These graphs are drawn from softwood lumber exports data published by BC Stats. My aim is to compare results in recent years to those from the desperate nineties when wild-eyed anti-business socialists governed British Columbia. The NDP administered BC for nine complete fiscal years, April 1992 to March 2001. I have compared that period to the nine most recent fiscal years of the current Liberal government, April 2006 to March 2015.
The first illustration shows the quantities of softwood lumber exported, measured in cubic metres. (A typical North American home of 2,500 square feet is built with about 70 cubic metres of wood products.)
These numbers may surprise people who remember Liberal Ministers Steve Thomson and Pat Bell more than four years ago celebrating “exponential growth” of lumber exports to China¹ and promising more of the same for India and other nations:
“We continue to see staggering growth in the amount of wood we export to China, so I’m not surprised that in May we shattered another record for lumber exports to the world’s fastest growing economy,” said Minister of Forests, Lands and Natural Resource Operations, Steve Thomson.²
“This is great news for British Columbians who depend on the forest sector for jobs that support their families.”
“I was shocked,” Bell said. “I had to do the math three or four times to make sure that I was right.”
He credits the expansion to work by the province and forest industry to diversify the market for B.C. forest products by expanding into China.
“This is the result of years of hard work by the provincial government and industry,” Bell said.
Despite expensive marketing efforts in new regions, softwood lumber exports dropped 25 million cubic metres in the more recent period. However, the truly shocking news is that the value of exports, measured in 2015 dollars, is $46 billion less in the period of Liberal rule.
|Converted to 2015 dollars using Bank of Canada calculator|
There is a clear explanation: the unit value (price per cubic metre) of exported lumber dropped significantly.
There are a number of potential factors behind these results. It is possible that BC sawmill products have declined in quality, perhaps because high grade timber is now exported in the form of raw logs, although the unit value of logs shipped overseas has declined by a similar percentage. One bothersome possibility is fraudulent transfer pricing. In modern times, sales of materials seldom involve a direct connection between producer and distributor and when international transactions are involved, the layers become even more complicated. Physical goods may travel directly but ownership might move in a convoluted path, sometimes passing through offshore tax havens.
Liberal policy has been to reduce the number of public servants in all parts of government. As a result, the ranks of professional employees have been decimated and, in this more complicated globalized economy, the province has far less ability to ensure fair dealings in production and sales of its natural resources. How much of the billions of dollars of lost trade resulted in lost wages and lost taxes? Clearly, the impact is huge.
I cannot explain why the profile of forestry trade has shifted and I fear the BC government cannot explain it either. There’s one difference though: I’d like to see it clarified, the Liberal Party and their corporate sponsors are quite happy with the way things are.
¹ Is India the next China lumber market?, Gordon Hoekstra, Prince George Citizen, June 20, 2011
² B.C. lumber exports to China soar, CBC News, July 17, 2011