Investment strategy needed for BC's resource sector

New CCPA report proposes an inventory of investment policy alternatives to reinvigorate the resource sector and stabilize resource communities
July 20, 2001

(Vancouver) The BC Office of the Canadian Centre for Policy Alternatives released a new report today that sets out a bold collection of policy ideas for promoting new investment in BC's resource sector. Re-capturing the Wealth: Investment Solutions for Jobs and Environmental Sustainability in BC's Resource Sector proposes policies to increase innovation and efficiency, move up the value chain, and improve environmental performance in forestry, fisheries, and mining. The policy alternatives are intended to reverse the lack of investment that has plagued the resource sector over the last decade.

The new BC government has promised to cut taxes and reduce resource rents. Dale Marshall, resource policy analyst with the Centre and author of the report, suggests that the Liberals re-think their strategy. "Concessions to resource companies should not be a blank cheque," warns Marshall. "If the premise behind the cuts is to get investment in BC, then we should tie those cuts to ironclad commitments from resource companies that they will make needed investments."

The proposals in the report are both policy "sticks" and "carrots" that will help the resource sectors recover from the crisis of the 1990s. Examples of the proposals include: a tax shift mechanism to finance closed-loop technology in pulp mills; requiring mining companies to post community transition bonds; and a public Resource Investment Bank that would finance needed value-added investments.

Although the policy ideas in the report are not ones that have been advocated by resource corporations, most would benefit the industry. "By adopting the proposed initiatives, companies can increase their productivity and efficiency, and capture expanding markets for environmentally-friendly products," states Marshall.

The policies would also mean more stability and security for resource-dependent communities in the province. "Value-added production creates jobs and buffers resource towns from boom-and-bust commodity price swings. Investment in environmental technologies will increase quality of life in rural communities," says Marshall.

Re-Capturing the Wealth also points out that there are alternatives to the present industrial and investment structure. States Marshall, "Communities themselves, co-operatives, workers, the small business sector, First Nations bands, and public finances can all be tapped into to generate new and needed capital investment."