Monday, September 15, 2008

The Economic Issue For the Federal Election

The biggest economic issue for the federal election is the Mountain Pine Beetle. The economic cost to Canada from this one pest is in the order of three billion cubic metres of wood. The value of this wood to the Canadian economy is about one trillion dollars.

This is is just from the lodgepole pine in BC, Canada's single most important forestry tree. If it does spread east, the economic damage to the country could be as much as 30% to 40% higher.

The impact is going to be felt over a long time and not in one year. We are looking at a loss of close to half of BC's annual allowable cut within the next ten years. That is 1/4 of the Canadian forestry industry.

The loss to the federal and provincial governments will be about $4 billion a year in revenues. The economy will have come up with an extra $12 billion in annual economic activity to make up for the lose of forestry.

Forestry is least goverment subsidised industry in this country and not surprisingly the most productive sector in our economy. Our dollar is dependent on the export earnings of forestry and engery. Knock out one large part of this, the least subsidised part, and there will be a long term negative impact on the value of the Canadian dollar. Without the roughly $40 billion in forestry exports Canada would have a trade deficit and more importantly a current account deficit - we would have more money flowing out of Canada than in.

The following communities will be dramatically reduced in size

  • Quesnel
  • Williams Lake
  • 100 Mile House
  • Vanderhoof
  • Smithers
  • Burns Lake
  • Mackenzie
  • Fort St James
  • Clearwater
  • Blue River
  • McBride
  • Valemount
  • Fraser Lake
  • Houston
  • Merritt
  • Princeton
These towns are likely to see more than 1/2 their populations leave by 2025. 50 000 to 80 000 people will leave these communities by that date. The schools will close, the hospitals will close, the stores will close, the houses will be empty.

Prince George and Kamloops will both stagnate.

This is the biggest demographic economic re-location in Canada since the depression.

This is a bigger problem than all the fishery problems we have seen. This is a national economic disaster and no one is making it the number one issue in Ottawa.
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