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Wood product woes
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December 18, 2009
The Conference Board of Canada predicts an increase in housing starts next year will drive Canada’s wood-products industry into profitability. Peter Hall, an assistant professor in urban studies, thinks the prediction is overly optimistic.
Assuming housing starts recover and current climate-change talks produce an agreement that pays wood producers to reduce deforestation, a stronger wood products industry may result in more investment--but not jobs. “A key unstated assumption in the board’s prediction of profitability for the wood products sector is that it is ready to invest in new equipment and may benefit from B.C.’s new harmonized sales tax,” notes Hall. “If that is the case, predictions of employment growth need to be tempered by the likely capital-intensification that would accompany new investment.”
Peter Hall, 778.782.6691, pvhall@sfu.ca
Assuming housing starts recover and current climate-change talks produce an agreement that pays wood producers to reduce deforestation, a stronger wood products industry may result in more investment--but not jobs. “A key unstated assumption in the board’s prediction of profitability for the wood products sector is that it is ready to invest in new equipment and may benefit from B.C.’s new harmonized sales tax,” notes Hall. “If that is the case, predictions of employment growth need to be tempered by the likely capital-intensification that would accompany new investment.”
Peter Hall, 778.782.6691, pvhall@sfu.ca