Executive Summary
This Socio-Economic Analysis (SEA) provides information on social, environmental and economic implications of changing timber harvest levels for the Cranbrook Timber Supply Area (TSA). It is one of four reports being generated for the area as part of the Ministry of Forests' province wide timber supply review to assist the Chief Forester in setting allowable annual cut (AAC) levels. The purpose of this analysis is to describe the effects of various timber harvest forecast levels on the Cranbrook TSA communities, employment, income, government revenues, First Nations and the environment.
Environmental Setting
The Cranbrook TSA comprises 1.48 million hectares and is located in the southeast corner of British Columbia, bordered by the B.C./Alberta boundary on the east side and the Canada/U.S.A. boundary on the south side.
The area is comprised of two rugged mountain ranges separated by a broad, flat valley. The eastern portion of the Cranbrook TSA is dominated by the Rocky Mountain range and the western portion by the Purcell and McGillivary mountain ranges. The elevation above sea level at the floor of the Trench is approximately 800 metres while the surrounding peaks range up to 3500 metres.
The Cranbrook TSA is unique in the province in terms of the density and diversity of ungulate populations. The area holds internationally significant populations of grizzly bear as well as important populations of woodland caribou and Rocky Mountain Bighorn Sheep. The Cranbrook TSA also contains a wide variety of other species of ungulates, small mammals, birds and fish, many of which are considered "at risk" within British Columbia.
The great wealth and diversity of natural resources in the Cranbrook TSA increases the complexity of land use management in the area. Values for forestry, mining, agriculture, energy, tourism, hunting, fishing, outdoor recreation, cultural heritage, ecosystem preservation and human settlement are all very high throughout the region. This creates one of the most complex arrays of potentially complementary and competing land uses in British Columbia. All of these activities and interests tend to concentrate in the valleys and trenches of this generally rugged mountainous area, leading to a long history of land use conflicts.
Socio-Economic Profile
The major Cranbrook TSA communities are Cranbrook, Kimberley, Fernie, Sparwood and Elkford. The current Cranbrook TSA population is estimated at 49 000, up from the 1991 Census count of 45 470.
The following chart shows the breakdown of employment by major economic sector.
1991 Cranbrook TSA Employment by Industry Sector
Percent of Total Employment
Source: Ministry of Finance and Corporate Relations.
In 1991, the mining sector in the Cranbrook TSA accounted for 27% of employment and 21% of after-tax income. In August 1992, Westar Mining Ltd., operator of two of the five large coal mines in the Cranbrook TSA, declared bankruptcy and laid-off 1500 workers. The ex-Westar Mining operations re-opened in 1993, but with only 38% of the laid-off labour force. When we exclude the ex-Westar Mining employees who returned to work at local mines, 50% of the displaced workers continue to live in the Elk Valley but are still unemployed or in training, 34% re-located to other communities, 10% are no longer in the labour force and 6% started their own businesses.
The lead and zinc Sullivan mine in Kimberley is the other major mining operation in the region and it has been operating since 1909. The mine employs 662 people, down from the 1980/81 peak of 1500 because of ore depletion. Cominco expects to close the mine by the year 2002.
In 1991, the forest industry accounted for 13% of the Cranbrook TSA's employment and 10% of after-tax income. Crestbrook Forest Industries (CFI) dominates the forest industry sector in the region. Major wood product operations include the CFI sawmills at Cranbrook and Elko, the Galloway Lumber sawmill, the Kootenay Wood Preservers plant, and the Canada Cedar Pole operation. CFI also has a pulp mill in Skookumchuck, which is just outside the Cranbrook TSA, with most employees residing in Cranbrook or Kimberley.
In 1991, the tourism sector accounted for 8% of employment and 3% of after-tax income. Major tourism/ recreation activities include touring, hunting, angling, golfing, skiing, snowmobiling and back country experiences like hiking and wildlife viewing. Cranbrook, Kimberley and the Fort Steele Historic Park provide the major focus of recreation/tourism development in the area.
During the fall season, a large number of hunters arrive in the region from B.C., other provinces, the U.S. and overseas. Hunting is an important component of the tourism/recreation sector. Numerous big game species, such as black and grizzly bear, deer, elk, moose, mountain goat, mountain sheep and cougar attract hunters to the area.
First Nations
The Cranbrook TSA is within the traditional tribal territory of the Ktunaxa Kinbasket Tribal Council and most First Nations people in the Cranbrook TSA are part of the Ktunaxa people. The St. Mary's Band and the Tobacco Plains Band are the two primary settlements in the Cranbrook TSA with both Bands having a combined population of approximately 575. First Nations account for 1.2% of the Cranbrook TSA population compared to 2.9% for all of B.C. Another three Ktunaxa Kinbasket member Bands are based outside the Cranbrook TSA but have territorial claims to the area.
The forest sector generates between 20 and 25 person years (PYs) of employment for First Nations in the Cranbrook TSA, representing an estimated 7.5% of the local Aboriginal labour force. First Nations in the region are concerned that they do not receive an equitable share of the harvestable forest and of forest industry employment. They are also very concerned with the use of resources on their traditional territories and want to negotiate Treaties to define resource rights. The Ktunaxa Kinbasket Tribal Council has submitted a letter of intent with the governments of British Columbia and Canada to enter into comprehensive land claims to an area which includes the Cranbrook TSA.
TSA Forest Sector
The Cranbrook TSA covers 1.48 million hectares, of which 29% is currently considered available for timber harvesting. Private lands cover some 13% of the Cranbrook TSA, of which a third (about 65 000 hectares or 4% of the total land area) are operable forest lands. In 1993, the private land harvest in the Cranbrook TSA was 375 000 cubic metres.
The current Allowable Annual Cut (AAC) is 896 136 cubic metres. Crestbrook Forest Industries holds 71.5% of the AAC, Galloway Lumber Company holds 15.4%, the Small Business Forest Enterprise Program and other smaller licensees account for the other 13.1%.
The major wood species harvested in the region include lodgepole pine, spruce, douglas fir, larch, balsam and hemlock. The area's ecosystems are prone to frequent and large forest fires. In addition, the TSA has experienced periodic mountain pine beetle infestations and the AAC was increased by 235 000 cubic metres from 1990 to 1992 to control the infestation.
The forest industry generates approximately 1.71 PYs in the Cranbrook TSA for each 1000 cubic metres harvested from the Cranbrook TSA. When extrapolated to the current TSA harvest of 896 136 cubic metres, this translates to 1531 PYs.
At the provincial level, the forest industry generates approximately 2.51 PYs per 1000 cubic metres harvested (including the TSA impacts). This translates to 2245 PYs for the current Cranbrook TSA harvest.
Timber Harvest Forecasts
All three forecasts involve a 29% drop from the current TSA harvest of 896 136 cubic metres to a Long Term Harvest Level (LTHL) of 633 000 cubic metres. The forecasts differ in the timing and magnitude of initial harvest reductions: under Scenario 1, there would be an immediate 10% drop in the current harvest level, Scenario 2 assumes an immediate 23% drop from the current harvest, and Scenario 3 assumes the status quo for the first decade. Each forecast achieves the LTHL in Decade 13 (130 years in the future).
Scenario 1 Harvest Forecast
The effects of changes in harvest levels for Scenario 1 are summarized as follows.
Forest Related Economic Impacts - Scenario 1 (Includes Direct, Indirect and Induced Impacts)
Harvest Level | Term |
||||
| Harvest Level (000 m3) | 896 | 807 | 726 | 559 | 633 |
| TSA Economic Impacts:
- Employment (PYs) - Income ($ millions) | 1531 $43.6 | 1379 $39.3 | 1241 $35.4 | 955 $27.2 | 1082 $30.8 |
| Provincial Economic Impacts: - Employment (PYs) - Income ($millions) | 2245 $59.4 | 2022 $53.5 | 1819 $48.1 | 1401 $37.1 | 1586 $42.0 |
| Government revenues ($ millions): - Provincial - Federal - Total | $19.2 13.5 $32.7 | $17.3 12.2 $29.5 | $15.6 10.9 $26.5 | $12.0 8.4 $20.4 | $13.6 9.5 $23.1 |
Impacts of Scenario 1 on Other Economic Sectors:
- No impacts on the public sector in the short-term as the population is not expected to drop significantly;
- No effects on mining or agriculture; and
- A mildly positive impact on tourism and recreation opportunities, assuming that access is not reduced significantly. About 14% of visitors to the region cited the outdoors as the main reason for visiting the region and it is this sector of the market which stands to be most affected by a reduced harvest. There will be no or very limited positive impact on the other 86% of the tourism sector.
Community Impacts: Under Scenario 1, harvest reductions in Decade 1 would cause the loss of 152 local jobs increasing the unemployment level from the 1994 level of 9.9% to 10.6%. The harvest reduction under Scenario 1 would not likely be sufficiently large to lead to a mill closure in Decade 1. However, Cranbrook TSA sawmills rely heavily on private timber from B.C. and Alberta and any reductions in private timber volumes could amplify the TSA harvest reduction in Decade 1. A mill closure could result in an additional 150 PYs of direct processing jobs being lost.
Most of the job losses would likely occur in the Cranbrook region where the economy is more diversified, larger and somewhat stronger than in the Elk Valley. Also, the community infrastructure is well developed to handle the demands of displaced workers. However, the timing of the job losses would be important particularly since the Kimberley lead and zinc mine is expected to close in the next few years, leading to 662 direct job losses. Unemployment can affect the mental and physical health of individuals and adequate services will need to be put in place.
First Nations Impacts: Reduced harvest levels are more consistent with Aboriginal environmental and cultural values. Most of the forestry related employment for First Nations is in silviculture and fire fighting and, therefore, is not directly tied to harvest levels. Declining harvest levels would increase the difficulty for First Nations to obtain forest licences within the Cranbrook TSA and may not be consistent with the economic objectives of some First Nations Bands.
Environmental Impacts: Most of the environmental issues in the Cranbrook TSA concern the preservation and regeneration of preferred fish and wildlife habitat. To the extent that harvest levels would be lower than current levels, one could expect some positive impacts on the environment. However, to determine the impacts of timber harvesting Scenarios in more detail, data are required on the present and future rates and distribution of timber removals by forest age class and area within the TSA.
Scenario 2
Scenario 2 assumes an immediate 23% decline in the harvest, or a reduction by 210 000 cubic metres from current harvest levels. Under this Scenario, 365 local jobs and 161 jobs elsewhere in B.C. would be lost. This scenario would likely result in the immediate closure of one of the three Cranbrook TSA sawmills. Significant negative impacts on the displaced workers, their families and the Cranbrook TSA communities would be evident.
Given the long term reductions in harvest levels modelled under all Scenarios, one of the sawmills would likely eventually close. However, under Scenario 2, the closure would likely occur in Decade 1, thereby leaving limited, or no time for workers and the communities to plan for the lay-offs.
Scenario 3
Under Scenario 3, the harvest level would remain at the current
rate of 896 136 cubic metres for Decade 1, thereby helping secure
the jobs at the existing mills for the next ten years. However,
even under the current harvest level, there are significant wood
supply shortages in the Cranbrook and neighbouring TSAs. There
are therefore no guarantees that the three major Cranbrook TSA
sawmills would all remain open in the future, even if the current
TSA harvest level is maintained. Also, the prospect of eventual
declines in harvest would likely influence current decisions regarding
re-investment in plant and equipment.