Natural Resources

Why B.C.’s lumber business is heading south

By Felicity Stone /

THE#BCBIZDAILY
Plus, Vancouver’s still waiting for grocery store wine and deflating bubble economics

Out of the woods
The outlook is sunny for Canada’s wood products industry according to a new report from the Conference Board of Canada—output increased six per cent in 2014 thanks to strong U.S. demand and the lower Canadian dollar—but there are clouds on the horizon for B.C., where softwood lumber production fell 0.7 per cent, the first decline in five years. Blame the pine beetle, which has reduced the supply, and a resurgent U.S. housing market, which is leading B.C. lumber companies to close up shop here and expand south of the border. Canfor and West Fraser Timber have shut down sawmills in Quesnel and Houston, yet as of 2014, West Fraser Timber owned more American than Canadian sawmills and, along with Canfor and Interfor, 31 U.S. sawmills altogether. With the current Canada–U.S. softwood lumber agreement expiring in October, investing in U.S. mills also lets lumber producers hedge against what future softwood lumber agreements might bring.

So Surrey, we’re Vancouver
Vancouver has moved quickly to regulate marijuana dispensaries. Wine sales in grocery stores? Not a priority. Since April when the province’s new liquor laws came into effect, Save-On-Foods in South Surrey has been the only grocery store to sell wine. Urban Fare on Alberni tried to do the same only to discover that Vancouver has its own rules about liquor sales, so its wine racks remain empty. (via CBC)

Not a trained economist
Philip Soos, an economist whose opinions on the effect of foreign money on the Australian housing market have been widely quoted by media, is actually an IT grad with no discernable economic credentials, or so says South China Morning Post‘s Ian Young on his blog, The Hongcouver. Soos has written an e-book, Bubble Economics, published by the World Economics Association, which Young also finds questionable. Currently a student at Deakin University, Soos sells what Young calls “doomy research” through a business called LF Economics. One of the reporters who quoted Soos, well-known local journalist Frances Bula, has shot back on her blog, defending Soos and criticizing Young’s takedown, which you can read here.