Thursday, June 5, 2014

Why have our trees lost half their value?

BC Stats released an updated report 'British Columbia Origin Log Exports' and I extracted data to produce these graphs. The statistics show the volume of raw logs leaving the province continues at record levels. This demonstrates the average monthly volume of exports over time.


I've written much about the subject of log exports. Click here and scroll through the various articles. The quantities, loaded mostly on ships bound for Asia, tell one part of the story but there is another important trend line and it's one that points in a different direction.


Using the Bank of Canada inflation calculator, I converted the dollars reported by BC Stats to 2013 equivalents. As a result, the second graph shows the average unit values realized over 20 years. During that period, the worth of a cubic metre of exported timber has dropped to about half the starting point. There is no single reason that explains this change but one relates to a problem that faces most modern states. Global businesses tends to arrange affairs to realize profits in jurisdictions where tax obligations are least.

Tax auditors regularly address abuses related to transfer pricing. It is a complicated matter that may see outgunned tax officials facing corporate officials backed by highly paid consultants. With respect to log exports, value is not merely a function of volume. Species, condition, end use and other factors influence value.

In the words of one accounting paper,
"Transfer pricing practices are responsive to opportunities for determining values in ways that are consequential for enhancing private gains, and thereby contributing to relative social impoverishment, by avoiding the payment of public taxes."
In British Columbia, the 14 year long campaign to reduce "red-tape" has achieved one particular thing. Reducing the size of government has also reduced government's capacity to ensure that organizations exploiting natural resources are paying a fair share for those public assets. The BC Liberal government has ensured that capacity is inadequate.


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11 comments:

  1. The Ancient Forest Alliance issued this release 1 1/2 years ago,

    "...potential ownership of vast tracts of British Columbia’s private forest lands by the Chinese government could negatively impact BC’s environmental laws, forestry jobs, and the rights of First Nations in light of the proposed Canada-China Foreign Investment Promotion and Protection Agreement (FIPA).

    Island Timberlands is BC’s second largest private landowner, with over 254,000 hectares of private forest lands on Vancouver Island and the Sunshine Coast. The company is expected to close a $100 million deal soon with the China Investment Corporation (CIC), one of the world’s largest sovereign wealth funds owned by the Chinese government...

    “'The Communist Party of China is about to become one of the biggest landowners in British Columbia..."

    http://www.ancientforestpetition.com/news-item.php?ID=528

    Anyone who says only low grade pulp logs are on the ships bound for China is a fool or a liar. BC is not only losing secondary processing jobs, it is being cheated of the stumpage that was once paid for timber logged in this province in the days when transfer price games were impossible.

    ReplyDelete
  2. Harper's sell out of Canada to Communist China, began way back in Campbell's reign of terror in BC. We just had another mill shut down in BC because, of a shortage of timber. Yet freighter after freighter of BC's raw logs, sail to China. The Campbell/Clark BC Liberals have thieved and sold everything out of BC, they got their dirty hands on. Every time a mill shuts down in BC? Another mill in Communist China is built.

    Fadden of CSIS warned of Communist China's huge inroads into Canada. BC was specifically mentioned as, Campbell had already given much of BC to Communist China. As hard as BC citizens tried to warn, Harper is a snake in the grass? No-one would listen. This was years ago now.

    Communist China is menacing and provoking other countries. Harper pitches a tantrum over, Russia's annexation of the Crimea. Harper says absolutely nothing of Communist China, doing the very same damned thing.

    I signed the petition to protect our ancient forests from Communist China, a very long time ago. I also signed the petition against, Harper's FIPA deal with Communist China, also very long ago.

    Canadians are very well known for, sleeping through everything. People don't listen and they still don't listen. Harper knows that very, very well.

    Harper and his Cabinet mull a, massive Chinese project in our High Arctic.
    Dec 27/2012
    www.theblobeandmail.com

    The quiet parade of, Chinese Military Brass have been visiting Canada
    03/26/2014
    www.embassynews.ca

    I doubt anyone will wake-up, on this underhanded tactic of Harper's nor the corrupt BC Liberals either? Christy is permitting Communist China to, have their culture and history taught in our schools. However, people will sleep through that too.

    ReplyDelete
    Replies
    1. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/harpers-cabinet-mulls-massive-chinese-resource-project-in-arctic/article6752413/

      Delete
  3. Can we trust our politicians to act in our best interest.?
    Ban raw log export
    Something BC Ombudsman and or auditor General /NDP must look into.
    .Bc politicians not sitting for 120 days now.
    http://fullcomment.nationalpost.com/2012/01/17/terry-glavin-china-has-our-forests-now-were-sending-our-oilfields-too/

    ReplyDelete
  4. http://www.theguardian.com/commentisfree/2014/jun/02/control-nation-states-corporations-autonomy-neoliberalism

    ReplyDelete
  5. G. Barry StewartJune 6, 2014 at 7:13 AM

    In other words: from 2000 to present, we've had to cut down about twice as many trees just to stay at the same value. That's crazy!

    ReplyDelete
  6. Value added what a concept

    http://www.wyomingbusinessreport.com/article/20140605/NEWS/140609959

    ReplyDelete
    Replies
    1. Clickable link: $1.8B natgas-to-diesel plant planned in Cheyenne

      Yes, a radical concept indeed. But, not something that interests multinationals doing business in Canada. They will only build procesing facilities in places where tax, labour and environmental laws suit their ways of doing business.

      Delete

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