(The following article is from the July 1-31, 2008, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)
By Kimball Cariou

How catastrophic is the downturn in the west coast forest industry? It's so bad that B.C. forests minister Rich Coleman can't keep track of the dozens of mill closures and over 11,000 jobs lost during the past year.

     Demands keep mounting for the resignation of Coleman, an ex-RCMP officer who clings desperately to his free market ideology as forest-based communities sink into crisis.

     One of the minister's worst days came in early May, during question period in the provincial legislature. Taunted by NDP MLAs about the industry's woes, Coleman was reduced to babbling that perhaps the opposition members "don't like" the employees of Western Forest Products, the province's biggest forest company. After all, he said, despite heavy criticism from workers and environmentalists alike, WFP had "seven mills operating, three re‑man (wood re-manufacturing) mills and 17 logging operations going on Vancouver Island right now."

     On that same day, the company laid off almost 1000 loggers and contractors. No less than six of the 17 operations cited by Coleman faced closure before question period began the next day.

     Coleman's response? "On Vancouver Island there are seven sawmills and three re-man plants run by Western Forest Products." This bluster came just two weeks after WFP's decision to close its Ladysmith sawmill indefinitely, blaming a drastic drop in U.S. housing construction and the recent surge in the value of the Canadian dollar. Then on June 19 came news of further WFP layoffs in anticipation of falling cedar sales.

     At the heart of this bust is the economic turmoil south of the border, where the sub-prime mortgage crisis is one of the factors devastating the U.S. housing industry. Despite bland reassurances from the Harper Tories that the U.S. recession won't affect Canada, the impact is already a reality here, and things will probably get worse. Lumber prices, which collapsed in late 2006, are expected to remain depressed for at least another year.

     For the moment, official unemployment rates still seem relatively low for British Columbia, with a jobless rate of about six percent. But Canada's jobless numbers are skewed by statistical sleight of hand, such as not counting those who have given up looking for work.

     The nature of work is also changing. Jobs in west coast primary and secondary industries such as wood and forestry are disappearing fast. There is a breathtaking shift from higher-paying employment in smaller towns (the "heartland", in Premier Gordon Campbell's election terminology), to poverty-level jobs in the Vancouver region. The process has been accelerated by the latest cyclical crisis in the forest industry, leaving many communities in chaos and despair.

     There was a time when logging and related industries were called "green gold," the solid foundation of B.C.'s rapidly-growing economy, based on the exploitation of unceded Aboriginal territories. Mining and fishing were also major contributors to the provincial gross domestic product, but forestry stood supreme.

     Times have changed. Looking at 2007 figures, B.C.'s gross domestic product was $150 billion. Forestry and logging accounted for just over $3 billion of that amount, or 2%, down from 2.9% in 1997. Over those ten years, employment in this sector fell from 32,200 to 24,300.

     Wood, pulp and paper, and related sectors saw a smaller decline in relative importance. The total GDP for these industries was about $6 billion in 1997 (5.5% of the provincial total), rising to $7.2 billion in 2007 (but just 4.8% of GDP). Employment in wood products fluctuated around 44,000 during that decade, while paper manufacturing jobs fell from 23,100 to 15,200.

     In this context, 11,000 layoffs amount to one in every eight forestry-related jobs. Some of the layoffs are temporary, but the negative spinoff is also huge. The forest sector still accounts for over one-third of B.C.'s export earnings, and an estimated 250,000 jobs depend on the industry.

     Some workers are fighting back. On May 23, over 1,000 people held a "Save Our Community" rally in Mackenzie. Every major mill in this town of 4200 people north of Prince George has now been closed, putting unemployment at about 80%. The rally passed resolutions demanding an extension of EI benefits to towns hit by catastrophic job losses, and the preservation of provincial spending on infrastructure such as schools and health care facilities.

     On a wider scale, the United Steelworkers (which represents most loggers and many other forestry workers since absorbing the IWA several years ago) and other unions and environmental groups have been campaigning for drastic changes in provincial policies over the industry.

     As Steelworkers Western Canada director Steve Hunt said back in January, "Since Gordon Campbell took power in May 2001, there have been over 20,000 industry jobs lost in the mills and woods, including the permanent closures of at least 43 wood‑processing facilities... The unwritten future legacy of the Campbell government promises to be the hollowing out and destruction of the BC forest industry."

     Other sources of the crisis are varied, including the mountain pine beetle devastation. But Hunt notes that since the Liberals took office, 30 million cubic meters of raw logs have been exported from BC, benefitting competitors in the U.S. and other countries. The union estimates that six percent of the total provincial harvest is now shipped out as raw logs, "enough to run ten good-sized sawmills." Workers and their families watch in dismay as an unending stream of logging trucks exports their jobs. Years of demonstrations and political pressures have failed to move the Liberals, who face falling voter support in many "heartland" ridings.

     Liberal "solutions" include giving forest companies a competitive edge by reducing the time between rotations, which inevitably results in lower‑value fibre that is only useful for pulp. Shorter rotations affect the long‑term sustainability of the forest sector, and the continued logging of old growth forests is also unsustainable.

     Another Liberal policy has been to loosen restrictions on tree farm licenses, allowing corporations to turn forests into real estate developments. The outpouring of public anger may yet limit the extent of this change, which rips up the historic deal requiring companies to provide jobs by processing Crown timber locally in return for TFLs. One of the biggest offenders is Western Forest Products, which wants to make huge profits by selling off TFL lands while it closes mills.

     Then there was the shadowy agreement reached several years ago between the Liberals and the forestry companies, to relax safety regulations and enforcement. In a move to reduce labour costs, loggers and other workers became "independent contractors", compelled to work harder and longer to earn a living. Fatalities in the industry jumped from 16 in 2004 to 43 in 2005, the worst year on record. Union and community outrage over this slaughter forced some improvements, but it was clear that the Liberals were in power to serve the corporations, not the workers.

     That point was hammered home during the six-week strike in 2007 by woodworkers, an attempt to reverse concessions forced upon them in a 2003 strike. This time around, the union and the industry appealed for an emergency assistance plan from the province, and Coleman promised one would be released a week after the strike was settled. The plan took much longer to issue, and it falls far short of what both sides wanted.

     Maurita Prato of the Dogwood Initiative, a group sharply critical of the government, pointed out recently that "predictable, cyclical, downturns in the forest industry happen about every 10 years. Ultimately, the current downturn may work out just fine for large corporate entities that have enough cash to weather the storm and wait for those less fortunate to fall. Downturns create the opportunity for forest companies to demand larger government concessions, exacerbating, not alleviating the boom and bust cycle. If government doesn't step in and make changes, we will likely see further corporate consolidation in the forest industry, before the crisis is over. That means more control of B.C.'s forests to fewer corporate entities whose bottom line is competing on the global market and making money as fast as possible for shareholders."

     Prato hit the nail on the head. Throughout B.C. history, small, independent sawmills and even larger companies have been swallowed up by bigger corporations with cash reserves. During the latest crisis, some have already gone under, such as Pope & Talbot, which operated four sawmills and two pulp mills in British Columbia. Interfor has bought two of these sawmills, and Weyerhaeuser's Kamloops forest licenses have been bought up by Interfor and West Fraser Timber.

     The Campbell Liberals are widely seen as willing tools of the big forestry corporations. In a May 6 editorial titled "B.C.'s forestry crisis is rooted in ideology," the Nanaimo Daily News came to the following conclusion: "Their (the government's) eyes remained firmly closed to the complete mismanagement of a resource that was once the envy of the world. The raw logs continued to flow out of the province and the economic focus turned to enriching shareholders instead of investing in new technologies necessary to compete on the world market.... The government has created an atmosphere in which owners are not accountable for the mess they have created in this industry, and the government itself ‑ to protect such a policy ‑ has had to pretend nothing has gone wrong."

     The editorial also said that "good business practices" can cushion the effect of downturns. This argument misses the reality that capitalism is a system which compels corporations to place immediate profits ahead of long-term public or environmental benefits. Yet immediate reforms are needed, starting with a ban on log exports.

     One set of changes is being promoted by the Coalition for Sustainable Forest Solutions, which unites a wide range of First Nations, unions, and environmental groups.

     The Coalition is circulating a "Citizens' Declaration on Forest Solutions," based on the following principles: reconcile Aboriginal and Crown title; create, implement, and enforce forest management standards that promote the long‑term health of BC's forest ecosystems; enhance public control and oversight of our forest resources, including rebuilding the public service; redistribute a majority of tenure at the lowest taxpayer cost in order to create a new social contract in BC's forests and to provide greater opportunities for First Nations, communities and local jobs; ensure the public gets full value for forest resources through transparent log markets and related timber pricing reforms; ensure broad access to the timber supply and strengthen raw log export restrictions for the development of a strong, diverse value‑added industry.

     Legislation to implement these goals would reverse the Campbell government's disastrous policies, restoring hope that the industry can be salvaged. In the long run, to escape the "boom-bust" cycle and the dangers of monopoly control, ownership of the west coast forests must be taken by the First Nations and the people of British Columbia. Without progress towards these short and long term goals, the future of this province is in grave doubt.