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ELECTION – Beware of politicians bearing gifts come campaign time

Limiting the export of raw logs sounds like a good idea but….

By ROSLYN KUNIN
Economist

IT’S ELECTION season in B.C. Parties and candidates are tying themselves in knots to dangle before us pleasing and promising prospects in hope of our vote.

Roslyn Kunin.

It all looks so enticing. But before we exercise our democratic right at the polling station, we need to look beyond the sizzle.

The future is always uncertain and often a little scary. That’s why so many politicians hint at a return to the good old days. Certainly Donald Trump did in his successful run to the American presidency.

You remember or have heard of the good old days. Houses were affordable. Marriages lasted. Anybody could find a good job.

Even though we know that our glasses get a little rose coloured when we look toward the past, there’s something attractive in that picture. Vote-seeking politicians are only too happy to get our support by leading us to believe that they can bring back the past.

Alas, time is unidirectional. We can’t go back. And, after a closer look, would we really want to? Those affordable houses had no Wi-Fi and often just one bathroom. Many of the well-paying jobs in manufacturing or resource processing were deadly boring – one of the reasons that they have been replaced by machines.

So we need to be very careful about prospective policies that imply we can bring back the past.

One such policy has already been suggested by B.C.’s New Democrats. They’re looking for ways to limit the export of logs, expecting that this would encourage more wood processing in British Columbia.

It won’t work.

Candidates tie themselves in knots dangling a return to the good old days. Unfortunately, the past doesn’t offer any solutions to our problems

Denying log producers access to international markets would limit their customers to those who could only pay as little as half the world market value of the logs. When the price for a product drops that much, suppliers curtail or stop production and even go bankrupt. Instead of generating manufacturing jobs, this would lead to the loss of jobs in the woods.

Mill closures and the resulting job losses aren’t the result of lack of logs. Systems exist to give local manufacturers first access to logs. Mills have been closing because they’re undercapitalized, inefficient and uncompetitive. The old 20th century mills can’t create good 21st century jobs.

The forest industry is not the only one where government policies might lead a citizen to believe we can bring back the jobs of the past. As forestry has been to British Columbia, so the car industry was to Ontario. Now the federal government and the province of Ontario each plan to put more than $100 million into the automobile industry, mainly in a partnership with Ford.

This has upset the Canadian Taxpayers Federation, which points out that Ford alone made global profits of over US$10 billion in 2015 and so really shouldn’t be subsidized by our taxes. For this money, 300 jobs will be created and 500 jobs saved. Workers whose jobs were previously downsized in the auto industry won’t be able to fill these jobs. Instead, some of these very 21st century jobs are going to high-tech engineers, many from BlackBerry. They will be asked to design and build the driverless cars of the future.

Creating 21st century jobs is good. The irony is that these jobs need the kind of talent that’s in serious short supply in Canada. Our education policies don’t do nearly enough to provide this talent and recent changes to immigration policies actually worsen the situation.

It’s another reason to take a measured, big-picture look at the policies of our governments. And to view with skepticism the backward-thinking promises made by would-be leaders at election time.

Roslyn Kunin is a consulting economist and speaker. She heads up Roslyn Kunin and Associates, Inc., in Vancouver, a consortia of professional analysts and consultants.

© 2017 Distributed by Troy Media

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About Mel Rothenburger (4267 Articles)
ArmchairMayor.ca is a forum about Kamloops and the world. It has more than one million views. Mel Rothenburger is the former Editor of The Daily News in Kamloops, B.C. (retiring in 2012), and past mayor of Kamloops (1999-2005). At ArmchairMayor.ca he is the publisher, editor, news editor, city editor, reporter, webmaster, and just about anything else you can think of. He is grateful for the contributions of several local columnists. This blog doesn't require a subscription but gratefully accepts donations to help defray costs.

1 Comment on ELECTION – Beware of politicians bearing gifts come campaign time

  1. Ms. Kunin—-you’re dead wrong on your comments about the export of raw logs—lets start with “Systems exist to give local manufacturers first access to logs”—that bid auction system is rigged to not allow the small operator to be a successful bidder of those logs—this allows the Canfors and West Frasers of the world to say the bids were unsuccessful so we can now sell those logs on the open market.
    “Mills have been closing because they’re undercapitalized, inefficient and uncompetitive.” Controlling a Tree Farm License and manufacturing those logs in the region they were cut in was the backbone of the BC forest industry prior to the BC Liberals getting rid of the appurtency clauses in BC forest regulations in 2003. Once the major licensees were able to move logs from one region to another and build a few super mills around the province they were able to run their local mills into the ground—refuse to modernize those mills and eventually shut them down because they were inefficient and uncompetitive. Since 2003 BC has lost over 30,000 jobs and 100 mills closed as a result of the corportization of the BC forest industry—-five major corporations now control the BC forest resource—no more little guys or mid size operators supporting community jobs.
    “The old 20th century mills can’t create good 21st century jobs.” Once again you play with words Ms. Kunin—after Stephen Harper and David Emerson sold us out in the last Softwood Lumber Agreement with the United States—those companies that reaped the benefit of getting $4 billion dollars of tariff money back in the deal used that money to buy mills in the US that were closer to the market—shut their mills down in Canada and used that money to buy mills in the US with the latest equipment and technology and since to even modernize them even further. Why are they allowed to invest in those US mills with profits made in BC, while at the same time these companies still control non-operating long term logging licenses that should be providing employment in local communities in BC but are allowed to sit on these forest licenses with no repercussions.
    “It’s another reason to take a measured, big-picture look at the policies of our governments.”
    You can say that again! Christy Clark and the BC Liberals have allowed the BC industry to decline to the state that it is in today. It is now controlled by five major corporations who answer to their board of directors on Bay Street or even worse on Wall Street—they have no compassion or interest in the communities that were the back bone of this province for so long—HR MacMillan is rolling over in his grave.
    “And to view with skepticism the backward-thinking promises made by would-be leaders at election time.” The last sentence of your article says it all! What’s so backward-thinking about trying to save an industry that BC was built on? There’s still enough wood out there to sustain a manufacturing industry in BC but local communities and First Nations have to have some input and be part of the decision making process.
    Do you remember Forest Renewal BC—a program initiated by an NDP government in 1993 to develop a long term, environmentally sustainable industrial strategy to enhance the economic and social benefits derived from the working forests of BC. Doesn’t sound so bad does it. Might be something we want to have another look at today—a whole lot better than putting all our eggs in the basket of LNG.

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