Wednesday, 16 July 2014

China wants our logs? Get off our butts and move them out to the highest bidder .

BC law lets one log in fourteen be exported. As the Fraser Institute reports, the seller has to beg locals to pay $74/cubic m. before being allowed to sell a tiny fraction abroad at $108. The foreigners pay more because they value that log more than we do. The difference is wealth we willfully robs from ourselves.

There's a chorus of BC boosters who neither buy nor sell logs themselves but have plenty of opinion about who should. Forget those who get the vapours every time a tree falls near a media outlet. (A fevered link).  The argument that we should keep lumber milling jobs in BC sounds pretty good. The reality is we aren't prepared to cut those logs to the sizes and quantities the Chinese need. The government's own Forestry Innovation Investment marketing agency says in a one page summary that although some of our cheap 2x4 gets used in China for concrete forms, we offer 1 1/2" thick boards but they want a minimum of 1-7/8" for furniture blanks and so on. We sell hardly any high end wood to China because we can't be bothered milling it to their specs.    I ran into this once when an old Swiss gentleman came to my shop looking for roof trusses which he wanted built from metric wood dimensions unlike any I'd ever seen to fit on a metric-dimensioned shed of a size no one else in BC would bother building.
From the Fraser Institute's report on log exports:
"In 2011, B.C.’s forestry and logging sector contributed $1.77 billion to the province’s GDP (the total dollar value of all goods and services produced in B.C.). That year, coniferous logs sold domestically on the Vancouver log market for $74.28 per cubic metre while exports sold for $108.35. Only seven per cent of the 2011 log harvest was exported, despite foreign market demand for B.C. logs".
Booms in Howe Sound

It sounds like the communist farm commune: You have to sell your product to a designated buyer at a low price and only the bit you grow on your own plot can you freely sell. Why on earth is the provincial government the gate keeper, the dog lying in the manger door that keeps the other animals from coming in and out to munch in peace? It's because, in BC, the government owns almost every hectare of land from north to south and this makes them an easy target for rent seeking.  (" When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation" Wikipedia.)

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