British Columbia boasted the fastest provincial economic growth in Canada last year. A 3.9 percent increase in GDP easily outstripped the national average of 2.8 percent. The headlines in today’s Vancouver Sun trumpet the forest industry as a principal cause. But therein lies a certain danger.
Just two days ago, the Vancouver Sunprominently warned that BC’s forest industry would soon contract. A weakening US housing market, coupled with decreased buying power from the US dollar, will reduce the import market and drive down lumber prices by 10 percent in each of the next two years, according to economic forecasters.
BC’s recent economic growth is certainly encouraging, but over-reliance on the forest industry is potentially cause for concern. Forestry has a troublesome history of being unpredictable—and that volatility can result in economic whiplash. All too often, aggressive cutting suddenly gives way to layoffs and idled mills when forest products hit the doldrums. It’s wise to prevent that boom-bust effect from rippling throughout the entire province.