May 27, 1999

Gerry Waters

Timber Accord Advocate

British Columbia

Via Fax:  604-844-1888 

Dear Gerry: 

RE:  The Strategic Economic, Social, and Environmental issues facing the forest sector and BC's overall economy.  

Thank you for your phones call in response to my brief letter of July 20, 1998.  As I addressed to you, the economic and environmental issues have been well known since the seventies. Unrecognized and thus unsolved the issues have become acute during the nineties.  During the nineties BC is facing the terminal stage of the resource-driven, tariff-regulated, post cold war economy and a shift to an open, educational, technology-driven economy and marketplace.  

The core problem is that BC lacks an educational, industrial, social, and environmental audit and analysis process to identify and recognize the economic strategic issues the province is facing.  

That raises fundamental questions about our government institution’s economic behavior and economic and social responsibility.   

The community's economic engine is a competitive private industry and business sector - - necessary to combine natural, human, capital (that which is not money) and knowledge resources to generate and distribute wealth through well-paid jobs in business and industry.  Distributing wealth via tax and welfare system is less effective, more expensive and of course less dignified.   

It is business and industry's task to identify and adapt to the changes in the economy and marketplace in order to develop the business under control and profitability.   

The government’s task is to provide an internationally competitive legislative framework within which business and industry can develop, and to provide the services which the pricing mechanism and private sector fails to provide.  

That includes identifying and addressing overall strategic economic and environmental issues and sharing them with business and industry before the problems show up in socioeconomic and environmental problems.   

For example, the inevitable need for radical structural changes in the Pulp and Paper sector have been well known for long time. 

In this regard, both the government and the private sector in BC have failed.  Outdated government systems, fueled by previously abundant resources, have made it possible for both the private and government sector in BC to ignore the changes in the global economy and marketplace.  

Business and industry will simply try to survive within whatever framework the government establishes.  Individual businesses will also utilize any government programs that are available, even if they do not make long term sense for the industry or province as a whole.  It is foolish to believe that business and industry will compensate or make-up for flaws in the government system. That is simply not business and industry’s task.

Ultimately, British Columbia’s resource sectors can no longer fuel the economy and tax base with low-educated, well-paid jobs.  Further a large part of the population in Canada in general has seen their income, in real purchasing power, fall drastically since the early seventies, creating a few well-off and many poor.   This in turn depreciates the overall social satisfaction and standard in the community, causing social problems and polarized sociopsychiatric reactions.  

In order to secure social satisfaction for the present without compromising the ability of future generations to meet their needs our government institutions needs to replace outdated post and cold policies and programs with modern approaches.   

The problem is not business cycles or the collapse of the Asian "balloon".  It is fundamental changes in the economy and marketplace. While still flying, the financial balloon in North America also lack support in the underlying.  The hope is that the balloon can be landed more safely -- if not the less well-off pay the highest price.  

 We  have deep concern for the future for the people of this province.  Concerning the forest sector I believe it urgently needs a strategic audit and analysis of the present approach and programs, and changes to those, which contradict their own purpose.  I would further recommend taking additional short-term initiatives, particularly in the value-added sector, awaiting long term changes to take effect.

 WeI would be glad to assist where we can.  To contact me, or for additional information.  I would also draw your attention to our publishing section page, which includes some further comments on BC issues.

 Sincerely,  

OISD