Sunday, December 9, 2012

Wealth or Money?

Canadians are known for dishing up natural resources. The country has been slow to learn the difference between money and wealth. Hew some wood and sell it for money and that seems to have equaled wealth. Canadians have been ready to give the country away to anyone that promises to turn natural resources into cash.

Canadians were solidly behind the "trickle down effect" decades before some hapless economist invented the term. In the 1880s, the Federal Government paid a coal baron to build a railway from Victoria to Nanaimo on Vancouver Island and then we threw in 20% of Vancouver Island as a land grant to help him along. There was strong resistance at the time, but the promises of trickle down dollars won the day.

In 1909, there was a flicker of light, a sign that Canadians were starting to understand the difference between wealth and money. A Royal Commission on BC forests decided that they should be kept out of the hands of the timber barons that had devastated huge areas of forest in North America leaving behind a legacy of ghost towns. BC would retain its forest in public ownership and have them managed by professional foresters organised into a Forest Service. Well managed forests were seen as a source of sustainable wealth.

After World War II, economic development seemed to dictate that we needed the timber barons back in the form of forest companies to convert timber into dollars. The forest companies did a good job of converting timber into dollars. Large old growth Douglas fir trees with superb timber quality were converted into construction grade plywood. Most of the timber was allocated to commodity timber and wood pulp products, so a secondary value adding wood manufacturing sector never got a chance to develop more wealth out of the timber. A scheme of timber harvesting rights held by forest corporations is hardly a foundation for adequate forest stewardship. It worked for a half century long timber harvesting binge but it has been experiencing difficulty for some time.  This arrangement has failed and it is a testimony to a failure of imagination that a recent BC Legislative Committee was out seeking more timber to convert to cash. We need new forest stewardship arrangements that will enable the forest to  be a source of sustainable wealth.

Construction of a pipeline to carry bitumen from the Alberta tar sands to the coast of BC is much in the news with considerable resistance from BC residents. The tar sands is a major oil reserve of global and strategic significance. While the Province of Alberta owns the resource under the Canadian constitution, there also seems to be a need for the Canadian Government to have some say given that it is responsible for foreign policy. What about developing an advance petro-chemical and refining industry to generate more wealth?  Is this just going to be a binge for a couple of generations? Should we slow the rate of development down until we can recover more oil with less energy use and environmental impact. Should we keep some long term oil reserves for future pacification of our oil addicted elephant neighbor.. Any thought about the future are likely to be swept away by the force of "let's make a fast buck now".

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