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Institutional Mechanisms for the Spatial and Inter-Temporal Transfer of Fiscal Capacity in Rural British Columbia Hoberg, George
2008
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Abstract: While natural resources have provided a historical source of great wealth for British Columbia, resource dependence has created some significant challenges. The massive expansion of resource development strategies over the course of the past four decades has led to significant depletion of those same resources upon which the province depends so heavily (Cashore, 2005; Hutton, 2002). In addition, economic dependence on forest resources in rural communities has been linked to increased unemployment and poverty (Leake et al 2006) At the same time, the threat of global warming has escalated. While specific impacts remain largely uncertain, it is generally understood that forest dependent communities will be strongly affected by the impending changes. As the Ministry of Forests and Range (2006: iii) has noted, &many communities are heavily reliant on the forest sector market economy. Increased fire and pests, along with inability of trees to adapt to the new climate regime may result in a reduction of timber supply, which would have wide ranging effects on local industries and communities. Climate change impacts may also affect other forest based activities such as recreation or the use of non-timber forest products, further intensifying socio-economic impacts on these communities (2006). The impacts of climate change are already disturbingly visible in the interior of the province, where climactic shifts have magnified the effects of the mountain pine beetle. By 2005 the beetle had affected 7 million hectares of land, and is projected to kill over 80% of merchantable lodgepole pine throughout the province (McGarrity and Hoberg, 2005). The significant reduction in harvesting and wood processing that is anticipated following the end of beetle salvage harvesting promises to have profound implications for rural British Columbia and strongly indicates the need for diversification of the rural economic base. Regional diversity, uncertainty around future conditions and the need for long-term planning and funding suggests the need for institutional mechanisms that are able to transfer fiscal capacity on both a regional and inter-temporal basis. While similar observations have frequently been made in the literature, there has been surprisingly little analysis of the specific alternative instruments available to address these conditions. This research proposes to address this gap by asking: what are the most appropriate mechanisms by which to transfer fiscal capacity to rural British Columbia on a regional and inter-temporal basis? The most common responses to threats to community stability posed by major changes in the traditional resource base often involve funding disbursements by government to a region or community. Recent examples of this in British Columbia include the Mountain Pine Beetle Emergency Response: Canada-B.C. Implementation Strategy. Worth over $200 million dollars, this fund includes a $13 million dollar, three-year commitment to help impacted communities and First Nations diversify and stabilise their economies in the post-beetle era (Province of British Columbia, 2005). Unfortunately, large funds such as these often fall prey to two conditions: governmental inclination and/or short-lived disbursement periods. In occurrences where government funds are allocated it is generally due to the political inclinations of the majority party. Disbursements can be administered through processes such as annual allocations or multi-year budget commitments. Use of these methods, however, allows financial authority to rest with the government and leaves funds highly sensitive to the political inclinations of the dominant party in the legislature. Thus, majority party shifts leave previous financial commitments open to cancellation. As is the case with the mountain pine beetle emergency response monies, fiscal disbursement may also be restricted such that it only occurs over a short-term basis. While such timeframes may be a ...
 
Hoberg, George. 2008. Institutional Mechanisms for the Spatial and Inter-Temporal Transfer of Fiscal Capacity in Rural British Columbia. Forest Investment Account (FIA) - Forest Science Program. Forest Investment Account Report
 
Topic: FLNRORD Research Program
Keywords: Forest, Investment, Account, (FIA), British, Columbia
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