Appendix 3 containing the Entrepeneurial Opportunity Analysis is not included online at this time.



A. Background

1. What is the purpose?

A number of changes have already occurred in the valley economy. Mining has declined and the cedar mill has closed while the population has increased, and outdoor-based tourism has grown. These changes, as well as the implications of the land-use planning process, affect the valley economy today, and in the future.

The natural resources of the valley - the forests, lakes, rivers and mountains - create much of the foundation for our economy. We need to take a close look at the recent and forecast changes, and identify natural resource-based opportunities to build a stronger, more self-sufficient valley economy. This project is a first step in that process.

For this project, the Slocan valley was defined as the area included in Area H East of the Regional District of the Central Kootenays (see map next page). This includes the communities and rural areas from Crescent Valley and Crestova north to Summit Lake.

The project has been directed by a Steering Committee of local citizens. These individuals selected the consulting team, defined the public consultation process and provided support and advice as needed. They will also approve the final report.

A team of regional consultants reviewed the many reports about the economy of the Slocan valley to prepare a Preliminary Situation Analysis that was reviewed by the public in June 1998. Fifty valley citizens were then interviewed personally, or in five industry groups to refine the preliminary information, define a vision for the valley economy, identify the strengths and weaknesses of the current economy and brainstorm opportunities and obstacles. Three community workshops attended by 60 people were also held to broaden public input. Individuals provided 16 written submissions.

The public input was used to refine the situation analysis and develop the sections on Looking to the Future and Economic Opportunities and Obstacles in this draft report. The consultants then undertook an analysis of the information and input to identify the most promising options. Further research was undertaken where additional information was necessary. The most promising options are identified, and recommended approaches are outlined in the Action Plan section of this draft report.

Input from this public review will be used to refine and finalize this draft report. The final report will be available to the public in January.

This section provides an overview of the natural resources and economy of the valley in a “snap-shot of time”. It is designed to provide a brief description of the valley natural resources and economy from which economic development opportunities can be identified.

A review of the many reports on the Slocan valley economy, and interviews with groups and individuals from the valley provided the basis for this analysis. A “Preliminary Draft Situational Analysis” was distributed in the valley in June 1998 during the initial community consultation process for this project. Comments received on the preliminary draft were incorporated into this final draft. Appendix 1 contains a listing of the reports used to prepare this section of the report.

Early human settlements in the Slocan valley by first nations are confirmed by the existence of archeological sites.

The mining boom in the Sandon area from 1890 to 1893 led to establishment of the towns of Sandon, New Denver and Slocan. Associated economic activity led to the development of road, ferry and rail links to the south. The southern portions of the valley (Crescent Valley, Koch Siding, Winlaw, Perry’s Siding) were settled by pioneer homesteaders, primarily of Doukhabour decent, in the early 1900’s.

The resident population of the Valley during the early 1940’s was added to by the relocation of an estimated 7,500 people of Japanese descent as civilian prisoners of war. These internment camps were located at Lemon Creek, Bay

The next major wave of in-migration occurred in the 1970’s when young migrants or “back-to-the-landers” discovered the valley. More recently, in the 1980’s and 90’s, an influx of ‘urban refugees’ and semi-retired professionals, many of whom are well educated and financially independent, have augmented the population, as well as “counter culture” in-migrants, who may have fewer resources but are creative in adapting to living with less.

Historically, the Slocan valley has been settled by those attracted by its natural resources, whether minerals, productive farmland, timber, or the natural beauty.

The Slocan Valley falls within the traditional territory of at least four first nations groups:

The Siniixt Nation, or the Lakes People, traditionally occupied areas of the West Kootenays. Individuals of the Siniixt Nation have come forward asserting descendency and claiming government recognition as an existing nation.

The Okanagan Nation traditional territory covers an area of approximately 111,000 square kilometers, primarily situated in the central Okanagan Valley. Currently the Westbank First Nation is the only member of the Okanagan nations that is engaged in the treaty process.

The Ktunaxa Nation traditional territory is primarily in the East Kootenay area of British Columbia and adjacent lands in the United States. The Ktunaxa-Kinbasket people have been involved in the BC Treaty Making Process since 1992.

The Shuswap Nation traditional territory covers 105,000 square kilometers, primarily in south central BC. Several of the Shuswap Bands are actively involved in the BC Treaty Making Process.

The total population for the Slocan Valley in 1996 was 5,615 based on Census Canada data (Appendix 2 Tables 1 and 2). The valley is more densely populated in the southern third, from the Village of Slocan south to Crescent Valley, where 71% of the population resides (3,968 people).

Twenty-one per cent of the population (1,155 people) lives in the three municipalities -Slocan, New Denver and Silverton - with the remainder in the unincorporated areas that fall under the administration of the RDCK in Area H.

Valley population declined from 1981 to 1986, then rebounded, with a 12% increase from 1991 to 1996, or 2.5% per year. For comparison, most rural areas have experienced population declines in recent years.

The total valley workforce (includes individuals 15 and older excepting seniors, students or individuals in an institution) has grown substantially in recent years - by 29% since 1991, to 2,760 individuals in 1996, based on Canada Census data. This is more than double the increase in population, an interesting reality. This workforce is the number of individuals living in the valley who are available for work. The proportion of the labour force that is active in the work force (the participation rate), is 65% (see Appendix 2, Table 4), which compares well with the average for the regional district of 63%, and the regional average of 58%. However, unemployment is relatively high at 16% compared to the regional district average of 11.7% and the regional average of 9.1%.

Although the participation rate for youth in the local economy was similar to the average, unemployment is high (24.1%) amongst youth, and much higher than the Central Kootenay Regional District level (18.5%). This must be a source of concern in the valley.

As with much of the western world, the workforce in the valley is aging, with more retired and semi-retired people who are financially independent residing in the valley.

As with the population, the labour force is not equally distributed within the valley - 65% reside in the southern portions (south of Slocan City). As well, the unemployment and labour force participation rates differ from locality to locality, though there is no difference between the north and the south components of the valley (Appendix 2, Table 4). Crescent Valley and New Denver have the lowest unemployment rates at approximately 8% while Slocan City has the highest rate at 32%. Slocan City also has the lowest participation rate (48%) while Silverton and adjacent areas, and Crescent Valley have the highest.

Increasingly the valley workforce has become more and more flexible, with entrepreneurship, self-employment, part-time, seasonal, casual, multiple jobs and employment out of the area via travel or electronics replacing full-time employment. For some this has been a necessity, for others the change has been by choice. This variety of working schedules may explain some of the relatively high unemployment. Since the Census information was gathered in early May of 1996 many of the seasonal workers who live in the area were likely not back to work and would have been classified as unemployed.

The Slocan valley is rich in natural resources. The rugged Selkirk and Purcell Mountains provide a spectacular backdrop for Slocan Lake and Slocan River, and its many tributary steams. The high mountain areas include far-reaching alpine meadows and rocky peaks. The combination of rocky peaks, meadows, and forested mountainsides falling into the lake and river creates stunning natural scenery.

The rock formations of the valley are highly mineralized and have long been prospected for commercial mineral development.

Steep mountain valleys occupy most of the area, creating diverse conditions for forests and forest dwelling species. Coniferous forests with a variety of tree species are found throughout the area, with Engelmann spruce and subalpine fir dominating at high elevations, and western red cedar, western hemlock, Douglas fir, and western white pine present at lower elevations. Deciduous tree species such as paper birch, trembling aspen, and cottonwood occupy extremely wet sites, stream-side areas, or disturbed sites on lower and mid elevations. A wide range of shrubs and herbs and grasses grow in these diverse forests.

These conditions create a diversity of habitats suitable for a wide range of animal species. Large mammals include white tail and mule deer, elk, moose, caribou, grizzly and black bears, mountain goats, big horn sheep, badgers and wolverine. Many small mammals also inhabit the forests and waterways. A wide range of large birds and raptors including blue herons, woodpeckers, eagles, hawks and owls as well as a host of song birds and waterfowl inhabit the valley. Marshes, ponds and slow water along the Slocan River provide food and shelter to migrating waterfowl in the spring and fall. The Slocan valley is home to a number of provincially blue and red-listed endangered wildlife species such as grizzly bears, mountain goat, bald Eagle, badger, wolverine, Cooper’s and sharp shinned hawk, blue heron, short eared owl, northern pygmy owl and pileated woodpecker.

Silverton, Carpenter, and especially Wilson and Bonanza Creek produce most of the fish native to Slocan Lake and provide critical spawning habitat for these species. For the last 5 years sport fishing has been prohibited on the Slocan River due to reduced populations of rainbow and bull trout (in the Lemon Creek area), with limited openings for other species in the winter.

The numerous creeks and springs in the area are used for domestic and community water supplies. Because of the steep topographic nature of most of the watersheds, combined with occurrence of sensitive soils which may be prone to mass wasting or erosion, harvesting in or adjacent to domestic or community watersheds has been a very contentious issue for over 25 years. At least nine community-based resource planning processes have been initiated, and some completed, during that time, but resource management in the area remains largely unresolved.

The existing economic sectors, which rely on the natural resources of the valley, are described in this section. A brief history and the current status of each sector is provided.

Agriculture has historically played a significant role in the valley economy. Extensive fruit orchards, root crop production and dairy farms existed in the past. After boundary adjustments removed one-third of the area in 1994, there are now 4,800 hectares of land within the Agriculture Land Reserve in the valley. Approximately 18% of these lands are now being farmed. Flooding of the valley bottoms throughout the Kootenay region has left the Slocan Valley with an important segment of the limited farmlands that remain in the region.

Commercial agriculture has grown rapidly in recent years. Local commercial products include vegetables, fruits and berries, primarily for local distribution. Organic farming has especially blossomed. Organic growers have initiated a local growers’ regulatory body - the Kootenay Organic Growers - which has 40 members and has certified 18 farms in the last two years. This specialty production has a strong local market with Nelson being the number one consumer of organic produce per capita in North America. Local producers currently supply only 5% of this market.

Most commercial farms are family operations focused on seasonal production, with limited labour requirements during the summer months. Some enterprises have added greenhouses to allow production throughout the year.

According to the Canada Census data, 75 people are employed in the agriculture sector. Incomes from this sector are mid-range.

In addition, many families have large gardens, which provide a substantial portion of their annual food supply, effectively increasing their income.

The natural beauty of the valley and the relatively reasonable cost of living has attracted many artists to make their homes in the valley. While art might not traditionally be considered a component of the ‘natural resource economy’ the focus of the arts sector in the valley on the natural environment brings them into this economy. The rural nature of the valley encourages the “hermit” lifestyle of many artists and allows for a generally low cost of living.

The valley arts community includes performing, visual and written arts. Current activities include writers (poetry, fiction, biography, freelancers), publishers, twig furniture, bonsai, weavers, fabric dyers, musicians (performers, composers), computer designers, commercial artists, book cover designers, illustrators, dancers, choreographers, actors, set designers etc, architects, sewers, jewelry makers, potters, weavers, painters, sculptors and photographers.

Most artists in the valley are one-person operations doing a mix of one-of-a-kind, high-end pieces and production work with cheaper per unit costs and higher volumes. Production artists may hire people prior to big shows. Most of the art produced in the valley is sold through wholesalers, mail order businesses and craft sales/shows. Consequently, most sales are in markets outside the valley (Calgary, the lower Mainland, and Toronto). Local sales are limited, but there is a desire and need to encourage more local sales.

It is estimated that 8 – 10% of total valley population could be described as an artist.

• Silvana Mine in Sandon
• Willa Mine outside Silverton
• Black Crystal Graphite Mine in the Koch Creek area
• Canadian Sapphire gemstone and crystal mining in the Little Slocan/Vallican area

Prospecting and mine claim maintenance continues to be active and generates minor expenditures, totaling about $ 0.5 million in 1997. While this is the recorded expenditure, which is therefore routinely doubled by industry experts to reflect accurate spending levels, it constitutes a historical near record low for the Slocan.

Total employment generated by the mining sector is estimated at 15 jobs. The average income associated with mining jobs is relatively high. Prospecting and mine development income is usually lower and highly variable. In addition, approximately 6-10 individuals are currently supplementing their income with gemstone and crystal mining which is a recent and promising development.

There are large deposits of sand and gravel near the valley bottom and lower hillsides along the Slocan River where two active gravel pits are currently operated. These resources show great immediate potential for development should further construction or expanded maintenance of road infrastructure occur in the area.

• Slocan Forest Products TFL #3, which lies in its entirety in the southwestern corner of the Slocan Valley area
• Slocan Forest Products Forest License A20192, which has chart areas on the east slopes of the Slocan Valley from Trozzo creek to the northern borders of the valley and on the western side of the valley from the northern border of Valhalla park to Bonanza creek.
• Kalesnikoff Lumber Co. Ltd. Forest License A20194 which has operating areas in the southern portion of the valley from the southern border of TFL #3 to Krestova.
• The Ministry of Forests Small Business Forest Enterprise Program which has chart areas on Perry’s Ridge, Winlaw/Pedro/Trozzo creek and Bonanza Creek.

The Ministry of Forests administers forest management and timber harvesting on Crown land in the valley from the Arrow Forest District office in Castlegar.

Timber supply

Specific information about the timbered landbase and timber harvest for the Slocan valley is not readily available because most of this area is managed as a component of a larger area called the Arrow Timber Supply Area. Consequently neither the Ministry of Forests nor the forest companies operating in the valley determine and administer an annual allowable cut or harvesting level for the valley by itself. Except for Tree Farm License #3, all the existing forest tenures in the Slocan Valley extend beyond the valley boundaries. To approximate the timber landbase and potential timber harvest from the Slocan valley an analysis was undertaken and compared to existing data (Appendix 2).

This analysis shows that Slocan Forest Products with their two licenses (Tree Farm License #3 and Forest License A20194), account for 83% of the land base that is currently classified as suitable for timber harvesting in the Slocan valley. If a proportionate contribution to timber supply from each hectare of land is assumed, Slocan Forest Products has rights to 83% of the timber harvested from Crown forestland in the valley.

This analysis estimated the range of potential harvesting levels from the valley at between 158,000 - 239,500 cubic metres of timber per year. This estimate is based on a proportionate contribution per hectare of timber harvesting landbase and is an approximation only. The forest licenses and Small Business Program are volume based and have flexibility in deriving volumes from operating areas in other parts of the Arrow district. Thus these harvesting levels are by no means binding. Site productivity, age class distributions, and resource management guidelines, among other things, will dictate a different harvesting scenario for each licensee.

To further crosscheck the potential timber harvest levels in the Slocan valley, the analysis results were compared with those of the Silva Plan (Ecosystem Based Landscape Plan for the Slocan River Watershed). The Silva Plan found that the estimated annual allowable cut was 226,670 cubic metres per year, compared to 239,522 in this analysis. Using a net down analysis, the Silva Plan identified a net cut of 170,002 cubic metres per year, compared to 158,084 in this analysis.

The amount of timber that is authorized for harvesting from Crown land is regularly reviewed by the Ministry of Forests. During the last review the allowable annual cut for the Arrow Timber Supply Area, which includes the Slocan valley, was maintained, with reductions scheduled over a period of time to a long-term level. The allowable annual cut for Tree Farm License #3 was reduced in 1995 from 113,000 to 65,000 cubic metres per year, due mainly to difficulties in identifying available timber volumes for the short term. The allowable annual cut for the Tree Farm License was reviewed in 1998 and has been increased to 80,000 cubic metres per year in view of new estimates of when local forests will be suitable for harvesting, and a 20 year plan which identified adequate timber harvesting areas.

The next review of timber supply for the Arrow Timber Supply Area is under way and scheduled for completion by Dec. 31, 2001. The new parks, the Forest Practices Code and the aspects of the Kootenay Boundary Land Use Plan which are implemented will be incorporated into this review. It is widely acknowledged that these initiatives will likely have a downward effect on the allowable annual cut. The timber supply impact analysis conducted for the Kootenay Boundary Land Use Plan Draft Implementation Strategy predicted a 23% reduction for the Arrow Timber Supply Area, with no reduction anticipated for Tree Farm License #3.

However, in the past 5 years, neither Slocan Forest Products nor the Ministry of Forests have harvested all the timber they are authorized to cut. On average, Slocan Forest Products has not harvested 31% of its allowable annual cut while the Ministry of Forests has not harvested in the valley in the last two years. In total 722,000 cubic metres less than what is authorized has been harvested. Both operations have extensive harvesting areas in the Slocan valley that, in the past, have been deferred from harvesting pending formulation of acceptable practices in the watershed and visual quality zones which occupy the major portion of the timber harvesting landbase in the valley. The concentration of harvesting in areas outside the Slocan Valley in the past, while land use planning has continued for the valley, means that, if current harvesting levels are to continue (not the authorized cut), much of the short- to mid-term harvesting for both the Ministry of Forests Small Business Forest Enterprise Program and Slocan Forest Products forest license must come from the previously deferred areas within the valley.

Forest Sector

Technical and professional consulting, planning, administration, as well as harvesting, trucking and silviculture are included in this sector. Since 1991 employment in this sector has increased 65% to approximately 300 people in 1996.

• Planning and development

There has been a rapid growth in employment opportunities for technologists and professionals in the wake of sharply increased planning requirements associated with the implementation of the Forest Practices Code, Forest Renewal BC, and other initiatives over the last five years. Specialists have been needed in forestry, biology, geology, engineering, hydrology, ecology, information systems, landscape design, and mapping, to name a few. These opportunities have occurred locally in the wake of heavy investment by Slocan Forest Products in resource inventories and planning processes, as well as similar investments by government and industry outside the valley. This employment has declined since the census to more stable levels.

Only a few small companies offer these types of services locally, thus consulting companies located outside the valley undertake the predominate share of this work. Some of these firms have field offices within the study area as well as they may employ individuals who live in the valley.

• Logging, road building and trucking

Logging and road building employment has been stable in the last few years because of the increased proportion of cable logging, smaller blocks, and lower volume timber which creates more jobs per cubic metre logged. Because of the steep terrain in the valley, the trend is to more expensive harvesting systems, which in most cases require more employees than conventional harvesting. Approximately 50% of those involved in logging and road building for Slocan Forest Products live outside the valley.

People living in the valley undertake the majority of the forestry-related trucking. This industry has been stable in the last few years.

• Silviculture

Silviculture work, including planting, brushing and spacing, and other rehabilitation work is highly seasonal, requiring a large number of people for very brief time periods during the year. There is a large workforce living in the valley which gains their primary income from these activities, however, most of their work is outside the valley. This activity injects outside money into the local economy. Most of the work is physically demanding, and paid at piecework rates. Annual incomes in this sector are usually lower compared to logging jobs.

Slocan Forest Products has had relatively extensive watershed restoration and backlog reforestation programs in the last few years, however investment in these programs is expected to decline as the limited amount of work available is completed. Work in enhanced silvicuture (juvenile spacing, pruning, fertilization, pre-commercial thinning) in the valley has been limited by the funding available, primarily from Forest Renewal BC, even though opportunities for this type work do exist. Over the past five years the following employment is estimated to have been generated annually by Slocan Forest Products enhanced silviculture projects:

• surveys – 8 people for 4-6 months
• site preparation (burning and mechanical treatments) – 15 people for a number of weeks
• planting – 40 people for 3.5 months
• brushing – 50 people for 2 months

Much, but not all, of this work is completed by valley residents.

The current and projected reduction in funding for these activities is a provincial issue. As much of the silviculture workforce in the valley rely on work outside the valley, the impact of this situation is expected to be felt acutely this year by this workforce.

Wood Processing Sector

The wood processing sector accounts for approximately 290 jobs in the Slocan valley, and 10 percent of valley income.

• Primary processing

Slocan Forest Products is the largest primary processor with logging operations in the valley and outside, and operates a sawmill on the shores of Slocan Lake in Slocan City. Currently approximately 190 people are employed at the sawmill, and approximately 245 are employed in the forestry sector, making Slocan Forest Products the single largest employer in the valley. The annual payroll of the mill is about $14 million, including benefits. This results in high average per capita incomes. Employment at the mill has generally decreased over the last 20 years due to mechanization, but has increased by 35% since 1991.

There is the perception amongst some valley residents that many of the mill workers reside outside the valley, representing a leakage of valley income. However, it was found that approximately 90% of the IWA workforce live in the valley. Approximately half of the management staff also resides in the valley.

In 1997, the sawmill used 426,867 cubic metres of logs (about 14,000 truckloads) to produce 97 million board feet of mostly construction lumber for the US housing market. Decking, timbers, boards and special sizes are also produced. The 1997 wood consumption was similar to the seven-year average of 410,450 cubic metres of logs. Approximately 65% of the wood supply for the mill comes from licenses to harvest timber from Crown lands, with approximately 32% of this volume from within the geographic boundaries of the valley (Forest Licence A20192: approximately 71,145 cubic metres; Tree Farm Licence #3: approx. 59,600 cubic metres).

• Secondary wood processing

There are four secondary wood processing, or remanufacturing, operations in the valley which produce moulding, paneling, flooring, decking, siding or finger jointed studs. The largest of these is Goose Creek Lumber, located in Crescent Valley with 30 employees. The other operations - Perry Ridge Panel, Crescent Valley Cedar, Bonanza Creek Excavating - have one to three employees. Average incomes in this sector are lower than the primary sector.

• Designed wood products

About 65 small shops with one to three employees are located in the valley. These shops produce various designed wood products, ranging from cabinets and furniture to carved art and musical instruments. Many of these shops operate on a seasonal basis or on a custom order basis, so employment levels are difficult to estimate. Average incomes for indivduals in this sector are often lower than the primary or secondary sector.

A number of workers in the wood processing sector live in the valley and work at mills just outside the area, such as Kalesnikoff Lumber in Thrums, Selkirk Cedar and Lumber in Brilliant, and Box Lake Lumber, BJ Carney Ltd., PIRCO Poles and Columbia Shake and Shingle in Nakusp.

Currently primary and secondary wood processing operators across the province are experiencing financial difficulties due primarily to depressed international market conditions, export restriction to the USA and high delivered log costs. Designed wood manufacturers are not affected to the same degree.

The spectacular landscape and natural beauty of the Slocan valley lends itself to a number of outdoor based recreation activities. The rugged Selkirk mountains, Slocan Lake, the Slocan River and its many tributary streams provide a physical resource that is an ideal setting for recreation activities such as hiking, mountaineering, ski touring, cross country skiing, kayaking, canoeing, windsurfing, sailing, mountain biking, horse back riding, rock climbing, camping and fishing.

The existence of a large water body that is not dammed for hydroelectric purposes, and therefore has relatively small, natural lake fluctuation levels, provides the Slocan valley with a regionally unique recreation resource. The three provincial Class “A” parks with a total area of approximately 80,000 hectares are an additional tourism resource. These areas provide a protected landbase from which wilderness-based recreation activities can grow. These parks include:

• the Valhalla Park on the Weststern Shore of Slocan Lake,
• Kokanee Provincial Park which encompasses the Eastern mountains between Enterprise Creek and Lemon Creek
• the newly formed Goat Range Park in the north east corner of the Slocan Valley.

In addition, the Ministry of Forests manages a number of remote campsites and hiking trails on Crown land in the valley. Of particular note is the Idaho Peak Lookout site near the community of New Denver, which is one of the busiest Ministry of Forests recreation facilities in the region. Forty-four potential recreation projects were recently identified in the valley by the Tourism Action Society for the Kootenays, who undertook a survey of opportunities for development, rehabilitation, and promotion of recreation infrastructures such as sites and trails on Crown land in the area.

Commercial backcountry recreation activities in the Slocan Valley include ski touring, hiking, mountain biking and horseback riding. However, most of the existing operators are not licensed commercial backcountry tenure holders. Currently there are two tenured licensees operating in the Slocan valley. Both offer winter backcountry ski touring with some summer hiking opportunities. One operation is on the southern border of Valhalla Park (Valhalla Lodge) and the other is on the northern border (Valhalla Mountain Touring). There are a number of tenure proposals for new operations in the Slocan Valley area under the Commercial Backcountry Recreation Program indicating increased potential for this type of economic activity in the valley.

Front country tourism, which includes cycling and motorized touring along the road systems, has been gaining popularity throughout Canada and the United States. The drive along Highway #6 has become very popular in the summer months because of the scenery, historical sites (Japanese internment camps, old mine sites) and picturesque villages. This increase in tourism has helped to fuel economic activity in the accommodation, food and beverage industries.

Anecdotal comments indicate there has been an increase in motorized recreation, both by locals and tourists. These activities include quad and ATV use, four-wheeling, motor bikes, snowmobiling, and cat skiing.

Tourism is a growth industry in the area. The fastest growing sectors are wilderness-based such as snow-cat skiing, ski touring, road and mountain biking, canoeing, kayaking, hiking, climbing, backpacking, horseback, and llama pack trips. Aside from the direct benefits to tour operators, businesses such as accommodations (lodges, bed and breakfasts, hotels, motels, and alpine huts), restaurants, retailers, arts industries, transportation, and others profit from increased tourism traffic in the area. Depending on the type of activity and the travelers’ origin, average daily tourist expenditures vary from $4.40 for locals to over $ 380.00 per person for guided adventure travel.

Tourism employment has more than doubled in the valley since 1981, to 290 people in 1996 based on Canada Census data - or from 4% to 10% of the valley workforce. Employment in tourism is now approximately equal to forestry or wood processing separately.

Although employment is increasing quickly, the economic contribution to the local economy is limited by the relative low income levels of the industry. Incomes range from $12,500 in the hospitality component of the industry to $25,000 in the guided adventure segment. Lower incomes are mostly due to the seasonal nature of local tourism businesses. As a consequence, while the industry accounts for 10% of current employment, only 3% of total valley income - or approximately $3 million per year - flows from this industry.

Wildcrafting is the harvesting and processing of non-timber forest products including botanical products. Potential exists for commercial harvesting of native vegetation for medicinals, pharmaceuticals, natural health herbs, gourmet foods, decorative woods, arts and crafts and even oil extracts used in the manufacture of soaps, perfumes, insecticides, and industrial products. Harvesters, researchers and provincial agencies in BC have identified many species growing in BC’s forests that have commercial value including:

• 44 native plant species for landscaping/gardening,
• 26 species for medicinal and pharmaceutical uses,
• 33 species of edible wild mushrooms, and
• 18 plant species used as food substitutes by individuals with acute allergies.

Other species are used for floral greenery, commercial craft products (i.e. mosses, lichen, bark, leaves, conks, roots, twigs and wood) and consumption (i.e. berries and fruits. The number of plant species utilized for a variety of commercial purposes is increasing rapidly.

Much of the economic activity in this sector currently centers on the pine mushroom harvest in the Arrow Lakes area of the West Kootenay. This area produced over 5% of the provincial harvest of pine mushrooms. Pine mushrooms are primarily exported to Japan, US, Europe. The regional area also accounts for almost 20% of the provincial harvest of western yew bark and a large production of cedar foliage harvested for cedar oils. The degree to which valley residents participate in the harvest of these products is unclear.

Commercial potential for craft products has increased significantly in the past few years by approximately 10-30% annually. This year, an East Kootenay company will set up buying stations in the Kootenay-Boundary area with a truck route established to pick up products in small towns on a regular basis. Some processing is presently done to cottage scale operations in the valley. These businesses are sporadic and need time to develop into fully viable operations.

The wildcrafting industry has potential in the valley. It is well developed in the US Pacific Northwest with estimated revenues of $ 300 million per year and employment of roughly 30,000 people. However, the botanical resource base can be put at risk by unregulated over-exploitation. Thus, in some cases, regulation may be necessary to ensure sustainability.

An overview of the valley economy including the infrastructure, employment, and income situation is provided in this section. The alternative economy within the valley is discussed as well as the level of economic leakage and imports.

Strong, thriving economies often blossom from a strong infrastructure of transportation, power and communications as well as adequate business support including financing and business expertise. The following outlines the current economic infrastructure in the valley.

Physical infrastructure

Due to the lack of a rail line, the transportation infrastructure for the valley centers around Highway 6, which runs north-south through the valley from Crescent Valley to Summit Lake. This major transportation artery is augmented by highway 31A which spans east from New Denver over a mountain pass to Retallack and the Kaslo area.

Because of the rugged terrain in the valley, much of the highway system is narrow with sharp curves. This, coupled with the fact that a ferry crossing is necessary to access the valley from the north, increases average travel time to and from the valley considerably. The poor road condition and increased travel times adds to the feeling of geographic isolation in the valley. Valley residents note these factors to be both a “blessing” and a “curse”. A blessing in that some valley residents feel the isolation, and the fact that the valley is off of the “main” transportation corridors of the province, adds to the ambiance of the valley and provides a limiting factor to population growth. For tourists on a driving holiday the area makes for a scenic and interesting route. Curses in that, for the transportation of goods in and out of the valley or for everyday commuting within the valley, travel time and costs associated become a problem. The cost of transporting goods to and from the valley is noted as a disincentive to the establishment of industry, particularly in the north of the valley.

The poor condition of the highway is compounded by the wear & tear it takes from the constant flow of chip trucks through the valley bound for the Celgar plant in Castlegar. The large volume of use by these trucks was noted during the public input process as detracting from the valley ambiance because of the noise generated by the vehicles.

Public transportation in the valley is limited to a periodic shuttlebus operating between Naksup and Nelson. The geographic sprawl of the valley population means that most of the population must commute some distance to access services (such as health, education, and retail). Seniors and students acutely feel the limited schedule of the bus as well as those without their own vehicles who must travel regularly to such services.

Air access to the Slocan is limited to an emergency landing strip near Slocan City. The nearest airport with regularly scheduled flights is Castlegar, approximately 1 – 1.5 hours drive from the heart of the valley. In relative terms this is a short commute to an airport as residents living directly in a city often must spend a similar amount of time accessing an urban airport. Castlegar airport is hampered by the fact that it does not have radar to guide aircraft in, thus during the foggy months flights are regularly cancelled or delayed. Slocan Lake is currently being used by Slocan Forest Products to transport logs from the log dump in Rosebery to the mill site in Slocan as a cost-effective alternative to hauling them along the highway.

The poor quality and lack of available phone lines hamper the communication infrastructure in the Slocan. Many businesses are either unable to obtain extra phone lines for fax or Internet or have to undergo long waits to receive the service from BC Tel. BC Tel has begun upgrading service through the valley which should alleviate some of these problems.

The valley is not serviced by natural gas at this time. However there is an available grid of relatively cheap hydroelectric power throughout the valley.

The valley has an acute lack of zoned and serviced industrial sites, which acts as a deterrent to potential light & medium sized industry.

Business support

To flourish, successful business enterprises require, among other things, access to financing and educational services, favourable government regulations, and economic development expertise. Unfortunately some of these conditions are not present in the Slocan Valley.

Financing is available from two Credit Unions with branches within the valley, the Community Futures Development Corporation of the Central Kootenay, with an office in Nelson, the traditional banks with offices in Nelson and Castlegar and Business Development Bank of Canada in Cranbrook. The traditional banks and the Credit Unions offer a range of ‘normal’ lending options. The Business Development Bank of Canada offers term business loans, as well as special financing arrangements for high tech, export and knowledge-based industries. In addition, the Castlegar and Area Credit Union has a business start-up financing option which allows for a 10% rather than 25% capitalization on loans while Community Futures is focused on entrepreneurial and small business support.

Three valley businesses have accessed the Credit Union start-up financing in the past three years, with an average loan of $30-40,000. This Credit Union also participated in the Forest Renewal BC sponsored loan program, which allowed for financing up to $250,000 for forest-based businesses - no loans were processed for valley-based businesses.

Community Futures offers three week entrepreneurial training annually in the valley as well as the Self-Employment Assistance (SEA) program for new businesses. They also have a business loan fund to a maximum $250,000 with collateral and a Youth Loan Fund with associated entrepreneurial training. In the past 10 years, approximately 95 businesses have started in the valley through $1.4 million in funds from the SEA program, creating a total of 135 jobs. Since 1985 an additional 48 businesses supporting 189 jobs have benefited from business loans totaling approximately $1.5 million. It is estimated that 80-85% of these businesses have been success. Community Futures staff retain a presence in the valley through a monthly advertised office day in the north end of the valley.

There are admittedly gaps in financing for very small operating amounts, initiatives without adequate collateral and individuals moving from social assistance to entrepreneurship. A new initiative to establish a Community Loan Fund – giving tree - is currently being researched by a group of local citizens to address this gap in available financing.

Several organizations provide educational services in the valley with some economically oriented offerings, including Community Futures, Selkirk College, the school district, and the Open Learning Agency, which is available provincially. Both high schools offer Career Preparation and industry specific career programs to prepare young people for their working lives. The low population makes it difficult for a broad range of services to be offered, or for programs to be available regularly. The new Community School in Slocan is seen as a major new educational entity in the valley.

Separate municipal government regulations apply to the villages of Slocan City, Silverton and New Denver, with the Regional District of Central Kootenay responsible for the remaining rural area. Regulations from these entities, as well as the provincial and federal governments are seen by some to create a maze of government requirements that confuse and discourage economic development. The absence of land zoned for industrial development is a primary concern, although there is strong opposition to zoning from some.

A sound business plan, including thorough marketing information, is the keystone of a successful business venture. Most communities, even rural areas with low population, have publicly funded economic development expertise available to facilitate business development. This often includes development and monitoring of the impacts of government regulation, industrial land zoning and industrial park development and long-term economic planning as well as some limited support for individual businesses. Until 1997 the Regional District of Central Kootenay and the municipalities funded an Economic Development Commission who employed a part-time Economic Development Officer in the valley. This commission was disbanded in June 1997 when the regional district voted not to continue the funding of $13,000 (an additional $2,000 had been provided by the three municipalities). Although not formalized, a number of individuals have been working together as an ‘economic transition’ group to research economic development alternatives such as creating a community loan fund and a business resource centre.

It is useful to take a moment to contemplate how employment (and income) are generated and distributed in most western economies. Three distinct but interlinked components exist:

• Employment is created by companies who sell goods or services to markets outside a defined economy, resulting in income flowing into the defined economy. Examples from the valley would include sales of lumber to foreign markets, or an adventure tourism experience to a Calgarian. This is referred to as the ‘basic’ sector and the employment resulting from these sales is known as ‘direct’ jobs.
• The basic industries must purchase goods and services to produce and market their products, which also creates employment, either inside or outside the defined economy. For example, trucking is needed to distribute the lumber, or the adventure tour operator must purchase food for the adventuring tourist. This is referred to as ‘indirect’ employment and is usually accounted for in the associated basic sector.
• Individuals in the basic sector spend their incomes in retail, food, beverage, and other services which creates employment, again either inside or outside the defined economy. Using the same examples, the trucker and the tour operator needs food, housing and health care for their families. Individuals employed in the service sector also spend their incomes on services as well. This is referred to as ‘induced’ employment and these sectors are known as ‘non-basic’

Given this understanding of local economies, a strong, thriving economy would include the following characteristics:

• ‘basic’ sector businesses which sell the highest value goods and services to outside markets, to return the greatest economic value and employment to the local economy
• the ‘basic’ sector businesses would purchase as many goods and services from the local economy as possible, thus reducing ‘imports’ and resulting in a diversity of reliable, right-priced services in the area to meet the needs of these business
• the majority of the basic income would be spent in the local economy, creating a diverse and strong service sector which would also result in most of the non-basic income being spent locally.

Minimizing ‘leakage’ of basic income, and ‘imports’ of goods and services are primary objectives for such an economy. This is especially true in rural economies which are usually resource based, and sell low value, unmanufactured products to outside markets, with low levels of goods and service industries in their economy.

The 1996 Canada Census provides information on the employment categories of the people living in the valley (Appendix 2, Table 2), but this data does not illuminate the workings of the local economy - for example there isn’t a category for the tourism sector. Statistics have been developed to translate this data into the basic and non-basic categories (Figure 1). While this is the best available information, and can be relied upon for relative comparisons, the absolute values are not as reliable. Also, it is important to note that the census data documents the employment categories of people living in the valley - it does not describe the employment opportunities in the valley. As many people live in the valley, but work outside the valley, and vice versa, this analysis does not fully describe the employment available in the valley. However, it was outside the scope of this project to construct original data on the employment options in the valley.

Forestry        11%
Wood Manuf.     10%
Mining           2%
Agriculture      3%
Tourism         10%
Public Sector   12%
Construction     8%
Other           16%
Non-Basic       28%

Changes in employment

Comparing the changes in employment from 1991 to 1996 is instructive to come to an understanding of the local economy. Detailed information is provided in Appendix 2, Table 6). The sharpest increases in employment have occurred in the following sectors:

• accommodation, food and beverage (208%)
• health and social services (150%)
• retail trade (116%)
• business services (62%)

These increases are primarily in the tourism and non-basic service sector, which indicates an encouraging diversification and increase of ‘circling of income’ in the local economy.

Construction employment also increased by 50%. While there was an increase of 65% in forestry employment between 1991 and 1996, more recent information indicates a decline as the newly required resource inventories are completed and the ongoing market slump dampens logging and silviculture activity.

Conversely, the mining and government services have seen employment reductions of 65% and 36% respectively.

North/south employment comparison

During the public review for this project, views were expressed that significant differences exist between the economies of the north and south portions of the valley. The Canada Census data was analyzed to examine this perception (Appendix 2 Table 3).

This analysis indicates the greatest difference is in retail trade, with the north having 5% more retail trade employment as a percentage of the total employment than the south. Forestry, construction, health and social services are also slightly higher in the north. The south has a slightly higher percentage of communications, utilities, manufacturing and government services than the north. These are not, however, significant differences.

An explanation for the perceived differences may lie in the fact that the total workforce in the south is twice as large as the workforce in the north. This in itself could lead to expectations that the structure of the economy is different.

Income estimates were derived by applying average per capita incomes for each sector to the employment estimates. Per capita income were derived directly from Ministry of Finance tables for 1994 and can be considered fairly accurate, since little real changes in per capita income has occurred since then (Appendix 2, Table 7). Again, these estimates are reliable relative comparisons but are less reliable as absolute values.

This approach indicates a total income estimate for the valley economy of $105 million annually. Figure 2 illustrates the distribution of income in each economic sector, including the non-employment sector. Pensions, income from investments, employment insurance, social assistance and other transfer payments are included in the non-employment sector.

Forestry            11%
Wood Manuf.         10%
Mining               2%
Agriculture          2%
Toursim              3%
Public Sector       10%
Construction         7%
Other               13%
Non-Employment      27%
Non-Basic           16%

Based on this data, the valley economy is primarily dependent on non-employment income, forestry and wood processing, the public sector, and construction. It is important to note that investment and pension incomes together exceed any other single sector at 15% of the total economy - though forestry and wood manufacturing combined account for 21% of the valley income.

A comparison of the employment and income figures reveals some important differences in the economic contribution of each sector. The most telling difference is in the much smaller income contribution from tourism compared to the employment contribution - 3% of income from 10% of the employment. This is due to the much lower per capita incomes assigned to tourism - at approximately one third of other sectors. There is many debates about the relative income rates, with estimates varying above and below those used in this analysis.

It must be noted that many individuals supplement their primary incomes with secondary employment, unrecorded or ‘underground’ activities such as bartering, wildcrafting and harvesting of non-timber forest products, as well as subsistence activities (fishing, hunting, gardening). This enriches both the per capita income estimates and the estimated size of the total valley economy.

In addition, there is a substantial industry in the valley growing and marketing illegal substances, mainly marijuana. While this activity has been a traditional element of the economy for some time, there has been a recent boom, particularly in indoor grow operations. One estimate suggests this industry generates 5-10% of the valley income, or roughly $5-10 million annually. The public input consistently indicates even the high end of this estimate is likely low and suggests income generation in the range of $15 million annually.

As outlined earlier, minimizing ‘leakage’ and ‘imports’ are strategies to achieve a thriving economy. Unfortunately the valley economy currently has a high level of economic leakage and imports.

The income estimates illustrated in Figure 2 amount to a total basic income (i.e. cash injection from outside the valley economy) of roughly $86.8 million. In contrast, the non-basic sector (i.e. induced income resulting from basic income spending within the valley) is only $18.2 million. This indicates $68.6 million or 79% of the valley income ‘leaks’ from the valley economy through spending outside the valley. This is high but rather typical for relatively isolated, hardly diversified, rural economies which are, to a large extent, still dependent -in income terms at least - on the public sector, in-migration and the resource industries. It also demonstrates the theoretically huge potential for import substitution or ‘circling of money within the valley.

This section describes the citizens’ vision for the economy in the future and compiles the public input regarding the strengths and challenges of the valley economy. This information will be used to assess economic opportunities and identify options that are consistent with the economic vision, build on the strengths and address the challenges. Practical project assessment criteria are also identified to assess the general feasibility of options.

As the saying goes ‘If you don’t know where you’re going, it’s unlikely that you’ll get there.’ This section outlines a general direction for the valley economy based on public input.

There was almost unanimous agreement that big, commercial developments were not part of the economic vision for the valley. Some wonder what is wrong with the way the valley is developing now, and there are those who want the population and development in the valley to stay much the way it is today. These comments are often followed by the realization of the limited employment opportunities, especially for youth, and then puzzlement as to what economic activities would have the least negative impacts.

Citizens used the following phrases to describe their economic vision:

• clean, healthy and environmentally sustainable
• small, human scale development based on sound public planning
• diversity, and respect for diversity
• strong and thriving
• adequate satisfying employment with income levels that support families
• cooperation and unity
• self-sufficient as much as possible
• innovative, creative and unique

The healthy coexistence of resource extraction and tourism was identified by many as integral to their vision. Some saw service industries and home-based businesses as ways to achieve their economic vision for the valley.

Several individuals commented that it is important that economic change be slow, to allow citizens to adjust. At the same time, the vision of some includes action - at least from this plan.

Citizens identified three principal economic strengths:

• the local people who are diverse, multi-talented, skilled, creative, intelligent, hard working, self-sufficient, practical, determined, and, perhaps most importantly, strongly committed to the valley
• the clean, stunning, pristine condition of the natural environment, and
• the tremendous natural resources in the valley including the diversity of tree species and productive forest sites, minerals, scenery, and pure water

The authors would also add the abundance of low cost hydroelectric power, and the heritage infrastructure and ambiance of the Silverton/New Denver area as economic strengths.

As is often human nature, many more challenges were identified than strengths. The following principal categories are detailed below:

• lack of economic infrastructure
• diverse community characteristics
• the current state of the local economy, and
• limited employment opportunities.

The lack of an adequate economic infrastructure is often cited with the following concerns expressed:

• lack of financing, particularly for business start-up and micro-businesses
• while it is improving, the existing communications links (phone lines, internet access, cellular coverage) are weak and may even now limit high tech businesses
• the geographic isolation of the valley is exacerbated by the lack of quality transportation systems which make it difficult to get products to market efficiently
• the current absence of an economic/business development advocate and marketing expertise is seen to especially limit entrepreneurial and small businesses
• the opposition to and resulting lack of development zoning and planning is a concern, whereas the red tape and inconsistent regulations applied by local governments is also seen as a challenge
• the limited availability of social services, including employment services, education, community centres as well as child and health care, and recent reductions in these services locally is a concern for some, particularly as this may discourage potential new residents, especially seniors
• the limited area of flat land in the valley and the resulting high price of land is seen to deter large, land-intensive enterprises
• the lack of water supply infrastructures adequate to supply economic enterprises, and uncertainty about management of the extensive domestic water use which limits other land uses

It is recognized by many that the limited population cannot independently support a large number of diverse businesses - outside markets are seen to be needed for successful new businesses.

The lack of political will to support local initiatives is also identified as a challenge by some, especially because of the isolation, small population and limited contribution to government coffers (i.e. taxes).

The authors would also add that initiating collective action amongst the three distinct municipalities and the regional district might be a challenge.

While the personal characteristics of the local people is identified as a primary strength, the diversity of people and their economic wishes and conditions leads to mixed feelings about development, making it difficult to focus on an economic development direction that is broadly supported. The historical divisions in the community which is manifested in the land use struggles has resulted in distrust and uncertainty. The extent of possible change facing the valley economy and the traditional resource sectors has created fear of change for some. A range of citizens indicated there is a need to unite people to work together, with give and take on all sides.

The recent expansion in the illegal commercial marijuana cultivation and rumoured associated criminal activities has created some paranoia and breakdown in neighbourliness.

While the lack of economic opportunities for youth is a concern, some are of the view that youth are apathetic and unwilling to do hard physical work. For some in the valley, personal poverty resulting in the inability to dream and imagine economic opportunities is a reality.

The economic limitations created by a small population base is made worse by the tendency that many valley residents shop outside the valley, often because they work in Nelson or Castlegar. This is particularly true at the south end of the valley, but is substantial in the north end as well. This creates a high level of retail leakage of valley income and a reduced potential for economic development.

In general the valley economy is seen to be small and undiversified, with an over-reliance on the timber industry, where the primary harvesting and sawmilling sector is linked to international economies which are becoming unstable. This creates uncertainty, particularly because the traditional resource based economy has contributed significant tax dollars that are not easily replaced. There are views that the current timber practices are unsustainable and will negatively impact other potential growth sectors such as tourism and wildcrafting, leaving an economic vacuum behind.

As the economy is seen to be weak and unstable, it is not surprising that employment opportunities are currently limited. Many people, both skilled and unskilled leave the valley to find work.

There is a large group of unemployed adults available in the workforce, thus opportunities are particularly limited for youth and unskilled labour. While small business opportunities are seen to exist, youth and some adults lack the entrepreneurial skills to initiate such businesses. Another obstacle to this type of opportunity is the lack of business development support or networks available to support these individuals. Entrepreneurial businesses often don’t appeal to the unemployed because of often substantially lower incomes from entrepreneurship than paid employment.

Many residents want to work part-time, which is frustrating and expensive for business owners.

Lack of training funding and appropriate training approaches are seen to limit development of a skilled, committed workforce.

The vision, strengths and challenges identified above will be used to evaluate the identified economic development opportunities. Practical economic evaluation criteria were also sought to supplement the more general factors embodied in the broader vision, strengths and challenges. The public often reiterated their economic visions, thus this section only includes additional criteria not outlined above.

The following evaluation criteria were provided:

• number of jobs for local people, particularly for youth
• local and cooperative ownership/control
• long-term stability
• doability
• compatibility with existing enterprises
• capital/financing required

The economic development opportunities and the obstacles to achieving these opportunities in the valley are summarized in this section. Public input is the primary source of the information in this section - views the authors have added are clearly identified.

Many individuals with a range of interests identified the need for a coordinated valley marketing agency or cooperative. The view is that a collective marketing approach for a range of valley products would be most appropriate. It is expected that the agriculture, artisan, value-added wood and tourism sectors would benefit most from this initiative. The unique aspects of the valley should be emphasized, with strategic distribution to selected markets. It is suggested that local governments should provide funding to hire an experienced individual - this is not seen as a volunteer activity. Marketing training is also seen to be needed.

The valley is home to many creative, innovative individuals who are interested in entrepreneurial business. In order to foster this interest, entrepreneurial business development support is seen to be needed. This includes an advocate who can assist entrepreneurs to realize their business ideas, as well as a business ‘incubation centre’ or ‘resource centre’ to provide local business access to services and information such as: photocopying, access to the INTERNET and training. Facilitating cooperation amongst local businesses would be a primary goal of this initiative. Entrepreneurial business training was identified as a need by the value-added, tourism and wildcrafting sectors. While Community Futures is seen as a source for some of this training, there is a perception that Community Futures can be more active in the valley than they have been in the past.

The authors note that as broad community support and support of some of the local governments appears to be high for both initiatives, confirming broader local government support and securing funding are possible obstacles. It is also cautioned that the success of this type of initiative rests primarily on the capacity of the individual(s) hired to undertake this work - which may be an obstacle in the valley.

A community loan fund which provides a mechanism for local individuals and businesses to finance local enterprises is seen as a way to create financial opportunities for those businesses that do not qualify for traditional lending options. A local economic transition group is already investigating this initiative. The authors would add that the in-migration of retirees and ‘urban refugees’ might provide unexpected sources of loan capital.

The primary training concerns are focused on providing opportunities for youth to gain relevant workforce experience. Specific training suggestions include:

• experiential projects
• environmental projects such as site rehabilitation
• life skills programs
• first aid
• park ranger
• silvicultural brushingentrepreneurial skills
• work-readiness (resume writing, job interviews, etc).

There are also suggestions that a youth centre, summer gallery, or recreation program are needed to provide activity options for youth.

Opportunities to improve the availability of training within the valley were recognized, particularly at the north end. The absence of a recognized training centre and limited library services in New Denver and the lack of a resource centre in Winlaw are concerns. Community schools, as well as the New Denver and Perry’s schools are seen to offer opportunities, especially during the summer. Private, post-secondary institutions are also seen to offer possibilities to fill existing gaps.

There is a view that courses should be available even if enrollment numbers are low. Among the options suggested to increase the availability of training in the valley were: offering modules for credit courses, on-line access to the provincial classroom, joint work/training programs and apprenticeship/mentoring mentor programs could help fill the gaps in self-directed study programs.

There are concerns about the marketing of training in the valley and suggestions were made to better publicize and market available programs, such as establishing a 1-800 number for people to access training and other information.

Opportunities to improve access and training in computers were identified. Locations that are publicly accessible throughout the year (schools are not accessible in the summer) was a key priority. However, the new computer centre at the WE Graham Community School is seen as a new opportunity.

Re-training is seen as a priority, however the key to successful re-training is identifying what people want to do and linking these interests with real employment opportunities. Training is then directed at the identified, possible job opportunities. Mentoring and counseling should be made available to unskilled workers who are retraining to support their personal efforts and commitment.

Cross-cultural training is suggested to reduce the tensions between those holding opposing views and values in the valley, and to build increased tolerance, respect and understanding of the diversity.

While programs are currently available to people receiving financial assistance, there are inadequate offerings for others, particularly women who are returning to the workforce. Also, Employment Insurance programs could be improved by recognizing distance education courses for credit.

Funding is a limitation to local training endeavors, especially given the relatively low population and resulting low registration in some programs. Local training expertise is seen as one way to reduce training costs. Cooperative training involving youth, women and the value-added sector is also seen as in immediate opportunity.

Every effort must be made to continue the improvements to the communications technology (phone lines, Internet service, cellular phone) to allow electronically based businesses to locate and thrive in the valley.

Development guidelines for private land and a shoreline management plan for the lake are seen as opportunities to avoid conflicts in future economic development. The authors would also add that the lack of even a small area of industrially zoned land with suitable services would deter even small-scale industrial development.

Public transit is seen as an opportunity to promote economic development by some. This would provide a means of accessing services located in various parts of the valley for seniors, youth and low income families.

Waste management (i.e. sewage treatment, garbage disposal, recycling) is seen to be a growing issue as the number of residents and visitors increase in the valley.

The leakage of local income through shopping in the larger communities outside the valley is seen as a major issue by many. A community-wide commitment to shopping locally is seen to be needed and is expected to create the opportunity for local service businesses. A guide to local products and services and promotion of these services at community events are also suggested.

To reduce retail leakage from the valley, the types of services that are missing should be identified and businesses which plug these holes should be encouraged. Specific businesses that are seen to be needed include:

• tool rental
• trades due to the amount of construction
• funeral home/crematorium
• insurance agency
• pharmacy
• cottage industries to hire people with flexible work schedules (ie. cedar bark baskets, textiles)
• low-income housing

The authors note that a substantial shift in attitudes and habits will be necessary for success with this opportunity. However, the strong commitment of valley residents to the valley and its economy bode well for this initiative.

The authors would also note that there is likely substantial leakage of spending on industrial supplies by the wood processing sector in particular which may create some local business opportunities.

Many individuals with a range of views supported the expansion of home based businesses, including consulting, construction and electronic businesses. The authors note that the poor quality of the high tech communications infrastructure will be an obstacle to some electronic businesses.

The aging population in our culture is seen by many to create two opportunities - the first is in-migration of retirees and the second is increased senior services such as independent living facilities, health care, garden and housework, and transit. In the authors’ view, although the natural beauty and ambiance of the valley will attract some seniors, the winter weather and isolation will deter some. Also, without improved services (housing, hospitals, libraries etc.), some retirees are likely to choose to live in the valley during the early years of their retirement, returning closer to family and friends as their need for support increases.

A broad range of people sees high quality, niche-based micro farms as substantial economic opportunities in the valley, especially in the southern portions. Organic farming is seen as the most viable enterprise. An innovative system where food consumers finance producers directly through ‘community supported agriculture’ was quoted often. These businesses could also contribute to the tourism activities in the valley. Specific opportunities include:

• primary and value-added hemp production
• using wasted fruit for products such as jams
• greenhouses, preferably located on marginal land, to take advantage of the low hydro cost
• growing mushrooms in abandoned mines
• cosmetics
• potato chip factory
• restoration of heritage orchards and marketing heritage fruit trees
• native plant nursery
• fish farming and smoked fish
• alternative crops planted on logged areas such as planting hemp in young tree farms to provide shade for vulnerable young hemp seedlings, with annual harvesting for paper production or sale to fabric makers
• teabag manufacturing

While some individuals are of the view that the agricultural landbase is too limited to support a strong agricultural sector, the available data indicates there is ample farmland currently available for substantial expansion in agricultural enterprises.

The inability of existing growers to provide a continuous supply to local markets is currently a major impediment that could be alleviated with over-winter storage facilities. While the local organic markets present large, real opportunities, a collective marketing approach is needed to avoid unproductive competition in the sector. As with other small businesses in the valley, the lack of access to business support and financing are obstacles to this sector, as is the need for specialized equipment and distribution mechanisms.

The lack of motivated workers also limits some operations, however most operators can only provide part-time work. The absence of an organic horticulture training program in the province is also seen as an obstacle. While some have concerns about their limited access to the agriculture specialists in Creston, others indicate these individuals are easily accessible and extremely helpful.

The existing heritage orchards are seen as an opportunity for specialty products and plant sales, however these trees are heavily diseased making it impossible for successful new orchards to become established. In a similar fashion, while hemp is identified as a potential opportunity, there are concerns about this crop cross-pollinating the illegal marijuana plantations.

The existing New Denver market is supported by many in the area, and it is suggested that additional markets be established at the southern end of the valley. Mainstream farmers markets would also be successful in larger local communities such Nelson, Castlegar, Trail, Rossland, etc.

A substantial area of high quality farmland from north of Lemon Creek to Slocan Lake is currently flooded every year because the spoils from a railway dredging project were left at the creek mouth in the mid-1940’s, restricting the river flow. Removing this restriction would increase the amount of farmland in the valley. There is a range of views about the impact of removing the restriction on the fisheries and wildlife habitat associated with the river. The authors note that this potential opportunity is not well known or understood by the local citizens which may make it difficult to initiate. Also, government funding will be required to undertake this work. Precautions will have to be taken to avoid downstream flooding and ensure impacts on fish and wildlife are addressed.

Processing local agricultural produce to higher value products is seen as an opportunity by some. Cooperative processing facilities are needed to support this initiative, however the existing community kitchens (Appledale, Vallican Whole, Slocan School, etc.) are seen by some to provide adequate facilities now that meet health standards.

Opportunities are seen for existing artists to initiate seasonal, cooperative marketing efforts to expose more local people to the local art community, and to make local art more accessible to tourists, with a focus on ecotourists. A brochure highlighting the unique arts identity of the Slocan Valley, with a map showing the location of art studios and sales sites would be helpful. Partial funding support would be needed for this initiative. In the authors’ view, this would also require a cooperative spirit amongst the artists, many of whom have chosen an independent business approach.

Marketing high profile one-of-a-kind pieces is also seen to be the way to raise the profile of valley art.

As with most small businesses, the small cottage artistic enterprises in the valley would benefit from business support and financing.

Many see opportunities for a summer art festival and market with educational activities. The Valhalla Music Centre model is suggested as well. Base funding is seen as the major obstacle to this initiative. The authors would add that organizational capacity would be needed to realize this opportunity.

A flexible network of trained production art workers who can be available during busy times so larger orders can be filled locally would be an asset. The valley should be marketed as an affordable place for artists to live to attract a larger art workforce. A wood-fired community kiln is also seen to be needed.

Given the historical debate about forest management in the valley, it is not surprising that a range of public views were expressed on the opportunities and obstacles to economic development in this component of the economy. The consistent message, however, was of the need to resolve the issues so the communities of the valley can move forward with some certainty. There were no proponents for absolutely no logging, but there was a very wide range of views as to what type and how much logging was appropriate.

Management practices

There was much support for resolving the watershed management issues, preferably through implementation of an ecosystem-based approach to forestry, which is expected to create many more jobs than the current practices. While some support the Silva Plan, as many individuals indicate, the Silva Plan is not the only alternative.

One segment of the community sees the current rate of timber harvest as the primary obstacle to sustainable development in the valley. There are views that continuation of the current practices may eliminate options to pursue other economic opportunities. Specific changes to practices were called for including moratoriums on logging certain areas, and creating a diversity of forest types in the long-term.

Some people cited the cost of forest practices in BC, and in the Slocan valley in particular, as an obstacle to economic development. The Forest Practices Code and the Kootenay Boundary Land Use Plan were also identified as obstacles.

Opportunities are also seen to exist in rehabilitating old logging sites and integrating logging and mushroom production.

It was also suggested that forest management information be integrated into local schools to reduce the current alienation.

Small scale timber salvage

Several individuals supported expansion of the current salvage harvesting initiative, particularly for cedar or small volumes of specific species for targeted uses. Having more small operators is seen to benefit the community. The primary obstacle to this approach is adequate government staffing to facilitate this type of license and cooperation from licensees who have first right of refusal on the salvage volumes.

Expertise

There is seen to be the need for more local forestry expertise and experience in the valley. There is a broadly held concern that the public and private sector resource managers do not live in the valley and are not part of the local community. Suggestions were made for improved inventories and mapping of soils and wetlands for planning as well as research and training to bring the top specialists to the valley to develop appropriate practices.

Tenure reform

A segment of the community supports increased community control through alternative tenure forms as a substantial opportunity. Tenure reform is seen to a primary way to address the fibre supply shortage. New forms of tenure should be linked to value-added manufacturing and silviculture employment. The authors note the new community forest license may fit the valley’s needs.

Alternative logging practices

Selective harvesting and labour intensive logging practices, including horse logging, which result in more jobs per cubic meter of timber harvested are supported by a broad spectrum of the community. Current harvesting methods are seen as antiquated, too production oriented and resulting in too much damage to the timber harvested. One individual indicated Slocan’s alternative harvesting crew should be supported as a move in the right direction.

Implementation of alternative harvesting practices is expected to lead to environmental certification of timber harvested from the area which is expected to create more possible markets for locally produced products.

Demonstrations and information of current logging techniques and alternative harvesting strategies are encouraged and could become a tourism service. Access to training in sophisticated logging systems (i.e. intermediate supports, longline, skyline, etc.) is needed to implement alternative practices in the valley. It was also suggested that training in grading and log quality be provided for loggers to improve the quality of logs produced. While Forestry Continuing Studies Network courses are available, they need to be delivered in the valley, at the right time of the year so loggers are available, with better advertising and support for loggers to attend.

Log merchandising/log sort yard

There is broad support for improved sorting of logs based on their best end use, and to improve access for the smaller operators. This includes sorting at the logging site and in mill yards, as well as the possibility of creating an independent log sort yard.

Additional sorting would increase log costs, and is seen to be feasible if the market will bear these additional costs. Also, a log sort yard will not ensure logs are available to local operators unless they are able to meet the market values for the logs. There is skepticism about the feasibility of a log sort yard because Slocan Forest Products, which controls the majority of the timber harvested in the valley, needs all the timber they harvest, and small operators likely won’t be able to pay the prices required to purchase from them.

Private land logging

Opportunities are seen to implement alternative harvesting practices on private lands, possibly through covenants or tenure reform. The timber harvested from farms and woodlots are seen as an opportunity for wood product producers in the area.

Employment and timber supply opportunities are seen in increasing the current relatively low level of juvenile spacing, thinning, pruning, fertilization and brushing in the Slocan valley. The new Innovative Forest Practices Pilot Project is understood to ensure the implementation of this opportunity.

There are rich pockets of minerals in the area, but as they are relatively expensive to extract, especially with current government regulations and the world markets being depressed, few immediate opportunities exist. When prices increase, opportunities are seen for traditional minerals, particularly with smaller, underground operations that are not highly visible. Existing extraction of sand, gravel and landscape rock should continue, and gemstones are an opportunity for entrepreneurs. There is a view that tax adjustments by the local regional district would do much to encourage local mining initiatives. The community’s anti-development attitude is seen as an obstacle to this industry.

While tourism is generally seen as an economic opportunity for the valley, there are very mixed views about what type and how much tourism should be promoted. Most citizens are not supportive of large developments, while a few are; some want active, motorized use of the lake while others don’t; some want higher use of the large provincial parks, while others are concerned about the environmental integrity of these areas. Still others are concerned that expansion of the tourism sector will create crowding in the valley, disrupt wildlife and increase the environment/resource extraction conflicts. Thoughtful, cooperative development will be needed to create a tourism sector that ‘fits’ in the natural environment and the developing valley economy.

The economic potential of commercial tourism is questioned in the valley. Some are of the view that the valley is too far from the population centres, major transportation routes, airports and well-publicized parks that tourists frequent, and the tourism season is too short to support viable businesses. Tourism is seen to be strongly tied to global markets and thus unable to support stable, long-term businesses. Also, the employment opportunities are viewed as seasonal and low paying, and thus not the type of jobs that are wanted in the valley.

Marketing the unique qualities, historical character and natural beauty of the valley, and the Kootenays, is an opportunity identified by many. Coordination and advertising through signage, info centres, and the beautification of main village streets is seen to be needed to encourage tourists to come to and spend more time in the valley, particularly the ‘black-top destination’ and drive-through tourist trade. Both European and American tourists are seen as possible visitors. It is also suggested that the area be marketed to the film industry. Marketing must differentiate the valley from other naturally beautiful rural areas to create a unique and diverse economy.

Local tourism entrepreneurs note that advertising is expensive, and they have little experience in this area. The industry suggests a ‘Tourism Association’ be formed to develop and implement a tourism marketing strategy for the area.

The existing ‘special places’ that are known to the locals should be better advertised and access should be maintained. These include: Idaho lookout, yellow cedar reserve, Carpenter Creek to the gorge at the hydro dam, Bannock Point, Wilson Creek and falls, Bonanza Creek, the Alamo mine gardens and Airie Creek.

Many support expansion of eco/adventure tourism in the valley to achieve low impact economic development and take advantage of the three provincial parks. It is suggested that arts enterprises, natural history education and wildcrafting be integrated with ecotourism. The following specific opportunities were identified:

• guided hiking, including hut to hut hiking
• guided backcountry skiing
• guided mountain biking
• build on the kayaking momentum after having the Canadian Nationals on the Slocan River,
• possibly creating an annual festival
• canoeing guiding and instruction
• birding sanctuary and tours
• wildlife viewing and wildlife sanctuary development
• trapline experience, providing the current limiting regulations can be adjusted
• guided fishing in the Slocan River, Little Slocan Lake and high mountain lakes, with stocking and management
• horseback riding
• llama pack trips
• snowmobiling

It is suggested that beginner and family-based tourism experiences be the focus, not elite levels. Also, while continuing road access to the backcountry is seen as important to retain tourism options, there are concerns that tourist access to the backcountry may create dangerous situations with industrial road users.

Most of these businesses will require a commercial backcountry recreation license, which is seen to entail a large amount of red tape and regulation. It is also suggested that municipalities promptly exercise the opportunity to identify a radius around each community where commercial operations will be exempted from licensing.

There is widespread support for improved access, infrastructure (trails, sites, etc.) and advertisement of the hiking and backcountry opportunities in the three provincial parks, possibly as a focal point for backcountry recreation opportunities in the valley. Increasing the presence of the provincial parks in the communities of the area by having staff housed locally and constructing an information booth and interpretive center in the valley is encouraged. Development of commercial use is suggested by some, such as a lodge at Big Evans Lake, which was advertised for proposals, and huts for wildlife viewing and other uses. The current requirement that only licensed ‘guides’ can lead tours in the parks needs to be addressed, as well as the restricted use of pack animals in the parks.

There are cautions that increased use of the parks must be approached conservatively to retain the natural environment.

The lake is seen to offer a huge opportunity for increased tourism. Specific opportunities include:

• a tour / entertainment boat
• paddlewheeler
• boat rentals
• lakeshore trail
• fully serviced marin

The lake pictographs were mentioned as unique tourism opportunity.

A prime location for a marina development is said to be limited by the current land ownership and expected high land price. While there is agreement that the lake presents a special opportunity, there are some who do not see motorized use as a priority and support regulation of peace and quiet on the lake.

Many people support the development of a resort focused on alternative health approaches. Opportunities were identified for: injury rehabilitation facilities, ‘dysfunction’ (drug, alcohol, etc.) treatment centres, spas/rejuvenation centres and spiritual retreats as well as schools and clinics in naturopathy, Chinese medicine, Tai Chi, and general wellness. ‘Think tanks’ or corporate retreats are also suggested. These opportunities are seen to build on the benefits of the isolation, natural environment, organic food and expertise in wellness in the valley.

Several individuals commented that the lack of tourism infrastructure and facilities limit tourism in the valley. While some facilities do exist, many additional opportunities are identified including:

• the rails-to trails program, which is encouraged by many, including wheelchair access, although there are conflicting views on whether non-motorized controls are appropriate, and concerns about the rights and liabilities of private land owners
• bicycle friendly roads with adequate shoulders would complement the rails-to-trails initiative
• hotels, bed and breakfast accommodation and campgrounds, particularly linked to the rails-to-trails initiative
• fully serviced RV park at the south and north ends of the valley
• interpretive sites on historical resource extraction and the local parks
• parking area and picnic tables in New Denver or Silverton
• expand Summit Lake ski hill, or develop a new hill at Sandon
• hiking trails on private property for guided hiking
• develop active displays at Fingland cabin in Silverton
• golf course and condos

Many possible services were suggested including:

tours of historical mining sites, particularly for Europeans

Bus tours were mentioned but some suggested these are too big for the highway and the valley. Others suggest the current chip trucks negatively impact travelling tourists and bikers.

h) Business support

As with other small and entrepreneurial enterprises in the valley, there is seen to be a lack of financing and knowledge to develop successful tourism businesses. The need for expensive liability insurance is identified as a particular obstacle.

8. Value-added Wood Products

Widespread support for value-added wood manufacturing is expressed. The focus is on higher value processing of the locally produced wood in small operations, increasing the number of businesses and creating more jobs.

a) Marketing and business support

As with other small business sectors in the valley, value added manufacturers need help with marketing, management skills and financing, especially during start-up. Designed wood producers are seen to particularly require marketing assistance. Marketing opportunities such as showcases or a local marketing board were suggested. Taxes are seen to limit small operators.

b) Cooperation and communication

As there are already over 60 small value-added shops in the valley, the need was seen to promote linkages and cooperation between the existing producers to better integrate local operations from primary breakdown to final product. Both Slocan Forest Products and the existing value-added operators expressed strong interests in establishing linkages through clear lines of communication. Specific opportunities are seen in utilizing the current ‘fall-down’ (lumber that is currently chipped) and other wood waste at the sawmill. Some see the potential for a ‘Slocan Valley Value Added Manufacturers Association’ to promote the local industry, foster cooperation and disseminate information. There was one suggestion for a cooperative, community-owned mill in the valley.

While an interest in cooperation was expressed, it is agreed that currently poor communication exists between the value-added sector and Slocan Forest Products. Recognizing that the lack of cooperation is purely a communication problem may be a major step towards developing cooperation and expansion of this sector.

c) Wood supply

As elsewhere in BC, access to timber supply at an affordable price is identified by many as a barrier for value-added businesses which rely on logs rather than lumber. The view is broadly held that the current timber tenure system is seen to ‘shut out’ small operators. The lack of diversity in the form of tenure, and the concentration of cutting rights in the valley with Slocan Forest Products are seen as liabilities that do not promote innovation or diversification. Although timber is available through the Small Business Forest Enterprise Program (SBFEP) it is subject to problems. Surrogate bidding by the large companies outprices small operators, and the new value-added sales are expensive and in difficult logging areas, making them unappealing to most value added operators. Currently opportunities in the SBFEP program are limited while harvesting practices are developed for contentious areas. One suggestion to address this access to fiber situation was that continuation of existing tenures should be tied to contribution to value-added manufacturing.

Because of the existing lack of communication between Slocan Forest Products and the value-added sector outlined above, there is little cooperation between small operators and company, resulting in the perception that the company is unwilling to sell logs or lumber to the smaller operators. Inconsistent supply of the grades and species needed, an unwillingness by the company to supply small volumes and the inability of small operators to pay market prices are also obstacles.

Utilization of birch and cottonwood was identified as an opportunity for this area.

d) Secondary remanufacturing

The existing secondary remanufacturers - Goose Creek Lumber and Perry Ridge Paneling should be supported, and opportunities are seen for other operations including tongue and groove production and a finger joint block facility as well as log and timber frame operations.

Obstacles to these operations include the isolation of the area and the poor state of the transportation infrastructure with resulting high transportation costs, as well as the lack of appropriate land without potential conflicts over noise, and the softwood lumber quota restrictions on some products.

e) Designed product manufacturing

Widespread support exists for this level of wood manufacturing and many possible products were suggested including the following:

• furniture such as IKEA style, breakdown furniture of unique design with cushions made
• locally, Italian style cottonwood furniture,
• orchard ladders
• lamps
• shelving units
• cedar garden products for urban buyers

A dry kiln is seen to be needed to support local cabinet businesses.

f) Wood waste

The opportunity for a centralized wood waste processing facility that generated power was suggested.

g) Workforce

While value-added wood manufacturing is generally seen as an opportunity, it is recognized by the industry that wage rates must remain relatively low for businesses to be competitive in this industry. Often mechanization is pursued to reduce costs, which is inconsistent with community goals of greater employment.

It is recognized that training is required in this sector. Grading, log quality, computers and trades are the identified needs for workers in primary and secondary remanufacturing plants. Operator training for specific value-added machinery such as molders and shapers, as well as saw filing, is identified by the industry. The existing Value-Added Wood Products Training Skills Center programs delivered locally from the Center in Abbotsford are seen to be an ideal source of training for this industry.

9. Wildcrafting/Botanicals

While the view is quite widespread that wildcrafting could expand substantially at the cottage industry scale, there are others who don’t see viable business opportunities in this sector. Collecting botanicals before timber harvesting is seen as an opportunity. The formulation of regulations on the level of non-timber harvest to ensure sustainability is a widespread concern. Potential products include:

• mushrooms, including spore injection in harvested tree stumps
• hemp cultivation (providing seeds are available)
• medicinal herbs (if pending restrictions to no limit options)
• agroforestry on rehabilitated clearcuts
• wines from alternative products (i.e. dandelion, elderberry)
• cedar bark marketing and cedar bark baskets

Amongst those who see opportunities in wildcrafting/botanicals, a cooperative marketing organization is seen to be needed for strong, non-local sales. Hands-on training, including plant identification, is seen to be needed by the industry. As this is a newly developing industry, there may be an opportunity to build on the local expertise to create a provincial centre of excellence with training and other services for this sector, perhaps in cooperation with the University of British Columbia School of Agriculture.

The authors would note that the current subsistence level of most businesses and the absence of an existing cooperative entity might restrict the development of this sector locally.

10. Water a) Sample laboratory

The existing water sample laboratory is seen as a possible opportunity that could be marketed and used beyond the valley.

b) Bottled water

A small plant was initiated north of New Denver but was abandoned and is seen as a possible opportunity. Soft drinks and a microbrewery are also suggested. The authors have researched this and the primary obstacle is transportation cost.

E. Analysis

This section begins with an overview of the economic opportunities and an outlook for the major sectors of the economy. This is followed by an analysis of the opportunities identified, including identification of the primary obstacles.

1. Overview

Though somewhat unexpected, there is strong support from a broad spectrum of interests in the valley for a number of economic opportunities. These include:

• business marketing support and facilitation
• buy local focus and expansion of local services
• home-based/electronic businesses
• micro/organic agriculture
• eco/adventure tourism
• tourism facilities and services
• alternative healing/health resort
• value-added wood processing
• wildcrafting and botanicals

Although the public did not explicitly identify this opportunity, when the authors suggested it there was also broad support for festivals and events.

Many of these opportunities are well suited to entrepreneurial businesses, which fits with the employment and economic vision of valley citizens. While in other circumstances citizens are comfortable only with employment options - finding a job - in the valley there is an unusually high, and encouraging, interest in entrepreneurship - creating your own employment. Some of these opportunities are also ideal for youth employment or entrepreneurship, which addresses an important, and broadly shared concern about the lack of job opportunities for youth.

2. Outlook

It may be comforting to know the economic situation in the Slocan valley is shared with most rural areas in the world. Globalization of traditional industries and the expanding role of technology and services in our economy have favored urban settings in the recent past. There are signs that these same factors, as well as increased focus on quality of life issues, will lead to a large segment of the population seeking rural life.

Predicting the winds of economic change is difficult at best and perhaps foolish at worst, however a brief outlook is provided here. For the largest economic sector in the valley - forestry and wood processing - the expectations for the next year are not positive. The current slump in markets and related harvesting is expected to continue through 1999 and possibly into early 2000. Harvesting reductions have also prompted reduced work for the growing number of specialized resource consultants, at the same time that opportunities were leveling off after implementation of the Forest Practices Code. Reductions in operational and Forest Renewal BC programs have reduced investment in silviculture and employment for the large silviculture workforce living in the valley. Downtime, layoffs and reduced employment insurance income are real possibilities affecting the 21% of the valley workforce directly and indirectly employed in these sectors.

In the longer term, the forecast reduction in timber supply resulting from the Forest Practices Code and the Kootenay-Boundary Land Use Plan are not expected to impact either logging or mill workers. This unusual situation exists because historically both Slocan Forest Products and the Ministry of Forests have cut less than their allowable annual cuts. As a result, current harvesting is at approximately the level projected after the Forest Practices Code and Kootenay Boundary Land Use Plan adjustments. Consequently, no change in employment is expected. If the watershed and viewscape practices that are implemented in the valley are more restrictive to timber harvesting than outlined in the Kootenay Boundary Land Use Plan, employment losses may occur. This will depend on the amount of logging employment that is created through any new practices, and the impact of a reduced fibre supply on the financial position of the sawmill. If new practices are more restrictive to timber harvesting, this analysis should be redone to define employment and economic impacts.

Public sector employment and income is a substantial portion of the valley economy, though lower than in more central communities. Further reductions in this sector may occur as government agencies adjust to reduced operating budgets.

For tourism, the third largest single component of the valley economy, the outlook is positive if the current trend in the value of the Canadian dollar continues. Targeted marketing and expanded facilities and services would greatly enhance the potential of this sector. While growth in this industry will create employment and diversify the economy, income cannot be expected to be great.

Although the agriculture sector is relatively small, there is excellent potential for organic agriculture to take advantage of local markets as well as those farther afield. Though opportunities are positive, relatively low employment and modest incomes can be expected.

The sectors of the economy which depend on local spending, including retail, food, beverage, construction, financial services, etc., have grown steadily in past years, primarily in response to the increasing population. Continued population increase is difficult to predict, however it is likely that the valley will continue to benefit from the in-migration of retirees, urban dwellers, and home-based businesspeople seeking the quality of life available in the valley. This in-migration should continue to fuel growth in these sectors, as well as the already prominent income from investments and pensions.

While real economic opportunities do exist within the valley, no short-term, quick fixes were unearthed. All the opportunities are small scale, with each creating a few jobs and, with most, modest incomes. Few can be expected to realize gains in less than two years. Some require the collective focus of committed citizens, local governments and the private sector to see them through to success over the longer term.

3. Entrepreneurial Opportunity Analysis

A preliminary analysis of the entrepreneurial business opportunities identified as having short-term potential was completed to identify the most promising options. The analysis criteria are based on the public input and include:

• contributing to the economic vision (clean/low impact, small scale, diversified economy, diverse employment).
• building on the strengths identified in the valley economy (people, natural environment, natural resources), and
• addressing the challenges facing the economy (lack of infrastructure, brings the community together - broadly supported, diversifies the economy, creates employment for youth, expands entrepreneurial skills)

The specific economic evaluation criteria provided by the public are also included. These are number of jobs, modest wages, satisfying work, long-term stability, compatible with existing economy, timeframe for implementation, doability.

The following business opportunities are the best fit with the economic vision for the valley and have immediate potential given the economic strengths and challenges that exist:

• micro and organic agriculture developed for sales in regional markets
• small scale timber salvage
• enhanced silviculture contracting
• wildcrafting/botanicals

A number of businesses also fit the economic vision and have potential for economic returns after adequate marketing and business development, likely in 2 to 3 years:

• eco/adventure tourism
• tourism facilities/services
• home-based electronic business
• festivals/events
• designed wood product shops

These opportunities could be realized either through expansion of existing businesses, or the creation of successful new businesses.

Substantial capital is needed to realize the opportunities presented by alternative harvesting practices, secondary value-added wood manufacturing, or an alternative health resort. It may be possible for the resort concept to be implemented as a collective effort by a number of entrepreneurs, without extensive capital investment. For example a bed and breakfast operator, massage therapist, aromatherapist, naturopath, hiking guide, and yoga instructor might jointly offer a unique wellness experience in the valley setting.

Appendix 3 contains the detailed analysis of entrepreneurial opportunities.

4. Economic infrastructure

The existence of an economic infrastructure in an area, and its condition, will limit or encourage business and economic growth. In the Slocan valley, the infrastructure is strongly identified as a major limiting factor for most businesses. The following are opportunities to create a strong foundation for a thriving economy.

a) Business Support

There are many existing small enterprises and individuals with the entrepreneurial spirit to expand and start small businesses that are consistent with the valley economic vision. However, they need business facilitation and marketing support to realize the potential of their ideas.

Small business has become the economic engine of Canada, creating approximately 80% of the new jobs in the past year. On the other hand, approximately 80% of small businesses fail, most in their first year. Imagine the potential if more of these businesses succeeded. Given the economic vision of the citizens, the high entrepreneurial spirit and the potential opportunities in the valley, the odds of economic success by pursuing options that support small businesses seem high.

It is clear that a ‘sparkplug’ is needed to ignite the small business potential in the valley. Exactly what form this sparkplug should take can be debated. Several options exist. The most barebones model - the one minute guide - is appropriate for smaller communities and is based on a small group of citizens working as volunteers over the long term to create the appropriate business climate and to support individual business development. Another is the traditional community economic development model where a local government hires an Economic Development Officer who focuses on building community capacity and creating the appropriate physical and tax infrastructure to attract and support businesses. Often this individual works under the direction of an Economic Development Commission of appointed local citizens. Another more recent approach - enterprise facilitation or entrepreneurial coaching - focuses on the commitment of entrepreneurs. This model calls for partnership funding to hire an individual who is intensively trained to work with entrepreneurs to access specialists and funds. The objective of this approach is to build strong processing, marketing and financial teams for each business. A Management Board of predominantly local citizens directs this Enterprise Facilitator. Other approaches also exist.

A common theme of these options is the group of committed citizens who volunteer their time over a long period to take an active role in the economic development of their area. These individuals usually encourage cooperation and communication within the community as well as networking outside their communities as well.

Where the models differ is their focus on either community economic development or business support. Community economic development includes such activities as encouraging improvements in physical infrastructure, providing economic information to businesses and facilitating the development of ‘human infrastructure’ including industry associations, partnerships and community organizations. Business support, on the other hand, is focused on working with existing business owners and new entrepreneurs to expand businesses and create successful new businesses. This is achieved by focusing on the production, financial and marketing requirements of specific businesses. While marketing has been repeatedly identified as the main factor currently holding businesses back, strength in processing and financing are equally important.

An implicit element of these models is the commitment of local governments to support economic development and an economic focus in their areas. While it is possible for citizens to achieve substantial success working independently from local governments, much more can be accomplished with collective action and commitment.

The cost of creating an economic focus or ‘sparkplug’ in the valley depends on the model chosen - but it must be expected that a public investment in the economy of the valley is necessary to achieve the needed kickstart. At a minimum, funding would be required for administrative services for the citizens committee. The enterprise facilitation model available through the Scirolli Institute, an internationally successful business support model, requires approximately $70,000 per year. Possible funding sources for this investment include: the regional district through tax levies or allocation of the BC Hydro grants in lieu, the municipalities, Columbia Basin Trust, Forest Renewal BC, the Industrial Adjustment Services program funded by Human Resources Development Canada and the provincial Ministry of Advanced Education, Training and Technology, the Ministry of Small Business, Tourism and Culture, the Municipal Finance Authority alternative capital fund, foundations and the benefiting businesses.

A possible solution for the valley is that a volunteer citizens economic board could address the economic infrastructure needs including:

• promoting 'buy local' and expansion of local services, especially for seniors
• facilitating development of farmers markets and festivals/events
• supporting expansion of financing options
• promoting improvements in communications infrastructure, public transportation and waste management as needed to facilitate business development
• encouraging training initiatives based upon the needs of the valley residents
• marketing the valley as a location for home-based and electronic businesses and retirees

An Enterprise Facilitator working under the direction of the volunteer citizens committee could then focus on assisting specific business entrepreneurs, particularly those developing businesses that fit the economic vision of the valley including home-based and electronic businesses, micro- and organic agriculture, arts, tourism, value-added wood and wildcrafting/botanical enterprises. This would include building strong processing, marketing and financial teams for each business, as well as assisting the entrepreneur through the government ‘red tape’ maze. The Enterprise Facilitator could also be the resource person for local trade associations (i.e. tourism, value added, etc.) if these develop. Marketing of existing tourism, arts and wood products would also fall to the Enterprise Facilitator. The Facilitator would provide feedback to the board as to which infrastructure components were most limiting business development in the valley.

In addition to a human focus for economic development in the valley, a physical focus is suggested. A Business Resource Centre or Incubator is proposed. This centre would house business support services such as photocopying, FAX machine, and information including INTERNET access.

It must be clear that, in the authors’ view, without a strong business support focus in the valley, the real economic opportunities that exist will not be realized.

b) Financing

The Credit Unions, Business Development Bank of Canada, Community Futures and the traditional banks provide financing for businesses with defensible busi