Lawrence Solomon
National Post
March 21, 2000

They have the power to crush destructive forestry firms

The eco-extremists are poised to win their biggest battle yet over British Columbia’s vast forest lands. But the eco-extremists aren’t environmental groups. The extremists are the B.C. government and major forestry companies who are hell-bent on destroying the splendour of the province’s landscape, even if they must do so at a loss.

After years of organizing boycotts on both sides of the Atlantic over forest products, Greenpeace, Rainforest Action Network, Sierra Club of B.C. and other environmental organizations sent the forestry industry reeling last August when Home Depot announced its home-improvement stores would stop selling wood products from “environmentally sensitive areas” by the end of 2002. Ikea and others have also joined this green revolution. The forestry companies, with the B.C. government as their silent partner, decided they had no choice but to negotiate with the enemy, despite the bad taste that left in their mouths. According to leaks from behind-closed-door negotiations that have taken place, before this month is out six major B.C. timber companies — Weyerhaeuser, Canfor, and Fletcher Challenge Canada among them — will have agreed to an 18-month logging halt in B.C.’s hotly contested coastal areas.

The strategy — used successfully by industry and governments elsewhere — involves co-opting environmental groups by giving them a seat at the table. The government would agree to set aside the pristine valleys that environmental groups especially covet, and the environmentalists would effectively sacrifice much of the rest.

At first glance, this deal seems a compromise between the needs of the environment and the needs of the economy. But the environmentalists have not compromised. Not recognizing the strength of their bargaining power, they have capitulated. The economy does not need the forestry industry; as it currently operates, in fact, the economy would fare much better without it.

Canadians look at our tall, majestic pines, remember our heritage as hewers of wood, view the recurring pitched battles between loggers and environmentalists in the nightly news, and assume that forest resources represent a towering part of our economy. Toothpick is more like it. According to Statistics Canada’s latest figures, the logging and forestry industry — for all the devastation it causes — only account for about one half of one percent of the national GDP. To make that one half of one percent happen, our governments spend more than $2-billion annually in direct forestry subsidies, about what they receive in stumpage for the trees, and several times as much in indirect subsidies. That makes logging a great cost — not a great benefit — to forested provinces and to the country as a whole.

It gets worse, because forest-related subsidies are deeply rooted. Manufacturing industries that use forest resources, such as various wood products and pulp and paper, are also heavily subsidized, and not just by receiving below-cost timber. These industries, which account for another 1.5% sliver of GDP, receive tax breaks and other subsidies, most recently the $100-million that the Quebec government gave pulp mills in its budget last week. To these multi-billion dollar hard costs must be added the real but impossible-to-calculate environmental costs that come of deforestation, pulp mill pollution, soil erosion and the loss of plant and animal species.

And what does Canadian society have to show for these extreme economic and environmental costs that we are expected to bear? PricewaterhouseCoopers tells us in its annual audit of the private sector operations of the forestry and forest-related manufacturing industries.

These industries’ return on capital was only 4% over the last decade, the same as a risk-free investment in Canada Savings Bonds over the same period. The industry’s total net profit came to a mere $432-million in 1998, the last year it audited, down from $460-million the year before, and $804-million the year before that. Those sums represent the totals from all the logging, pulp and paper, wood products and other companies in the forestry and forest manufacturing sectors combined, from the smallest firms to the Canadian operations of Weyerhaeuser, the U.S. giant that recently swallowed MacMillan Bloedel. For every dollar that shareholders in Canada or abroad earned, Canadian taxpayers contributed many.

Once the majestic trees are gone, the land’s highest economic value disappears. Tourism industry surveys show nature travel growing at double-digit rates. One analysis of tourist motivations found that 40% to 60% of all international tourists are nature tourists, and 20% to 40% are wildlife-related tourists. Regions that can offer true wilderness experiences become scarcer by the day. Yet instead of preserving our irreplaceable treasures, both for their ability to inspire and for their wealth-producing potential, we desecrate them.

The forestry industry’s position is blunt. And it is extreme: “Forget that we haven’t been profitable, even with all the breaks we’ve been getting. Just give us your trees and give us your money and accept that we’ll leave mayhem behind. And to show our appreciation, you take your pick of the prettier valleys — don’t mention that they’re yours to start with.”

The government’s position — “that sounds good to us” — is just as extreme.

Now that the environmentalists are prepared to strike a deal, government and industry will also be able to add: “We gave you what you asked for in our secret negotiations. Now leave us alone.”