I hope everyone saw Derek DeCloet's article in last Saturday’s Globe & Mail Report on Business Weekend ("Pattison Goes Deeper into the Woods" p.B5). The article examines the apparently counterintuitive phenomenon of Jimmy Pattison and others significantly increasing their stake in the BC forest industry when the industry’s immediate outlook seems particularly bleak. The article is definitely not blue skies and sunshine--there’s still the requisite doom and gloom that must accompany any story on the BC forest industry these days. But the article does contain a nugget of Lennonist (that would be John, not Vladimir) optimism: it couldn’t get much worse.
The article provides a nice survey of where the investment community sees the industry’s future and, somewhat surprisingly, there is actually mixed opinion. I suppose there is some comfort in fact that at least a few big players seem to think that this is a good place to park their money long term (certainly, I don’t think anyone is expecting a quick return on investment). The most interesting aspect of the article for me, however, is how much change it suggests that investors still expect from the industry. After a period of sweeping regulatory changes and large merger after large merger, the expectation is for ever further regulatory changes and even larger mergers.
I’m not sure whether the public is prepared to accept this. I don’t think the public, in general, appreciates how small our forest companies in BC and Canada are compared to their international competitors. And if they do not appreciate this basic premise, then I’m not sure they would even begin to consider the need for a further reduction in regulations to promote even bigger forest companies. In any event, these policies will require skilled and determined political leadership, both in Ottawa given that competition is a matter of federal jurisdiction, and also on the ground where the voters reside. The question then becomes: are there any political leaders at the federal level who are willing to champion the case for larger forest companies? Or is it easier and more politically profitable, especially at a federal level, to fall back on bashing large companies?
If you missed the article, send me an email at jeff@bcforestrylaw.com, and I’ll forward a PDF to you.
The commentary in this blog is general in nature and does not constitute legal advice. Persons requiring further information or advice should contact Jeff Waatainen at 250.758.9485 or jeff@bcforestrylaw.com.
