1. R EFLECTIONS ON THE S TATE OF THE F OREST I NDUSTRY No good crisis should ever be wasted Presentation to the MOFR Engineers February, 2009

2. About Me A Lawyer but not proud of it. A career public servant all over the place for a long time. Lots of private sector experience Worked in and around the forest sector for some time, most intensely over the last four years.

3. Today Three themes – First, The state of the industry – Second, lessons from safety and the BCFSC – Third, the role of public servants going forward

4. First Theme The State of the Industry

5. Tough but exciting times … Outline the forestry safety challenge Industry’s response The move to a new model or paradigm BUT FIRST … Why we should all care about the state of the Forest Sector!

6. We need a new press agent! The “perfect storm” – Bad news, every day. …FOREST CRISIS DEEPENS! … … NO REBOUND ‘TILL 2011! … … COMPANIES IN BANKRUPTCY … … COMMUNITIES PLEAD FOR HELP … … 5,000 JOBS LOST! … … FEDERAL FUNDS FOR COMMUNITIES! … Common view of forestry. Not as important now as before. Environmentally Unsound. Low tech. Not part of the “New Economy” So, let’s start with a bit of: MYTH and REALITY

7. MYTH ONE : A Sunset Industry FACT: Forestry is the largest and most sustainable of BC’s resource sectors – The forest inventories are higher now than twenty years ago – The level of harvest is high and sustainable – The fibre basket is diverse and strong and will support a large and vibrant industry for years to come. – Companies are many, diverse and dynamic

8. Important to the provincial economy – Annual sales of 20+ billion, almost all exported – Payments to provincial government 3.8+ billion 14% of Consolidated Revenues Significant additional benefits to local and regional gov’t – 235,000 employed, or 4.5% of workforce – Well paid – Average compensation = $84,000/worker 191% of Provincial Average High economic multipliers Key to many regions

9. Export dependent – Canada is a world player – BC is the Largest national producer – National leader in exports in NA, Europe and US – Virtually all production exported, most to US – Preponderance of lumber Canada supplies 32% of US demensional lumber, 50% from BC BC is the largest export of Wood Products to Japan and Europe

12. MYTH TWO : Environmentally Unsound FACT: BC and BC’s forest industry among most environmentally friendly – Over 12% of land base in parks and protected areas – Largest % of environmentally certified harvested forests in the world – Stringent environmental standards and integrated resource management – Maximum use of resource

13. MYTH THREE : Not Part of “New Economy” FACT: Forestry is part of the new economy – Large research capacity supports innovation and experimentation – Part of the green building revolution – On the cutting edge of Climate change – Part of the sustainable energy future – An exciting future if we let it.

14. MYTH FOUR: When the markets come back everything will go back to the way it was. FACT: No, it won’t. There will be less fibre in some areas (pine beetle, climate) The industry will be leaner, smaller Important changes in markets and focus Fundamental readjustments will occur New business models will emerge It will be different and, in many ways, better, if we let it.

15. Time for a New Paradigm Just what is a paradigm anyway? – “A set of assumptions, concepts, values, and practices that constitutes a way of viewing a current reality for the community or group that shares them.” A paradigm shift – This is the difficult and exciting period when the shift from one model to the other occurs.

16. Building the New Paradigm We are in the midst of the shift – An exciting time We need: – New approaches, new assumptions, new models and new ways of viewing and understanding our forests and the role they play Much needs to change and we will make lots of mistakes

17. Building the New Paradigm Need to learn to play better with other sectors We need to put the forest back into forestry We need to re-examine the role of government in the management of this public resource We need to adjust to the new factors and realities of Climate Change, green energy and the role of First Nations We need to think of forests as essential PUBLIC infrastructure We need to invest more in the future, less in the past

18. Second Theme Lessons from the BCFSC

19. An Unacceptable Safety Record High rates of fatalities and injury A risk taking culture Lack of sector wide approaches an systems Lack of consistent and rigorous training Lack of timely safety information

20. Industry’s Commitment To Eliminate Fatalities and Serious Injuries by: – Changing our Safety Culture – Developing competent and confident workers – Ensuring Safety Aware Companies – Encouraging safe laws – Improving safety information We have to “do” safety differently “One definition of insanity is to continue to do the same thing and expect a different result.” -- Albert Einstein –

21. Safety as a Priority The Wisdom of Dilbert For Safety to REALLY be our “TOP” priority, it must be essential to success

22. The Response SAFE Companies Training and Certification TruckSAFE Improving Information Responding to emerging issues Most Importantly, the way we think about safety has changed. The industry is building a new paradigm.

23. We are making a difference Important changes from 2005 to 2008. Incidents and costs decreasing The momentum is there Can it be maintained?

24. Government has been key The change was led by government Commitment from Ministers to safety Commitment from MOFR Action by Timber Sales and others – Dedicated folk – Real action – Real change Government leadership was essential

25. Theme Three The Role of the Public Service going forward

26. Public Servants must lead The role of government is essential in developing the new paradigm The public service needs to lead the change Who better to protect the public resource than public servants The public service was key to the changes in our views of safety So also will it be key to changed views of forestry

27. OUR STATE OF MIND The present situation is serious but it will come to an end, and we need to be ready for it. We need to remain positive, and there is much to be positive about

28. Areas of Concern The state of the industry The industry will rebound, but it will not be the same industry. How do we prepare? – Looking forward to a new industry – Prepare for the future, not dwell on the past – The lesson of General Mikhail Kutusov NO ONE LIKES A COMPLEX, DIFFICULT, LONG-TERM SOLUTION!

29. In Conclusion It will be the best of times and the worst of times. Forestry is part of our past, our personality as a province and it is going to be part of our future The changes that need to be made require a robust, dedicated and animated public service that will lead the change.

30. In Conclusion Our two most important resources are: OUR FORESTS and THE DEDICATED PUBLIC SERVANTS WHO ARE THE STEWARDS OF THE RESOURCE

31. THANKS FOR YOUR ATTENTION