An Editorial Opinion – Right From The Stump, June 2, 2023
(A version of the following blog post was originally published as an article in the View From The Stump newsletter, May 2023, under the same title. If you are interested in reviewing the newsletter, please contact me at david@spartreegroup.com. Also, a complimentary full version of the October 2022 edition is available at viewfromthestump.com)
It has been two years since the BC government presented its vision to reshape the province’s forest sector as outlined in its intentions paper, Modernizing Forest Policy In BC. While the government has made several changes where it has direct control, to legislation and regulation, it has yet to achieve its desired reshaping of the industry. In broad terms, that desired change is to get more jobs per tree and generate higher-value products (the proxy of which has become mass timber manufacturing).
A large part of the reason for the industry’s underwhelming response to the government’s vision is the lack of specific direction from government on what exactly it meant by “more jobs and higher value.” This is not a new insight – this was recognized as an issue by the industry from the outset. The apparent minimal progress after two years must be frustrating the NDP political strategists behind these changes.
The irony is that the industry recognizes that change is needed in order to continue operating in this province. Even without policy changes, there are various pressures driving decisions to shift paths including a declining BC Interior timber supply, wildfire management and need to grow relationships with First Nations to name a few. However, with the added uncertainty of policy changes layered on top, the industry is overwhelmed and is suffering from a recipe for gridlock.
The Premier needs to know that his government’s “plan” is not a plan – attempting to address “everything, everywhere, all at once” approach makes it ineffective. To put the situation into relatable words using a Ted Lasso-est analogy, the forest industry is being told to play a game of soccer. While it is recognized the ball needs to be kicked towards the opponent’s end of the field (as an intention), there are no goal posts to score through, as such the industry does not know when it has scored.
Without an overall plan with goals, the forest industry is left in paralysis and has no ability to move forward with investment to drive the government’s desired change. The forest industry does not know when change has succeeded. From a politicians’ perspective, having no explicit goals is a conservative approach as it means no accountability. Unfortunately, the industry’s frustration mounts, and capacity continues to retrench.
COFI 2023 – LOOKING FOR MORE – Attending COFI 2023 in Prince George last April, I felt the palatable craving by many in expecting greater direction from Minister Ralston and Premier Eby in their keynote speeches – unfortunately, there was little offered, which to be honest, was disappointing. However, Eby and Ralston did not come empty handed:
Minister Ralston made a commitment to provide LiDar coverage for 100% of the province – a smart and productive move, although it may be sometime before this information tool becomes available.
Premier Eby acknowledged that improvements were needed for the permitting process and will be hiring more staff to deal with the backlog. I hope that the Premier will be effective in making this happen as it is sorely needed. It would have been a more impactful commitment if it had included some milestones or goals such that future permits would be processed within maximum 60 days to boost the industry’s confidence.
There was also a very subtle “soft announcement” by the Premier for the creation of regional tables across the province to discuss fibre supply for the value-added sector.
The last of these announced commitments is probably the most relevant to furthering the government’s desire for change. These tables should be useful in providing forums for discussion and hopefully progress in addressing the vexing issue of sharing a shrinking fibre supply. While still early days, it will be important to establish what are the end goals to this effort. How will these regional tables know when they have failed or succeeded?
DIRECTION FROM THE TOP – While they have tried to reshape the industry, it must also be frustrating for the NDP government to know that under their watch (since 2017) there has been 25% reduction in the province’s sawmilling capacity so far, and timber harvesting is on a trend to be reduced by half by the end of 2024. Impressive stats but sadly for all the wrong reasons. To say that the BC forest industry is in crisis mode is a vast understatement and cyclical markets cannot be used as a scapegoat this time.
Reshaping, or whatever the direction, there needs to be clear direction from the top. When 95% of the land in this province is under the direct purview of the government, that means comments by the Premier are impactful for instilling confidence in where things will be going. Unfortunately, the messaging from Premier Eby has been extremely mixed and industry confidence is very low.
One week the Premier is saying our province has “poor forest management practices” (Apr 6, A Town Hall Q&A) and in the next is saying…
“I don’t see how you can have a prosperous and successful province without a prosperous and successful forest industry.” (Apr 14, COFI).
Maybe these latter encouraging words came from being in the moment as the Premier spoke to a large audience of industry folk, it’s hard to say, but I was almost convinced that the top political leader of this province was beginning to recognize the relevance of the forest sector to the economic sustenance of British Columbia.
Unfortunately, then came Vaughn Palmer’s opinion piece that quoted the Premier lashing out with a misguided threat during a news conference in early May (Eby warns forestry sector to fix its problems or government will, May 5, 2023). And once again Premier Eby was saying…“frankly, mismanagement of our forest resource…”
Not to belabour this mixed messaging issue, but then the Premier subsequently wrote a glowing letter about British Columbia published in BCBusiness that stated our…“natural resources sector has been – and always will be – foundation to the economy of our province.” The letter boasted of several mining projects (an extractive resource sector) as well as being “cleanenergy superpower” etc., but it distinctly did not mention the province’s truly green renewable natural resource: forestry. What’s up with that?!?
And finally, a BC government news release on May 25th announced a trade junket to Asia, which stated, “The Premier and Ministers will also promote BC as a jurisdiction that values high environmental, social and governance (ESG) standards, supports high-performing organizations.”
Once again, the news release mentions natural resources, renewable energy, and critical minerals, yet there was no explicit reference to forestry or for forest products. Nonetheless, how can the Premier a couple of weeks prior say our forests were “mismanaged” but then claim we have high ESG standards? (FYI we do have high standards, and not only that, the vast majority of forest management in BC has been third party, independently verified to be certified as sustainably managed).
As it seems, when the Premier’s messaging is for the general electorate, it tends to be negative on forestry and if it is for the industry/ investors/ potential customers then the message is more benign. Should the Premier truly want a forest industry in the province, my strategic advice is to tell his political communications staff to be at least consistent in messaging. Also, after six years in power, blaming the BC Liberals of the past for the current industry’s woes is wearing thin.
WHAT COMES NEXT… Back to the Ted Lasso analogy – the ruling NDP party is this soccer game’s referee – they decide if a goal has been scored because there is no way to say otherwise.
Vaughn Palmer wrote that the Premier was lashing out over frustration with yet another significant sawmill curtailment, saying the Premier threatened the industry to make change. The trick is no one knows exactly how much or what change will be enough before the Premier makes good on his threat.
My highly speculative interpretation of the Premier’s comments is that they were not a threat, but rather a foreshadowing of a predetermined non-public plan. It is similar to then Premier John Horgan saying at COFI 2018 - make changes or his government will, which was a set up for the industry to fail because there were no metrics or goals specified as to what those changes should be for industry to aspire towards. And so, government stepped in with Modernizing Forest Policy in BC.
Now Premier Eby makes the same threat, without the industry knowing what success means and therefore likely to suffer the consequences. However, this time, the groundwork for the consequences have already been laid out with changes to the Forest Act (rammed through in November 2021), positioning the government to begin forced tenure redistribution as outlined in its intentions paper. I could be wrong on this, but from my view, it certainly is plausible based on what has happened so far, especially as there is minimal political risk to radical change.
Politics aside, problems like those facing the BC forest sector can be resolved when there is decisive and clear direction with measurable, transparent goals. A vision to be implemented and expected to bear results within a four-year election cycle (or less) is not realistic given the size and complexity of the forest sector. A good first step that would hopefully withstand political pressures and help move the necessary conversations forward is having a forest sector economic strategy supported by all that rely on British Columbia’s forests…otherwise the Recipe For Gridlock will continue as evidenced by the closures of Canfor’s Houston sawmill and subsequently Brink’s Pleasant Valley Remanufacturing.
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Written By David Elstone, RPF
Publisher, View From The Stump newsletter
Managing Director, Spar Tree Group Inc.
david@spartreegroup.com