The Socio-Economic Analysis of the Mackenzie Timber Supply Area (TSA) is one of four reports prepared as part of the Timber Supply Review process and Allowable Annual Cut (AAC) determination. The purpose of this analysis is to illustrate the social and economic impacts of timber harvest decisions, which might result from the Timber Supply Review, and to generate public comment.
The Mackenzie TSA area is in the north-eastern interior section of British Columbia (See Figure 2.1). Mackenzie is one of six TSAs within the Prince George Forest Region and is one of the largest TSAs in the province, covering roughly 6 130 604 ha., of which 6 097 386 ha. is Crown land.
In 1991, the population of the Mackenzie Forest District was 6 200 with the majority living in the municipality of Mackenzie.
Two First Nations communities are located within the TSA. Fort Ware and Tsay Keh Dene are remote communities located near the north end of Williston Lake. The community of McLeod Lake is located just south of the Mackenzie TSA boundary along Highway 97 between Mackenzie and Prince George. Takla Lake is a remote First Nations community located in the adjacent Fort St. James district to the west. All of these First Nations claim traditional territories within the Mackenzie TSA and have strong economic and social interests within the area.
The economy of the Mackenzie TSA is overwhelmingly dominated by forestry. Over 70% of the region's employment is either directly or indirectly dependent on the harvesting and milling of wood products. The second largest economic sector of the area is the Public Sector with 14% of total employment, followed by tourism at about 4%, and agriculture at 2%, mining and mineral processing at 1%, and employment related to transfer payments and pension income at 3%.
The major forest licensees include Fletcher Challenge and Finlay Forest Industries. Fletcher Challenge operates a sawmill and pulp mill while Finlay Forest Industries operates two sawmills and a pulp and newsprint mill.
In 1994, direct forestry employment related to harvesting, silviculture and processing in the TSA was over 2650 person years (PYs), with residents of the Mackenzie TSA accounting for 1900 of those PYs. A further 130 PYs are supported by timber shipped from the TSA for processing in Prince George mills.
In 1994, timber harvesting generated approximately $60.4 million in stumpage revenues. This value is based on a Mackenzie TSA specific stumpage rate of $20.44 per cubic metre of timber cut. This reflects the increases in stumpage rates introduced in 1994.
The Mackenzie TSA is one of the largest in the province, covering an area of approximately 6.1 million hectares. It is located entirely within the Arctic watershed of the Peace River. Williston Reservoir, covering approximately 1.5 million hectares, is the dominant geographic feature of the area. The Rocky Mountain Trench runs north south through the centre of the TSA. The rugged Rocky Mountains border the trench along the eastern side. The more rounded Omineca Mountains are found along the western side of the trench.
The climate is Continental Sub Arctic; cold winter weather is the dominant feature. Daily average temperatures are below freezing for half of the year and three quarters of the annual precipitation falls as snow.
The Mackenzie TSA is some 6 130 604 ha in size, of which approximately 18% is currently considered available for timber harvesting (see Table 3.1).
Spruce, lodgepole pine and balsam (true fir) predominate in the TSA. The AAC is constituted solely of coniferous species. Deciduous species such as aspen and birch are present in the TSA, but virtually no volume has been utilised; however, recently there have been expressions of interest.
The current allowable annual cut for the TSA is 2 951 121 m3. The AAC has been at this level since 1989. The current apportionment is outlined in Table A1.
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| Forest Licences
Fletcher Challenge Canada Ltd. Finlay Forest Industries Ltd. Total Forest Licences | 1 486 863 1 236 150 2 723 013 | 50.4 41.9 92.3 |
| Timber Sale Licences >10 000m3 | 0 | 0.0 |
| Small Business Forest Enterprise Program Section 16 Section 16.1 Bid Proposals Timber Sale Licences <=10 000m3 Total SBFEP | 0 183 597 0 183 597 |
6.2 6.2 |
| Forest Service Reserve | 29 511 | 1.0 |
| Woodlot Licences | 15 000 | 0.5 |
| Allowable Annual Cut (apportioned) | 2 951 121 | 100.0 |
Three harvest forecasts were selected from the Mackenzie TSA Timber Supply Analysis to provide a basis on which to present potential impacts related to changing harvest levels. Scenario 1 corresponds to the base harvest forecast in the Timber Supply Analysis. Scenarios 2 and 3 have different initial harvest rates, but are modelled under the same assumptions as the base harvest forecast. Note that these scenarios are not recommendations, or preferred options, but provide a basis for discussion of potential implications.
Scenario 1 (the base case harvest forecast in the Mackenzie TSA Timber Supply Analysis report), begins with the continuation of the harvest level at 2 951 121 m3 per year for three decades. In the fourth decade, the harvest level is reduced to 2 796 000 m3 per year and in the fifth to the tenth decade to 2 640 000 m3 per year. The harvest level would then rebound to 2 810 000 m3 per year for the next 200 years. This is in effect the long-term harvest level (LTHL). The LTHL represents a five percent decline over current harvest levels.
To spread the harvest reduction more evenly, Scenario 2 would reduce the annual harvest by 40 000 m3 in each of the second through tenth decades. Then it would be increased at the same rate from the eleventh to sixteenth decades, at which time the LTHL would be reached. The emphasis is on spreading the change over a long time period, thereby minimizing the socio-economic-environmental impacts in any one period.
This scenario suggests an immediate reduction in the harvest of 278 121 cubic metres, or 9%, to 2 673 000 cubic metres per year. The harvest level would then increase in Decade 11 to the LTHL of 2 810 000 cubic metres per year.
The socio-economc impacts of these scenarios are
summarized in the following table.
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| Change in Harvest (m3) | |||||||
| TSA Level Economic Impacts
Direct Forestry Employment (PYs) Total Forest Employment Direct Forestry Income ($millions) Total Forestry Income |
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| Provincial Level Economic Impacts
Direct Forestry Employment (PYs) Total Forestry Employment Direct Forestry Income ($ millions) Total Forestry Income |
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| Government Revenues ($millions)
Provincial Revenues Federal Revenues |
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| Community Impacts
Scenario 1
Scenario 2 Scenario 3 | Employment stability for the first three decades, given the continuation of current forestry/employment relationships. Scenario 1 would allow groups ample time to prepare for potential community and individual stresses.
Would provide a stable harvest for the first decade prior to reductions beginning in Decade 2. Employment would decline just over 1.3% in Decade 2. Immediate job impacts lowering TSA related PYs by 9%. Would create individual and community stresses. Little time to plan for community impacts. Would provide stability beyond initial declines. | ||||||