There is no doubt that current economics in the Canadian forestry
sector are grim. However, when you look out at the horizon, at where
global economics are quickly going, it's clear that the industry's
longer-term prospects are excellent. And strangely, the future of
Canada's most distressed sector provides the most compelling story of
how privileged Canada will be in tomorrow's world economy.
How
can there be any cause for optimism during what is arguably the worst
times in our industry's history? Because natural resources that are
produced sustainably will be the most prized products in tomorrow's
global economy.
The math of where the world is heading is simple:
Economists are predicting that global GDP will double in the next 20
years and per-capita incomes in developing nations will triple. This
march of the world's poor in developing countries out of a subsistence
existence and into the modern economy has long been part of humanity's
dream, but it will put pressure on the planet. Just look at where we
are today, with prices for energy and natural commodities rising and
the evidence of the harm we are doing to the planet all around us. Now
project out from today as global GDP doubles in just two decades.
With
increasing global wealth, global demand for paper and wood is projected
to grow significantly over the years ahead. However, global levels of
production of forest products will fall far short of increasing demand.
In the past, the answer to growing demand was the establishment of
low-cost tree plantations in the tropics. But the emerging social and
economic reality will all but stop any expansion of land use for
tropical plantation forestry.
There is already a shortage of land
to grow the food that a more prosperous world is demanding. A first
priority of the world's poor as they move from subsistence to the
modern economy is animal protein, especially for their children. But
protein production requires 10 times the land base that their
traditional foods needed. Add to this the pressures on the agricultural
land base that are resulting from massive investments in growing
biofuels from sugar cane, corn and palm oil, and it is clear there will
be a severe global land shortage. The story for water is, if anything,
more sobering.
The world will turn to Canada and other boreal
nations that have a vast forest base, energy and water for the supply
of forest products.
But this is only half the story. Il legal
logging and widespread deforestation are global scourges that have not
been stopped or even significantly slowed. Their impact on global
climate change and environmental degradation is enormous.
In
Canada, we have chosen a different path. We regenerate our forests
promptly, regulate the industry and invite outside scrutiny of our
forest practices. Government regulation and industry initiative ensure
that we don't rest on our laurels and continually set the bar higher.
