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Coastal Clarion - Newsletter
Vol.8, Issue 3 · Fall 2012
For over a century, the forest industry on the coast of BC has had a rich history of adaption. We anticipate changes and innovate accordingly. Today, we are embarking on a renaissance, so to speak, that has resulted in the emergence of a new industry which has some lofty goals: to maintain healthy forests, sustainable ecosystems and human socio-economic well-being-all at the same time. This involves an emphasis on investment in new technology, making our sector not only more efficient, streamlined, sustainable and cleaner but also more competitive in the domestic and global marketplace.
According to a recent final report by the Expert Panel on Business Taxation, the province is at a competitive crossroads. It is estimated that as British Columbia transitions from the harmonized sales tax (HST) into a provincial sales tax (PST) world, the BC business sector will pay an additional $2 billion in taxes. In April 2013 - just six months from now, our province’s tax rate on new business investment will become the highest in Canada.
Combine this with the challenges of the world’s financial markets, and this would mean that if we simply go back to the PST, without making appropriate adjustments to the economic conditions of today, the coastal forest industry will be put at a competitive disadvantage.
In April 2013-just six months from now, our province’s tax rate on new business investment will become the highest in Canada. Combine this with the challenges of the world’s financial markets, and this would mean that if we simply go back to the PST, without making appropriate adjustments to the economic conditions of today, the coastal forest industry will be put at a competitive disadvantage
Ours is an export-oriented industry competing in global commodity, specialty and niche markets so we are heavily impacted by tax policy. This is why we made sure we presented our industry’s perspective on taxes this summer to both the Expert Panel on Business Taxation and the Select Standing Committee on Finance and Government Services. Our major focus of the presentation was showing ways to maintain and further build our industry’s competitiveness. This clearly resonated with Expert Panel members because many of our recommendations were reflected in their September report including the introduction of an investment tax credit for machinery and equipment, a made-in-BC value added tax, streamlining the PST and re-examination of municipal taxation.
PROSPERITY 'TO DO' LIST
Coast Forest Products Association works with the Business Council of BC (BCBC) and we read some of Jock Finlayson’s work with great interest. Executive Vice President and Chief Policy Officer for the BCBC, he presented a "Prosperity 'To Do' List for Small Open Economies" on October 23rd, which we believe is right on the mark. Here it is: Prosperity ‘To Do’ List for Small Open Economies.
- Invest in education, skills and human capital
- Ensure that taxes are broadly competitive and well-designed
- Keep government debt at manageable levels, and pursue value for money in public programs /services
- Promote 'smart regulation' across all levels of government
- Reward and incent innovation and entrepreneurship
- Develop and maintain top-notch infrastructure
- Promote trade and open markets
SPECIES AT RISK
Photo: John Deal, Western Forest Products
Photo: Warren Warttig, Interfor
Photo: Warren Warttig, Interfor
To be successful, conservation plans must protect habitat while ensuring the economic viability of the forests that support them is maintained
Industry, scientists, environmentalists and the federal government all agree on one thing—the Species at Risk Act (SARA) is not meeting its objective of managing endangered and threatened species as well as it should. While some are trying hard to preserve the status quo, the BC coastal forest industry is recommending improvements to SARA.
These are based on a decade of successfully managing a host of endangered and threatened species through an integrated ecosystem-based multidisciplinary approach that delivers a balance of both economic and environmental benefits. In its current incarnation the SARA fails to achieve this balance due to a number of major flaws.
Whether we’re addressing ecological, economic, or cultural values across Canada’s landscape, managing species at risk must recognize that the health of the environment and the well-being of people are related and equally important
Whether we’re addressing ecological, economic, or cultural values across Canada’s landscape, managing species at risk must recognize that the health of the environment and the well-being of people are related and equally important. Managing ecosystems and their full suite of values in an integrated fashion is the best means that we have to attaining these two goals. This involves the careful management of ecosystems by focussing on the health of fish, watersheds, biodiversity, soils and wildlife while finding ways to improve human well-being by creating sustainable and economically viable resource industries. Today, the failure to take this balanced approach has delayed protection of species and led to an incomplete recovery strategy implementation.
Developing a multidisciplinary approach to managing species at risk is an essential step to delivering practical and sensible recovery strategies
Developing a multidisciplinary approach to managing species at risk is an essential step to delivering practical and sensible recovery strategies. Currently, recovery strategy teams are made up of scientists with a singular, in-depth though sometimes narrow focus on only one species. A team similar to what the coastal forest sector uses on a voluntary basis today, consisting of academics, biologists, economists, ecologists and professional foresters, would provide broadened knowledge and contribute to a range of multifaceted recovery strategies for consideration by decision makers. In addition, the SARA’s science also needs to incorporate a broader perspective by including best management practices, field experience and voluntary stewardship taken by industry to enhance overall conservation of species at risk rather than relying solely on peer reviewed scientific articles as it does now.
For the SARA to be successful in delivering recovery plans for species at risk it must adopt an inclusive approach that includes socio-economic considerations at the beginning of the process rather than the end (as it is now). Doing so would ensure that decision makers have the opportunity to properly assess the socio-economic impacts and true implications of recovery strategies and critical habitat designations. As it currently stands, the SARA’s single species approach doesn’t adequately factor in cumulative impacts of habitat conservation on resource management or recognize the need to set priorities for recovery action based on both scientific and socio-economic considerations. This leaves forestry companies with increased uncertainty about the land base, and the future for forest workers and communities virtually unknown.
A case in point is the woodland caribou. Conserving the boreal woodland caribou population is vitally important, however, there has yet to be any real analysis of the potential economic impact of the critical habitat designation which is proposed for almost 25 per cent of the entire Canadian land base. The recovery plan does not take into account the economic realities of communities or provinces. To be successful, conservation plans must protect habitat while ensuring the economic viability of the forests that support them is maintained. Our success in BC in protecting species like marbled murrelets, Vancouver Island marmots, spotted owls, northern goshawks, tailed frogs, Grizzly bears and others is evidence that populations of species at risk can be managed well without disabling huge tracts of land.
Our success in BC in protecting species like marbled murrelets, spotted owls, Vancouver Island marmots, northern goshawks, tailed frogs, Grizzly bears and others is evidence that populations of species at risk can be managed well without disabling huge tracts of land
The goal of a recovery plan is to identify and facilitate the implementation of priority actions to ensure the survival and recovery of species and ecosystems at risk. In its current state, the SARA is overly prescriptive, narrowly focussed and is a servant to inflexible legislated planning timelines. SARA amendments should require a system to prioritize species at risk and to address the species that face the most immediate threat. In today’s reality of limited financial and human resources, it makes no sense that the SARA does not prioritize endangered species over threatened ones, or differentiate between sub-species and species.
Finally, even though the goal of the SARA is recovery of species populations, there seems to be little appetite to declare success and remove a listed species once its population has stabilized. For example, the marbled murrelet started out as a species of concern in the 1990s. Listed as an endangered species in 2006, attention was focused on setting habitat aside and accurately assessing the population of this elusive bird. Within three years of these efforts, inventory collection had improved and the population assessments of the marbled murrelet were healthier than expected. Its status was updated to threatened, and there is mounting evidence pointing to the fact that the marbled murrelet is now a viable, stable species and no longer at risk.
BC’s forest practices are recognized as some of the most stringent in the world and our world-leading forest practices and environmental management framework encompass a broad range of stewardship activities, which all contribute to protecting species at risk. Our successful ecosystem-based approach has put BC’s forestry practises at the forefront of sustainability and it can do the same for species at risk.
SPECIES AT RISK
Photo: John Deal, Western Forest Products
Photo: John Deal, Western Forest Products
Photo: Jared Hobbs, Hobbs Photo Images Co.
THANK YOU TO OUR FORESTRY FRIENDS Coast Forest’s President & CEO Rick Jeffrey rode the RBC GranFondo Whistler for the Boys and Girls Clubs of South Coast BC in September, raising $8,000 and finishing the 122-kilometre ride in record time.
"The cause behind this very special ride boosted my motivation to record heights, and I finished the ride from Vancouver to Whistler in my best-ever riding time of 4 hours and 11 minutes," Jeffery says, with a smile.
This is the third time he has completed the Whistler GranFondo, which involves cyclists with a variety of skill levels and includes 1,900 metres of vertical climb, and it is the first year for his “Rick Rides 4 Kids” event. Rick and Coast Forest Products Association have long supported Boys and Girls Clubs, which give children and youth a safe place that provides a sense of belonging, a sense of success, and positive relationships.
Thanks to the many companies and friends who supported "Rick Rides 4 Kids": John Allan, Ken Briggs, Russ Cameron, Duncan Davies, Greg D’Avignon, Don Demens, Lee Doney, Tanner Elton, Forstrom Jackson, Gerry Fraser, Ralph Friedrich, Dominic Gammiero, Alex Grzybowski, Wayne Guthrie, Jim Hackett, Lisa Hill, Daniel Johnston, Hank Ketchum, Jess Ketchum, Les and Linda Kiss, Corby Lamb, Jessica L. McDonald, Sandy McKellar, Keith Mitchell, Rozlynne Mitchell, John and Shaugn Mohammed, Rowland Price, Otto Schulte, Richard Slaco, Andy Smith, Bruce St. John, Tom Syer, Teal-Jones, Lon Temereski, Terminal Forest Products, TimberWest, Heidi Walsh, John Winter and Peter Woodbridge.
Carolyn Tuckwell, President and CEO of the Boys and Girls Clubs of South Coast BC, also thanked Rick Jeffery and his generous sponsors. “This money will make an enormous difference in supporting Boys and Girls Clubs as they continue to grow and provide much-needed support for children and youth in our communities,” she says.
PRESIDENT’S PERSPECTIVE If government adopts these recommendations, British Columbia could have a tax environment that would allow the coastal forest industry to continue to compete with companies outside of BC. If it does not, BC products will be priced higher and our customers will look elsewhere. This would make our industry less attractive for investors and would reduce our capacity to continue to innovate and improve. So far, investment has been directed towards new technologies and products such as bio-fuels, smart papers and green building products. Companies like Western Forest Products and Interfor are increasing the efficiency of their operations by installing autograding technology and high-resolution log scanners in their mills.
These improvements increase efficiency and, therefore, the value of our products, making them more competitive.
The Business Council of BC’s Executive Vice President Jock Finlayson told me this week that "British Columbia is more than holding its own in a turbulent and uncertain world economy." Given this context, the move back to the PST regime must be sensitive to our current context; we cannot just revert to the old 2008 levels of business taxes. Too much has changed since the ‘Great Recession’ and doing so would be analogous to squeezing into your prom clothes 30 years after graduation. They would be an awkward fit, have the opposite impact they did back “in the day” and would constrict to the point of suffocation. Suffocation in our industry means a reduction in competitiveness and a drop in family-supporting jobs.
The reality of our times is that today’s economic climate is new and so is the coastal forest industry
The reality of our times is that today’s economic climate is new and so is the coastal forest industry. Our tax system needs to reflect this and, as evidenced by Don Cayo’s October 12, 2012 column in The Vancouver Sun, even people outside of our sector realize this and are speaking up. The best way to determine where and how to collect business taxes would start with an industry-informed and future-oriented approach. The beneficiaries of this will be all British Columbians.
BOYS AND GIRLS CLUBS BENEFIT
Coast Forest represents forest and paper companies in coastal British Columbia engaged in the harvesting and manufacturing of primary and added value forest products, and pulp and paper products. Together, these companies manufacture 95% of the lumber produced on the coast, 70% of the pulp and paper production and are responsible for 70% of the total harvest. The Association works to ensure that the five coastal species and their product lines have fair access to the global marketplace. Committed to providing leadership to create a thriving forest industry, Coast Forest facilitates cooperation between stakeholders and government on behalf of its member companies.