PRINCE GEORGE TSA

SOCIO-ECONOMIC ANALYSIS

Executive Summary

Introduction

• The purpose of this report is to present a profile of the Prince George TSA, and to assess potential socio-economic and environmental implications of changing the timber harvests. This Socio-Economic Analysis is one in a series of four reports being prepared for the Prince George TSA as part of the province-wide Timber Supply Review and will assist the Chief Forester in determining the Allowable Annual Cut (AAC) for the TSA.

Area Description

• The Prince George TSA encompasses approximately 7 513 000 hectares in the north-central interior of British Columbia, and is the single largest management unit in the province. Administration is divided among the Prince George, Vanderhoof, and Fort St. James Forest Districts.

• Flat to rolling landscapes of the north central interior plateau typifies much of the Prince George TSA, and primarily support sub-boreal spruce forest types. To the northeast and northwest are mountain systems, and throughout much of the TSA are numerous lakes.

Community Profile

• The 1991 Census estimates the population of the Prince George TSA at 96 535. The largest population centres are Prince George (69 653), Vanderhoof (4 023), and Ft. St. James (2 042), and there are many smaller communities. Almost all communities are situated along the major transportation corridors, Highways 16 (east - west) and Highway 97 (north - south), and the BCR and CNR Railways. Overall the population is fairly young, and the level of education varies between communities from close to the provincial average, to below the average. Population trends vary between individual Forest Districts and communities in the TSA.

• Compared to other areas of the province, forestry based employment in the TSA accounts for a relatively high proportion of basic sector income.

Prince George Forest District

• This District encompasses about 44% of the TSA, includes 84% of TSA population, most of who reside in Prince George, and has a history of relatively steady population increase.

• In this District, the major industry is forestry and production of lumber, pulp and paper. Other important sectors include agriculture, manufacturing and services, outdoor recreation and the public sector.

• Prince George is strategically located at the junction of Highways 16 and 97, and two rail lines, the BCR and CNR, and has capitalized on this position to become the regional capital for central and northern British Columbia. Expansion and diversification of the city's regional roles in administration and education, manufacturing, retail and distribution, have helped reduced Prince George's dependence on forestry and improve economic stability. The city, however, has a persistent problem of relatively high unemployment.

Vanderhoof Forest District

• This district encompasses 16% of the TSA, with 11% of the population. The major centres of Vanderhoof and Fraser Lake have experienced strong population increases in recent years, resulting in an increased housing demand. First Nations peoples account for 12% of the district's population.

• Forestry is the area's largest industry and employs about 27% of the area's labour force as well as additional indirect employment. Other sectors include agriculture, outdoor recreation and tourism.

Fort St. James Forest District

• This District comprises about 40% of the TSA, and is sparsely populated with about 5% of the TSA population, about 45% of whom are First Nations peoples. Fort St. James is the main settlement, and has experienced slight population increases in recent years.

• The forestry sector dominates the Fort St. James economy, with about 40% of the labour force employed in the forest industry. Also important is the public sector, retail and service, tourism and outdoor recreation sectors.

• A considerable portion of the timber harvested in this district is milled outside the
  Fort St. James area.

First Nations

• The Prince George TSA includes traditional lands of the Carrier Sekani, Chilcotin and Gitskan Tribes with 12 bands comprising about 9% of the TSA population.

• The major forestry involvement of First Nations peoples is through band-owned companies, many of which are attempting to increase forestry operations. First Nations peoples are also involved in commercial tourism, retail, land lease, food fishery, and natural resource husbandry. In some bands, their economy relies on traditional activities of trapping, hunting and guiding.

First Nations issues include:

• Treaty negotiations;

• Logging impacts on fish and wildlife resources and sacred sites, and contamination of food sources from pesticide spraying;

• Social problems associated with unemployment.

Environmental Profile

• The Prince George TSA contains an ecological diversity contributed by 10 distinct ecosections representing the Fraser Plateau, Fraser Basin, Eastern Continental Ranges, Southern Rocky Mountain Trench, and the Omineca Mountains.

• Vast unsettled areas provide habitat for a wide array of wildlife species. Numerous lakes, rivers and streams support a large and diverse fisheries resource including two provincially significant salmon production systems, a provincially significant wilderness Steelhead fishery on the Sustut River, and a freshwater sport fishery.

Economic Profile

Guide Outfitting

• Forty-four guide outfitters are licenced to operate in the TSA, 29 of which are TSA residents. Guide outfitting has an annual economic impact in the Prince George TSA of approximately $1.5 million, and total employment impact of about 42 Person Years (PYs).

Commercial Fisheries

• The annual commercial value of the salmon (sockeye and chinook) resource originating in the TSA is about $40 million.

Sport Fishery

• Twenty-six fishing lodges operate within the TSA. They provide an employment base of about 42 PYs and reflect the commercial significance of the non-resident freshwater sport fishery. Non-guided sport fishing in the TSA is predominantly local.

• The Steelhead fishery of the Sustut River offers good potential for future development.

Tourism and Outdoor Recreation

• Sport fishing is the leading outdoor recreation activity in the TSA in terms of numbers of non-local users and commercial value. Other activities include camping, hunting, boating, horse trekking, hiking, kayaking, canoeing, cross country skiing, snowmobiling, mountain biking, caving and mountaineering.

• The other source of non-local tourism is from in-transit highway travelers, many of which are from the USA traveling to Alaska and the Yukon. Wilderness resources in parts of the TSA (especially in the Fort St. James District) are a destination attraction, primarily for European tourists.

Agriculture

• Agriculture is an important activity in both the Prince George and Vanderhoof areas for forage crops, beef and dairy cattle and grain production.

• Dependence on Crown land for grazing is relatively small.

Economic Profile - Forestry

TSA Land Base

• About 46% of the TSA land base is currently available for timber harvesting. The TSA exhibits a well-balanced stand-age composition, with a relatively high proportion of 40 to 140 year old stands that can support timber harvesting in the medium term. Pine, spruce, and balsam comprise the predominant merchantable species.

• Approximately 88% of the timber harvesting land base is managed for integrated resource management with emphasis on resource development. For the remaining area, special forestry management practices apply in designated management zones for Local Resource Use Plans, Treaty 8 Land Claim Moratorium Areas, Visually Sensitive Zones, Wildlife Management Zones, and the Bowron Watershed Zone.

TSA Harvest

• The current (1994) AAC is 9 073 661 m3 most of which is apportioned between Forest Licences (about 80%), and the Small Business Forest Enterprise Program (SBFEP). Major forest industry operations depend on Forest Licence and SBFEP volumes from the TSA for approximately 78% of their fibre supply needs, with the remainder coming from TFLs and other TSAs (which are also under review), and private sources.

• On the whole, the lumber production capacity of mills in the TSA exceeds the AAC apportionment by about 2.9 million m3. This volume is attained from non-TSA sources, e.g., TFLs, private land, and other TSAs.

Forest Industry Employment and Economic Value

• It is estimated that the current AAC of 9 074 000 m3 supports 5807 PYs of direct forest industry employment in this TSA; indirect/induced employment accounts for approximately 5226 PYs; for a total of 11 034 PYs. Associated with this employment total is an estimated annual employment income of $327.1 million, and $38.5 million in provincial stumpage, income tax, and general tax revenues.

Harvest Scenarios

• Three harvest scenarios were chosen from the Prince George Timber Supply Analysis to provide a basis for the evaluation of harvest changes. The choice of these scenarios does not imply a preference or a recommendation. The scenarios are as follows:

• Scenario One: The long term harvest level is maintained indefinitely at 9 630 000 m3, (6.1% above the current AAC).

• Scenario Two: Harvest levels are increased to 10 162 500 m³ for the first five decades, 12% above current AAC for five decades, and then reduced to the long- term harvest level of
  9 630 000 m³.

• Scenario Three: The long term harvest level is reduced by 15.5% to 7 650 000 m³ and maintained indefinitely.

Implications of Timber Harvest Scenarios

• Summaries of TSA and province-wide forest sector economic impacts are found in Tables E.1 and E.2. Table E.3 highlights key implications to the community, fisheries, guide outfitting, outdoor recreation and tourism, agriculture, first nations and the environment.

Table E.1: Prince George TSA Impacts

		Scenario 1		Scenario 2			Scenario 3
		CURRENT	Decades 1-20	CURRENT	Decades 1-5	Decades 6-20	CURRENT	Decades 1-20
	Harvest (m3)	9,073,661	9,630,000	9,073,661	10,162,500	9,630,000	9,073,661	7,650,000
	Variation		556,339		1,088,839	-532,500		-1,423,661
Economic Impacts
Employment (PY)	Direct	5,807	6,163	5,807	6,504	6,163	5,807	4,896
	Indirect/ Induced	5,226	5,547	5,226	5,854	5,547	5,226	4,406
	Total	11,034	11,710	11,034	12,358	11,710	11,034	9,302
	Variation		676		1,324	-648		-1,732
Employment Income (1993 $mil.)	Direct	$203.5	$215.9	$203.5	$227.9	$215.9	$203.5	$171.5
	Indirect/ Induced	$123.6	$131.2	$123.6	$138.5	$131.2	$123.6	$104.3
	Total	$327.1	$347.2	$327.1	$366.4	$347.2	$327.1	$275.8
	Variation		$20.1		$39.3	-$19.2		-$51.3

a. After-tax income

Table E.2: Summary of Provincial Impacts (includes TSA Impacts)

TSA		Scenario 1 Impacts		Scenario 2 Impacts			Scenario 3 Impacts
		CURRENT	Decades 1-20	CURRENT	Decades 1-5	Decades 6-20	CURRENT	Decades 1-20
	Harvest (m3)	9,073,661	9,630,000	9,073,661	10,162,500	9,630,000	9,073,661	7,650,000
	Variation		556,339		1,088,839	-532,500		-1,423,661
Economic Impacts
Employment (PY)	Direct	5,952	6,317	5,952	6,667	6,317	5,952	5,018
	Indirect/Induced	8,928	9,476	8,928	10,000	9,476	8,928	7,528
	Total	14,881	15,793	14,881	16,667	15,793	14,881	12,546
	Variation		912		1,786	-874		-2,335
Employment Income (1993 $mil.)	Direct	$211.0	$223.9	$211.0	$236.3	$223.9	$211.0	$177.9
	Indirect/Induced	$211.2	$224.2	$211.2	$236.6	$224.2	$211.2	$178.1
	Total	$422.2	$448.1	$422.2	$472.9	$448.1	$422.2	$356.0
	Variation		$25.9		$50.7	-$25.9		-$66.5
Provincial Government Revenue ($mil/year)
	Royalties and Stumpage	$280.9	$298.1	$280.9	$314.6	$298.1	$280.9	$236.8
	Personal Income Tax	$46.1	$48.9	$46.1	$51.6	$48.9	$46.1	$38.8
	Other Taxes	$53.5	$56.8	$53.5	$60.0	$56.8	$53.5	$45.1
	Total	$380.5	$403.8	$380.5	$426.2	$403.8	$380.5	$320.8
	Variation		$23.3		$30.3	-$22.3		-$59.7
Federal Government Revenue ($mil/year)		$100.4	$106.5	100.4	$112.4	$106.5	$100.4	$84.6

Table E.3 Summary of Non-Timber Prince George TSA Impacts Scenario 1 and 2

	Scenario 1	Scenario 2
Community Impacts	Maintains or increases industry operations from present levels.	Increases industry operations from present levels.
	Helps maintain production levels as temporary wood supplies are phased out.	Helps maintain production levels as temporary wood supplies are phased out.
	Could help offset the impact of reduced fibre supplies from other sources,within and outside of the TSA.	Could help offset the impact of reduced fibre supplies from other sources, within and outside of the TSA.
Guide Outfitting	More risk to game populations from increased road access for hunters.	More risk to game populations from increased road access for hunters, and habitat change.
Trapping	Increased impact on old-growth dependent species.	Greatest impact on old-growth dependent species, e.g., pine marten.
Fisheries	Increased potential for habitat damage and increased user access that may lead to over-fishing.	Most potential for habitat damage and increased user access.
Outdoor Recreation and Tourism	Higher potential for negative impact on aesthetic values. No clear choice between scenarios because many local residents involved in outdoor recreation and also employed directly or indirectly by the forest industry. Road access to new recreation opportunities may balance impacts of timber harvesting.
Agriculture	Minimal impact; may increase availability of Crown rangeland for grazing.
First Nations	Increased opportunity for involvement in forest industry. Concern about negative impacts on traditional and ecological integrity of forest land.	Increased opportunity for involvement in forest industry. Concern about negative impacts on traditional and ecological integrity of forest land.
Environment	Increased pressure on environmental values and wildlife habitat.	Greatest pressure on environmental values and wildlife habitat. Fastest conversion of older age stands to second growth stands.

Table E.3 Summary of Non-Timber Prince George TSA Impacts Scenario 3

	Scenario 3
Community Impacts	Estimated direct job loss of approximately 910 PYs employment in the TSA.
	Estimated indirect/induced job loss of 820 PYs, primarily in the Prince George area. Total estimated TSA job loss of 1730 PYs (direct and indirect/induced).
	May threaten the viability of some smaller communities with single mill operations
Guide Outfitting	Lower harvests provide greater flexibility to retain wilderness and may reduce or slow road development.
Trapping	Reduced impacts of harvesting on trapping activity and target species that are old-growth dependent.
Fisheries	Reduced risk of negative impacts on fisheries: -less potential for habitat damage -less short-term increase in user access to fisheries, thus less risk of over-fishing
Outdoor Recreation and Tourism	Less potential for deterioration of aesthetic quality of fishing and outdoor recreation experiences; greater flexibility to retain wilderness environment in certain areas and maintain this tourism amenity.
Agriculture	Minimal impact.
First Nations	Less potential for negative impact on traditional and ecological integrity of forest land. Greater competition for wood fibre will make new forest industry development more difficult.
Environment	Less environmental impact and more flexibility to protect areas like old-growth habitat.

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