TimberWest Counter Report
Posted Feb. 22, 2006


As reported by Canadian Press (Published: Friday, February 10, 2006), TimberWest Forest Corporation has declared year-end figures for 2005. CEO Paul McElligott bravely assured investors that cash distributions have been sustained for another year.

If you live in the Cowichan Valley, you will not be surprised to read that the volume of logs being exported is up from 2004 to an all-time high. Many ex-millworkers, their families, and their forest-dependent neighbours are left to watch and chafe as their timber resources exit the valley day after day, at a record pace.

On reading TimberWest’s annual report more carefully, two stunning truths emerge. The first is that despite the increased timber volumes being shipped out, TimberWest is actually losing money and share value is in year-over-year decline as company debt rises. (McElligott blames unfavourable foreign exchange rates and downward market pressures.) Not exactly sustainable management. So much for corporate stewardship. One naturally questions whether their attention to forest stewardship is any more credible or sustainable.

The second stark feature of note is that TimberWest has announced a more aggressive strategy to expand private forestland sales in an effort to supplement its shortfall from log sales. This means that not only is short-term value being subtracted from communities with the departure of every log-laden truck, but also, more damaging in the long run, value is being subtracted from local communities as more of the forest land base is liquidated and permanently removed from sustainable forestry.

Unfortunate indeed are TimberWest investors who have put their faith in the excellence of management. More unfortunate yet are the hapless communities in TimberWest’s shadow who bear the burden of declining manufacturing capacity, plummeting employment levels, deteriorating watershed quality, dwindling industrial safety, and the legacy of an ever-shrinking forestry footprint.

Roger Wiles (YTS Secretary)

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