This report is one of four reports being prepared as part of the Timber Supply Review in the southern portion of the Kalum Timber Supply Area (Kalum South). The report assesses the major socio-economic implications associated with three harvest scenarios presented in the Kalum South Timber Supply Analysis.
Kalum South is part of the Kalum Forest District which is located in the Prince Rupert Forest Region. The boundaries of Kalum South correspond to the southern portion of the Kalum Forest District, but exclude Tree Farm Licence (TFL) areas. (See Figure 1-1).
The implications of changing harvest levels are assessed within a multiple-accounts framework. Employment and government revenue impacts are presented in a quantitative format and three accounts (community, First Nations, and environment) are qualitative discussions. Table 1-1 provides a summary of these accounts.
Socio-Economic Profile
Kalum South has a population of about 32 032 residents (1991), the majority of which 22 738 (71 percent) live in the communities of Terrace and Kitimat. Other communities in Kalum South include Thornhill, Terrace East, Terrace South, Gitakdamix, Gitwinksihlkw, Kitsumkalum, Kitselas, and Kitamaat Village.
The Nisga'a, Tsimshian, and Haisla Nations all have members that reside in Kalum South. First Nations activities and interests are discussed in Section 2.1.3.
The labour force in Kalum South is primarily dependent on the industrial base that consists of forestry, aluminum smelting, and petrochemical production.
Fishing, tourism, agriculture, botanical forest products, mining, hunting and trapping also contribute to the regional and provincial economies.
Environmental Setting
Kalum South has several distinguishing environmental features and is characterized by four different biogeoclimatic zones. Kalum South contains important aquatic habitats and includes portions of the Skeena, Nass, Tseax, and Kitimat river systems.
Kalum South also contains many popular recreation sites and provides people from within and outside the area a wide variety of recreational opportunities.
Current Forestry Operations
Kalum South covers a total land area of 549 762 hectares of which 18.9 percent or 103 878 hectares are within the current harvesting land base.
The current AAC in Kalum South is 480 000 cubic metres per year. Forest licenses held by Bell Pole Co. Ltd., West Fraser Mills Ltd., and Skeena Cellulose Ltd. represent 389 396 cubic metres or 81 percent of the total AAC.
The current AAC supports direct forestry employment of 461 person-years (PYs) per year (see Figure ES-1). The majority of the forestry work force (87 percent) comes from communities within Kalum South. The community of Prince Rupert, which receives wood chips from Kalum South at the Skeena Cellulose pulp mill, is the major employment beneficiary outside Kalum South.
Description of Harvest Scenarios
Figure ES-2 illustrates the three harvest scenarios examined in this report.
Scenario 1 is the base case harvest forecast from the Kalum South Timber Supply Analysis. Under Scenario 1, the current harvest of 480 000 cubic metres per year is reduced to 464 000 cubic metres per year in decade one, and 418 000 cubic metres per year in decade two. In decade three, the long-term harvest level of 400 000 cubic metres per year is reached.
In Scenario 2, the current harvest of 480 000 cubic metres is maintained for one decade. In decade two, the harvest declines to the long-term harvest level of 400 000 cubic metres per year.
In Scenario 3, the current harvest of 480 000
cubic metres per year is maintained for the first two decades.
Beginning in decade three, the harvest is reduced to 430 000
cubic metres per year and by decade four, the long-term harvest
level is reached. Maintaining the harvest at 480 000 cubic
metres for the second decade results in a significant decline
below the long-term harvest level in decades 13 and 14.
Economic Impacts
Employment and employment income impacts for Kalum South and the province are summarized in Table ES-1. Provincial government revenue impacts are also summarized in this table.
Kalum South residents provide approximately 87 percent or 403 PYs of the 461 PYs of direct forestry employment derived from the Kalum South harvest. Prince Rupert is home to the majority of the labour force residing outside Kalum South, but deriving employment from the Kalum South harvest.
Under all three scenarios, reducing the harvest to the long-term harvest level of 400 000 cubic metres per year could eliminate 106 PYs from the Kalum South economy. Sixty-three percent (67 PYs) of these would be in the Kalum South forest sector.
The overall decline in the harvest from 480 000 to 400 000 cubic metres, the long-term harvest level, reduces provincial government revenues from $7.2 million to $6.0 million annually.
Scenario 1 would have an immediate impact, while
impacts associated with Scenarios 2 and 3 would be deferred until
future decades.
| ||||||
| Employment and Employment Income: Decade 1 | ||||||
| Harvest Level (m³/year) | ||||||
| Direct Employment (PYs/year) | ||||||
| Total Employment (PYs/year) | ||||||
| Direct After-Tax Income ($1993 M/year) | ||||||
| Total After-Tax Income ($1993 M/year) | ||||||
| Employment and Employment Income: Decade 2 | ||||||
| Harvest Level (m³/year) | ||||||
| Direct Employment (PYs/year) | ||||||
| Total Employment (PYs/year) | ||||||
| Direct After-Tax Income ($1993 M/year) | ||||||
| Total After-Tax Income ($1993 M/year) | ||||||
| Employment and Employment Income: Decade 4 | ||||||
| Harvest Level (m³/year) | ||||||
| Direct Employment (PYs/year) | ||||||
| Total Employment (PYs/year) | ||||||
| Direct After-Tax Income ($1993 M/year) | ||||||
| Total After-Tax Income ($1993 M/year) | ||||||
| Government Revenues: Decade 1 | ||||||
| Total Revenues ($1993 M/year) | ||||||
| Government Revenues: Decade 2 | ||||||
| Total Revenues ($1993 M/year) | ||||||
| Government Revenues: Decade 4 | ||||||
| Total Revenues ($1993 M/year) | ||||||
Social and Environmental Implications
A summary of the social and environmental implications of the harvest scenarios is provided in Table ES-2.
Community
Reductions in forestry employment would increase unemployment in Kalum South communities. The community of Terrace could be affected due to its relatively high forestry labour force and significant dependence on the Kalum South harvest. Terrace could also be impacted through the loss of indirect jobs associated with Terrace's large service sector.
First Nations
Two major concerns of First Nations communities include: economic development and employment opportunities, and preservation of cultural and traditional resources.
First Nations communities in the area have expressed an interest in gaining greater access to the employment opportunities afforded by silviculture and harvesting activities. Traditional and cultural resources may be affected by forestry activity, depending on where future harvesting actually occurs.
Environment
Various provincial guidelines have been implemented to improve the management of B.C. forest resources. Within Kalum South, several regional initiatives have been utilized to better manage and protect special areas and resources.
Environmental concerns centre on the rate of harvest
of old growth forest, impacts on aquatic habitat, and management
of other forest resources.
| ||
| Scenario 1 | Scenario 2 | Scenario 3 |
| Community
Community impacts occur immediately. Approximately 13 PYs of direct and 8 PYs of indirect employment will be lost immediately in Kalum South. Most of these employment impacts will occur in the community of Terrace. | All employment impacts are deferred until decade two. However, beginning in decade two area communities would expect to see a reduction in direct employment by 67 PYs and indirect employment by 24 PYs. | Employment impacts are deferred until decade three. In decade three and four employment will decline with the harvest reductions |
| First Nations The immediate harvest reduction could have a negative impact on First Nations forestry employment. Much of this employment is provided by relatively new companies which may be the first affected under a harvest decline. However, the harvest reduction could assist in addressing First Nation concerns related to timber harvesting and impacts on traditional uses of forest resources. | Maintaining the current harvest level may allow more flexibility in addressing First Nations' desire to obtain forest tenures. However, maintaining harvest levels would conflict with expressed interests among First Nations to conduct timber harvesting at a more sustainable level. | Implications would be similar to Scenario 2. |
| Environment May provide more flexibility to incorporate decisions from land use planning processes such as PAS and the LRMP. | Because the current harvest level is maintained in decade one, Scenario 2 may not afford the same flexibility for addressing environmental and preservation concerns as does Scenario 1. | Scenario 3 affords less flexibility for integrating environmental and preservation concerns into harvesting plans relative to Scenario 1 or 2. Old growth forests are utilized more rapidly under Scenario 3. |