The North Coast Timber Supply Area (TSA) is one of eight TSAs within the Prince Rupert Forest Region. The TSA covers an area of 1.95 million hectares, approximately half the size of Vancouver Island.
This report assesses the major socio-economic impacts associated with a number of harvest forecasts identified in the timber supply analysis report recently prepared for the North Coast TSA.
The major impacts of four harvest forecasts are assessed using a multiple accounts framework. The impacts are defined according to six accounts: three TSA level accounts - economic development, community, and First Nations; and three provincial accounts - economic development, government revenues, and environmental values.
The North Coast TSA has a population of about 21 100 residents (1991), of which 16 620 (nearly 80 percent) live in Prince Rupert. Other communities in the TSA include Stewart, Port Edward, Lax Kw'alaams (Port Simpson), Kitkatla, Hartley Bay, Metlakatla, Kincolith, Lakalzap (Greenville), Kitsault and Oona River.
About 25 percent of the population is aboriginal. The area is home to members of the Hartley Bay, Kincolith, Kitkatla, Kitamaat Village, Lakalzap, Lax Kw'alaams and Metlakatla bands. These bands are affiliated with the Haisla, Nisga'a, North Coast, and Tsimshian Tribal Councils. The primary sources of employment for First Nations communities are commercial fishing and forestry.
The main economic activities in the TSA are commercial fishing and forestry. Tourism, mining, and guide-outfitting also contribute significantly to the local economy.
There are many pristine wilderness areas in the North Coast TSA. The TSA contains a variety of ecosystems, ranging from the low flood plains, dominated by cottonwood forest along the Nass and Skeena Rivers, to glaciers at the higher elevations in the northern part of the TSA, near Stewart. The TSA is home to a variety of plants and wildlife, including many rare and uncommon species.
The Allowable Annual Cut (AAC) in the North Coast TSA has ranged from 600 000 to 700 000 cubic metres per year over the past decade. The current AAC is 600 000 cubic metres per year.
Approximately 33 percent of direct forestry employment accrues to TSA residents. The types of direct forestry employment include: harvesting; road building; marine transportation (log barging, towing, and sorting); timber processing; silviculture; administration and engineering; equipment maintenance; and export log loading. North Coast TSA timber processing employment accrues mostly to communities outside the TSA.
TSA and provincial forestry employment shares by sector, based on the current AAC, are depicted in Figure ES-1. It is estimated that the current AAC supports 252 person-years (PYs) of direct forestry employment for TSA residents. An additional 492 PYs of employment accrue to residents who live outside the TSA. In total, the current AAC provides approximately 744 PYs of direct forestry employment.
The harvest forecasts examined in this report are illustrated in Figure ES-2. These forecasts illustrate four ways to reduce timber harvests over different periods of time to the long-term harvest level. The forecasts do not represent preferred options.
In Scenario 1, the current harvest level of 600 000 cubic metres per year is maintained until the beginning of decade seven. Then, the harvest level is reduced by 10 percent per decade, until the long-term harvest level of 301 000 cubic metres per year is reached at the beginning of decade 13. In Scenario 1, the current harvest level is maintained for as long as possible while allowing for a reasonable decline to reach the long-term harvest level.
Scenario 2 explores the impacts of an elevated harvest. The harvest level increases from 600 000 to 854 000 cubic metres per year at the beginning of decade one. At the beginning of decade 2, the harvest is phased down by 10 percent per decade. At the beginning of decade 11 the long-term harvest level of 301 000 cubic metres per year is reached.
In Scenario 3, which explores uncertainty regarding volume estimates, the initial harvest level of 598 000 cubic metres per year (almost equal to the current level of 600 000 cubic metres per year) is maintained for the first decade, but is phased down by 10 percent per decade beginning in decade two. The long-term harvest level of 301 000 cubic metres per year is reached at the beginning of decade eight, earlier than in the other harvest forecasts.
Scenario 4 examines the
effects of an increase in land base. The current harvest level
could be maintained until the beginning of decade 10. Beginning
in decade 10 the harvest level is reduced by 10 percent per decade,
until the long-term harvest level of 350 000 cubic metres
per year is reached at the beginning of decade 15. The long-term
harvest level in this harvest forecast is 49 000 cubic metres
per year higher than under the other forecasts.
Direct Forestry Employment Associated with North Coast TSA AAC
Current Harvest Level
(600 000 m³)
Provincial Direct Forestry Employment (744 PYs)
(Including TSA Employment)
The TSA impacts of the harvest forecasts are summarized in Table ES-1 and are discussed below. In the following discussion the harvest forecasts are compared in terms of each of the impact accounts. Each scenario is discussed separately in Sections 5.0 to 8.0 of the report.
As the harvest declines in each of the harvest forecasts, the estimated TSA employment declines in proportion.
In Scenario 1, the direct
TSA employment generated by forestry activity is approximately
252 PYs during the first six decades, but then gradually declines
to 126 PYs by the beginning of decade 13, when the long-term harvest
level is reached. In Scenario 2, the initial increase in the harvest
level boosts direct TSA employment to 359 PYs, in the first decade.
After the first decade, direct employment begins to decline gradually
to the long-term level of 126 PYs which is reached in decade 11.
In Scenario 3, decade one employment is 251 PYs. A gradual decline
in employment begins in decade two and the long-term employment
level of 126 PYs is reached in decade eight. In Scenario 4, an
employment level of approximately 252 PYs is maintained during
the first nine decades, but then gradually declines to 147 PYs
by the beginning of decade 15.
Summary of TSA Accounts | |||
| Economic Development: Scenario 1 | |||
| Direct Employment (Pys/year) | |||
| Total Employment (Pys/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Base Case Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 2 | |||
| Direct Employment (Pys/year) | |||
| Total Employment (Pys/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 2 Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 3 | |||
| Direct Employment (Pys/year) | |||
| Total Employment (Pys/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 3 Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 4 | |||
| Direct Employment (Pys/year) | |||
| Total Employment (Pys/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 4 Harvest Level ('000 m³/year) | |||
| Community
Community impacts do not occur until far into the future. | Stimulates TSA employment in early decades. | ||
| Aboriginal
Variety of views due to diversity of resource issues and communities in the TSA. | Aboriginal communities will have different responses. | ||
Summary of TSA Accounts | |||
| Economic Development: Scenario 1 | |||
| Direct Employment (Pys/year) | |||
| Total Employment (Pys/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Base Case Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 2 | |||
| Direct Employment (Pys/year) | |||
| Total Employment (Pys/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 2 Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 3 | |||
| Direct Employment (Pys/year) | |||
| Total Employment (Pys/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 3 Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 4 | |||
| Direct Employment (Pys/year) | |||
| Total Employment (Pys/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 4 Harvest Level ('000 m³/year) | |||
| Community
Community impacts do not occur until far into the future. | Decrease in TSA employment starting in decade one. | ||
| Aboriginal
Variety of views due to diversity of resource issues and communities in the TSA. | May create new employment opportunities for aboriginal communities in the TSA. | ||
In Scenario 1 and Scenario 3, direct after-tax TSA employment income of $8.8 million ($1993) associated with the current harvest level declines to an estimated $4.4 million ($1993) when the long-term harvest level is reached. In Scenario 4, direct after-tax TSA employment income declines from $8.8 million ($1993) to $5.1 million ($1993). In Scenario 2, direct after-tax TSA employment income of $12.6 million ($1993) associated with the increased harvest level in decade one declines gradually to an estimated $4.4 million ($1993) when the long-term harvest level is reached.
As shown in Table ES-1, including indirect impacts results in further declines in total TSA employment and after-tax employment income.
Forestry employment contributes to a relatively diversified economy in the North Coast TSA. Although forest employment would decline as the harvest levels decline, total employment impacts would not be as severe as in other more forestry-dependent communities in B.C.
In Scenario 1, the first employment impacts from the phase-down in harvest levels would not occur until the beginning of decade seven. The composition of the work-force will have changed dramatically by the time the first phase-down begins and it is difficult to predict impacts to the community that far in the future.
In Scenario 2, the initial increase in harvest levels could increase forestry employment in the TSA and provide better employment opportunities for current forestry employees. Higher levels of forestry employment income would create additional spin-off employment.
In Scenario 3, harvest phase-downs would begin immediately with a 2 000 cubic metres per year decline at the beginning of decade one, but it would not be until decade two that unemployment impacts would be felt in the TSA.
The community impacts in Scenario 4 would not occur until decade ten. Scenario 4, with a long-term harvest level of 350 000 cubic metres per year, would sustain a larger labour force than the other harvest forecasts.
The Nisga'a and Tsimshian Nations have communities located inside the North Coast TSA. Haisla Nation communities are located outside the TSA, but some traditional activities take place in the TSA.
The Nisga'a communities are located in the Nass Valley. Forest harvesting and silviculture are important sources of employment. The Nisga'a are concerned that much of their forestry employment is not secure from year to year. They are currently in the process of registering in the Small Business Forest Enterprise Program (SBFEP). The Nisga'a are also active in the commercial fishery.
Tsimshian communities are located throughout the North Coast TSA. Forestry employment is important in the community of Port Simpson. Hartley Bay and Metlakatla do not have any significant forestry employment and are more dependent on commercial fishing. The Tsimshian would like to have better access to employment opportunities in silviculture and harvesting near their communities. The Tsimshian are also concerned that logging activity does not always consider cultural sites when they are encountered.
All First Nations in the North Coast TSA have filed land claims and are concerned with current and future land use activities and the impacts that these activities may have on the forest environment.
It is uncertain how Scenarios 1 and 4 would impact three of the First Nations' main concerns (land claims, employment opportunities, and preservation of cultural and traditional resources). The elevated harvest under Scenario 2 may provide First Nations communities with more opportunity for forestry employment. Scenario 3 may result in a disproportionate impact on aboriginal forestry employment since many of the First Nations forestry initiatives are new and could be the first operations impacted under a harvest decline.
The provincial impacts of the harvest forecasts are summarized in Table ES-2.
In Scenario 1, direct provincial employment attributable to the harvest is 744 PYs annually during the first six decades (including TSA employment of 252). Direct employment then declines gradually until the beginning of decade 13, when it stabilizes at 373 PYs annually. Direct employment income declines from $25.9 million ($1993) annually in the first six decades to $13.0 million (1993) annually beginning in decade 13. With the addition of spin-off or indirect employment, the long-term total employment would be 933 PYs with after-tax income of $25.9 million ($1993). Total employment is therefore reduced by 927 PYs from the current level of 1 860 PYs over a 12 decade period.
In Scenario 2, the elevated harvest would increase direct employment to about 1 059 PYs annually in the first decade, generating after-tax employment income of $36.9 million ($1993) annually. At the decade one elevated harvest level of 854 000 cubic metres per year, indirect employment is estimated at 1 588 PYs, bringing the total employment to 2 647 PYs in the first decade. As the harvest level is phased down beginning in decade two, employment and income are reduced proportionally until the beginning of decade 11, when the long-term employment level is attained. This harvest level would support 373 direct forestry PYs with associated after-tax income of approximately $13.0 million ($1993) and total employment of 933 PYs and $25.9 million ($1993) in income annually.
In Scenario 3, direct
employment is 742 PYs over the first decade generating after-tax
employment income of $25.8 million ($1993). At the decade one
harvest level of 598 000 cubic metres per year, indirect
employment is estimated at 1 112 PYs, bringing the total employment
estimate to 1 854 PYs. Total employment declines by 180 PYs as
a result of reductions beginning in decade two. At the beginning
of decade eight, Scenario 3 experiences its last employment decline
and maintains total provincial employment at approximately 933
PYs annually with employment income of $25.9 million.
Summary of TSA Accounts | |||
| Economic Development: Scenario 1 | |||
| Direct Employment (PYs/year) | |||
| Total Employment (PYs/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Base Case Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 2 | |||
| Direct Employment (PYs/year) | |||
| Total Employment (PYs/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 2 Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 3 | |||
| Direct Employment (PYs/year) | |||
| Total Employment (PYs/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 3 Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 4 | |||
| Direct Employment (PYs/year) | |||
| Total Employment (PYs/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 4 Harvest Level ('000 m³/year) | |||
| Government Revenues ($1993 M/year) | |||
| Total Revenues Scenario 1 | |||
| Total Revenues Scenario 2 | |||
| Total Revenues Scenario 3 | |||
| Total Revenues Scenario 4 | |||
| Community (Non-TSA)
Non-TSA community impacts delayed for at least six decades. | Would provide employment for displaced workers from other TSAs. | ||
| Environment
Reduces old growth forest lands over the next 200 years. Specific environmental impacts difficult to determine. | Higher rate of conversion of old growth forest to second growth forest | ||
Summary of TSA Accounts | |||
| Economic Development: Scenario 1 | |||
| Direct Employment (PYs/year) | |||
| Total Employment (PYs/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Base Case Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 2 | |||
| Direct Employment (PYs/year) | |||
| Total Employment (PYs/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 2 Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 3 | |||
| Direct Employment (PYs/year) | |||
| Total Employment (PYs/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 3 Harvest Level ('000 m³/year) | |||
| Economic Development: Scenario 4 | |||
| Direct Employment (PYs/year) | |||
| Total Employment (PYs/year) | |||
| Direct After-Tax Employment Income ($1993 M/year) | |||
| Total After-Tax Income ($1993 M/year) | |||
| Scenario 4 Harvest Level ('000 m³/year) | |||
| Government Revenues ($1993 M/year) | |||
| Total Revenues Scenario 1 | |||
| Total Revenues Scenario 2 | |||
| Total Revenues Scenario 3 | |||
| Total Revenues Scenario 4 | |||
| Community (Non-TSA)
Non-TSA community impacts delayed for at least six decades. | Employment reductions begin immediately | ||
| Environment
Reduces old growth forest lands over the next 200 years. Specific environmental impacts difficult to determine. | Specific environmental impacts difficult to determine. | ||
In Scenario 4, the harvest level is maintained at 600 000 cubic metres per year for the first nine decades and then phase-downs of 10 percent per decade occur until the long-term harvest level of 350 000 cubic metres per year is reached in decade 15. This results in direct employment being maintained at about 744 PYs over the first nine decades generating after-tax employment income of $25.9 million ($1993). By decade 15, the harvest level would have dropped to 350 000 cubic metres per year providing 434 PYs of direct employment and $15.1 million ($1993) in associated after-tax employment income. Total provincial employment at the long-term harvest level would be 1085 PYs annually with an associated employment income of $30.1 million (1993).
Approximately 66 percent of the forestry labour force in the North Coast TSA comes from communities outside the TSA. Communities from Vancouver Island, the Lower Mainland, and the interior of B.C. all benefit from the harvest in the North Coast TSA. Maintaining the harvest at 600 000 cubic metres per year for at least the first six decades under Scenario 1 and Scenario 4 would offer stable employment for those workers currently affected by the North Coast TSA forest industry.
At the harvest level of 600 000 cubic metres per year approximately $14.8 million ($1993) in government revenues are generated annually. Under Scenario 1 this level would be maintained until decade seven when government revenues decline to $13.3 million ($1993). In decade 13, Scenario 1 reaches the long-term harvest level and generates $7.4 million ($1993) in government revenues. Scenario 2 generates $21.1 million ($1993) in government revenues in decade one. After which, declines of approximately 10 percent are experienced until decade 11 when the long-term harvest level is reached. Scenario 3 provides $14.8 million ($1993) in government revenues in decade one before declines of 10 percent reduce revenues to $7.4 million in decade eight. Scenario 4 maintains the $14.8 million ($1993) level for the first nine decades and then declines to its long-term harvest level which generates government revenues of $8.6 million annually.
Policy changes announced in April, 1994 as part of the Forest Renewal Plan will result in significantly higher stumpage revenues. Stumpage revenues will vary with changes in lumber prices and it is not possible to precisely project the impact of these new policy changes at the TSA level until the new policy has been implemented for a period of time.
Since 1987, a number of provincial guidelines and enforcement measures have been introduced to improve the management of B.C.'s forest resources. In the North Coast TSA, areas with significant wildlife, environmental, and visual quality are identified and forest management adjusted to maintain the identified values.
Due to the sensitive nature of habitat and the forestry techniques employed in the North Coast TSA, environmental concerns have centred on log storage and booming near sensitive estuaries, impacts on streams, and possible impacts on buffer zones from A-frame activities along shore edges.
Under Scenario 1 an average of 950 hectares would be harvested per year for the first six decades. Over the next 120 years old growth stands would be replaced with younger aged second growth stands. In Scenario 2 this conversion of old growth to second growth would occur more quickly.
The harvest forecasts of either Scenario 1 or Scenario 4 would maintain current employment, employment income, and government revenues for at least six decades. The harvest forecast of Scenario 2 would immediately stimulate an increase in employment, employment income, and government revenues. Employment, employment income, and government revenues would begin to decline in the first decade under the Scenario 3 harvest forecast.
With the exception of Scenario 3, the scenarios assessed would maintain harvest levels at or above the current AAC for four to nine decades. The nature of the economy of forest dependent communities and the province in 40 to 90 years is impossible to predict. The impacts of harvest reductions that far in the future are also impossible to predict. Clearly, though, the assurance of a relatively stable wood supply for several decades would contribute to stability for operations and communities harvesting and processing TSA wood. In the event of AAC reductions, local economies within the TSA are relatively diversified and may be more able to adapt to changing economic conditions than other parts of the province. In addition, the Forest Renewal Plan (FRP) announced in April 1994 will focus on sustaining jobs and communities. The FRP will provide opportunities for further economic diversification and development in the forest sector, e.g., value-added wood processing and silviculture. The impacts of the FRP have not been included in this analysis.
The preference of First Nations cannot be clearly identified because of the diverse range of concerns and views held by the First Nations communities in the North Coast. Stable or increased harvest levels may offer more opportunity for First Nations involvement in the forest industry. On the other hand, high rates of harvest raise First Nations concerns about non-timber values and traditional and cultural resources.
Long-term environmental
impacts under all scenarios would be similar as current management
guidelines are incorporated in all scenarios. Currently 83 percent
of the timber harvesting land base has timber which is above minimum
harvest age. In Scenario 1, the conversion of old growth stands
to second growth stands would take place over the next 12 decades.
The higher harvest rate of Scenario 2 would cause this to occur
sooner. Scenario 4 would maintain a conversion rate similar to
Scenario 1 but over a larger land base. Under Scenario 3, lower
volumes per hectare requires more area be harvested to attain
the AAC. This would result in the fastest conversion of old growth
forest to second growth forest. In general the widespread conversion
of mature forest to immature forests would cause changes in the
distribution and populations of wildlife species.