UPDATE ON THE ECONOMY:
BRITISH COLUMBIA FOR SALE

MacMillan Bloedel off-highway logging truck.

As part of the turn-of-the century restructuring of BC's economy, many of the province's biggest corporations have recently been sold to foreign interests. Indeed, the loss of corporate head offices has turned out to be the most striking trend in the recent economic history of the province. BC's four largest companies in 1996 (MacMillan Bloedel, Westcoast Energy, BC Telecom and Fletcher Challenge Canada) have all been purchased by or merged with out-of-province interests during the past five years, and three of the four no longer exist.

The mergers and sales are partly the result of the low value of the Canadian dollar, which makes local assets a bargain for foreign buyers. Other factors are the trend toward mass consolidation going on in the global economy, and the economic downturn faced by local forest companies.

Probably the most significant of the ownership changes was the 1999 purchase of MacMillan Bloedel by American forestry giant Weyerhaeuser. MB was BC's largest company, employing more than 12,000 people and earning annual revenues of several billion dollars. Founded by forest industry pioneer H.R. MacMillan in 1919, "MacBlo" grew to become one of the few BC-based multinational corporate giants. Its sale was a shock to the public, and an indication of the profound changes that are transforming not just the forest sector but the entire provincial economy.

But the sale of MB was not a unique event. Since 1995, several of BC's largest companies have changed hands as control of the local economy has shifted out of the province. Other examples include:

• BC SUGAR. This was Vancouver's first major industry not based on logging or fishing when it was established by American-born Benjamin Tingley Rogers in 1890. During the 1990s it was the largest sugar producer in Canada and the third-largest in North America. In 1997 it was purchased by a consortium that included local and Toronto interests. The western Canadian part of the business was spun off as Rogers Sugar, a smaller company.
  
  
• WESTCOAST ENERGY. This is BC's largest corporation, with revenues in 2000 of $8.9 billion. It was founded by industry pioneer Frank McMahon in 1949 to build a pipeline from the Peace River region to the Lower Mainland. In 2001 the company was purchased by American energy giant Duke Energy Corp.
  
  
• FLETCHER CHALLENGE CANADA. This forestry giant traced its origins to two predecessor companies, BC Forest Products and Crown Zellerbach. By the late 1990s it had sold its timber interests to concentrate on papermaking at mills at Crofton, Mackenzie and Campbell River. In 2000, control of FCC was purchased by Norske Skog, a Norwegian pulp and paper producer, and the company was renamed Norske Skog Canada Ltd.
  
  
• (WIC) WESTERN INTERNATIONAL COMMUNICATIONS. Owned by Vancouver's Griffiths family, it began in 1956 with a single radio station (CKNW) and grew to become the largest private broadcaster in Canada with television and radio stations, pay TV networks and wireless communications systems. Following complicated legal proceedings, the company's assets were divided in 1999 between two other companies, Shaw Communications, based in Alberta, and CanWest Global Communications, based in Winnipeg.
  
  
• FUTURE SHOP. It was one of the greatest retail success stories in Canada during the 1990s. Founded in Vancouver in 1982 by Iranian immigrant Hassan Khosrowshahi, it became the country's leading chain of computer and consumer electronics stores. By 2000 it had 88 stores and annual revenues approaching $2 billion, but rather than face a head-to-head battle with US electronics giant Best Buy Co., Khosrowshahi sold Future Shop to its rival in 2001.
  
  
• WESTERN STAR TRUCKS. Located in Kelowna, it is the only major truck manufacturer in BC and a world leader in its field, building high-quality specialized trucks for industry and the military. By the late 1990s it employed 1,400 people. In 2000 the company was acquired by Oregon-based Freightliner LLC, a subsidiary of German auto maker DaimlerChrysler. The new owner has just announced that the Western Star plant in Kelowna will close in 2002.
  
  
• PACIFICA PAPERS. It was created in 1998 when MacMillan Bloedel spun off its paper manufacturing operations at Powell River and Port Alberni into a separate company. In 2001 Pacifica was purchased by Norske Skog Canada Ltd, a subsidiary of the Norwegian pulp and paper company.

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