industry and labour.

In the building supply part of the forest market, there are different but similar pressures. Oriented strand board has replaced plywood as a sheathing product. The steel industry has moved in on the stud market. New, much larger, OSB mills are being built in cheaper markets.

The current collapse of local industry hurts all local business. Forest industry employee wages have been the heart blood of the New Brunswick economy for longer than any of us has been alive.

First, and most seriously hurt, of course, are the mill and forest workers. It naturally bothers them to see wood they used to process sent out of province, out of country and even out off continent to provide wages for other workers. They would like to see all raw wood exports banned.

From a government perspective, there are a couple of problems with that. While they could ban harvesting on Crown Land, that would probably mean losing a lot of forest management money and employment from the lessees. Government would have a harder time telling a property owner he can’t sell his wood. Even if they could and did, that would add another waterfall to the torrent of lost income. Truckeres are just one huge example.

In the long run, I believe there will again be great value in the New Brunswick forests. If the Chinese and Indian markets continue to grow as they are, demand will build to the point where our wood will be precious for something.

In the short run, the prospects look grim and government will have to find a way to help as many displaced workers as possible tread water until some salvation can be found. Sadly, we will lose many trades people to other industries and regions in the meantime.

In the medium term, our small and species-specific mills will be obsolete and probably won’t be part of any renaissance.

The trick will be to develop a short, medium and long term plan to be ready for the next generation of opportunities.

One element must be to get as many people out of the industry as possible. Whatever is next will be more productive and won’t require as many people with the current skills.

Another element will be urgent diversification. I may be kidding myself because I love the Maritimes and the Miramichi so much but I believe we ought to be able to attract thousands of people to come here with money to retire or visit for six months at a time.

People with pensions that would be enviable here don’t have homes in Calgary. They live in apartments and are receiving letters from their landlords saying their rent is going up $1,000 per month. Surely they’d like to own a home here.

Snowbirds leave here for Florida every winter but they don’t stay there. No one wants to be in Florida between May and October. Many Floridians go to the mountains and hills of Mexico to escape the heat and humidity.

Surely we could enourage many of them to come here for six months. Their health insurers would love it because our medical care is so much cheaper, especially drugs. They could have lovely weather and the distinct possibility of being here the entire six months without being shot at by anyone!

Europeans can’t believe the value in residential land they find here.

New training for new skills, a return to the original diversity in the forest and the recruitment of immigrants could be elements of a hopeful future for this magnificent region.

On we go!

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