Okanagan, (TSA) Public Discussion Paper

Socio-economic impacts

The Socio-Economic Assessment attempts to document socio-economic impacts that are related to the rate of harvest. Fluctuating market conditions and forest health considerations have resulted in a significant variation in the annual rate of harvest between 1985 and 1993. Forest companies have had to adapt to these cycles and communities have had to absorb the related economic impacts.

The projected social and economic impacts of changes in the rate of harvest include:

• Employment and income
The current rate of harvest supports 6,384 person-years* of employment (3,086 direct and 3,298 induced and indirect*). The total net employment income generated from this harvest level (excluding tax and non-cash benefits) is $176.1 million. (SEA page eight)

If the allowable annual cut was to conform to the base case forecast (see figure 1), achieving the long-term timber supply level is projected to remove 1,449 person-years of employment (698 direct and 751 induced and indirect) and $40 million in annual net income from the forest sector in the timber supply area by 2030.

• Provincial level - The current rate of harvest supports an additional 2,116 person-years of employment outside the timber supply area (314 direct and 1,802 indirect) for a total of 8,500 provincially. This generates an additional $56.8 million in net employee income, for a total of $231.9 million provincially.

If the allowable annual cut were to conform to the base case, the adjustment to the long-term timber supply level is estimated to remove an additional 478 provincial person-years of employment (73 direct and 405 induced and indirect) for a total of 1,927 person-years of employment; and $12.6 million in net annual income from the provincial forest sector for a total of $52.6 million by 2030.

Provincial government revenues would also be reduced by $15.6 to $53.2 million from the current level of $68.8 million (SEA pages three to eight). These estimates were developed before the new Forest Renewal Plan was announced and do not include the increased stumpage revenues that will be generated through this plan. While stumpage revenues are expected to increase by as much as 80 per cent, it will not be possible to accurately estimate the impact of this change until the new policy has been in place for a period of time.

• Range - There are 179 ranchers with forest-based range tenures in the timber supply area. This is approximately one-third of the total cattle ranchers in the area. Forestry range management is a major issue for these operations.

Harvest reductions would likely constrain the future grazing opportunities of this industry. However, the location of the harvesting is as important as the rate. The ranching industry needs spring and fall grazing which occurs on lower elevation sites. In general, the interests of this sector coincide with the maintenance of the existing harvest level. (SEA pages five to six)

• Tourism and outdoor recreation - This sector includes a variety of activities: touring travellers, camping, horseback riding, sport fishing, hunting and guide outfitting, skiing, snowmobiling and houseboating. Some sectors such as skiing appear more dependent on the local population while others (hunting and guide outfitting) have an international clientele.

While this is a diverse sector, all prefer the maintenance of a "natural" looking landscape. To varying degrees, they all benefit from the road access that harvesting creates. There is a movement toward resorts providing year-round activities. Also, lodge operators noted an on-going trend towards offering more of an "urban" setting because of the gradual disappearance of wilderness settings in the Okanagan area. Lodges in the area are no longer able to offer the kind of exclusive natural environment they could once market at a premium price. (SEA pages five to seven)

• Environment - Environmental concerns relate to the rate of change in natural ecosystems and the consequences of that change. The Okanagan Timber Supply Analysis Report assumes that older stands will be harvested first, which means there will be fewer older forests in the future. As these older forests are harvested, the populations of wildlife species that depend on mature forests may decline, while the population of species dependent on younger forests may increase. In addition, increased recreational and hunting access may disrupt some wildlife populations. (SEA pages five to 10)

In general, environmental values, such as protecting fish and wildlife habitat, biodiversity, and visual aesthetics are better served by a more gradual harvesting of older-age timber and by maintaining important or representative old-growth forest areas.

• First Nations - Currently, the level of involvement in forestry by Tribal Councils and bands is relatively low. There is, however, a steady increase in their interest and involvement in forest resource management, and in commercial ventures. Improved opportunities for First Nations groups, to be provided through acquisition of wood supplies, is a very important long-run objective, for both economic development and social reasons. (SEA pages five to 14)

• Communities - Any job losses due to a harvest level reduction would likely be concentrated in a relatively small number of mills. These mills could respond with the elimination of shifts, or possibly closure if they are unable to replace the lost timber supply.

Table 2 identifies the communities where the forest sector is the dominant employment income generator. These communities appear to be the most vulnerable to reduced harvest levels in the Okanagan Timber Supply Area. (SEA pages five to 15)

Table 2. Communities most likely to be impacted by AAC reductions

These communities are somewhat smaller and less diversified, with fewer alternative development options than larger population centres such as Vernon, Kelowna and Penticton. Opportunities do exist to offset potential future job losses within the forest sector. One promising option is to increase the number of jobs created through value-added manufacturing.