ASSESSING THE ECONOMIC BENEFITS OF ANCIENT FOREST TRAIL ECOTOURISM IN MCBRIDE, BRITISH COLUMBIA by John Hall B.A., McGill University, 2009 THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN NATURAL RESOURCES AND ENVIRONMENTAL STUDIES UNIVERSITY OF NORTHERN BRITISH COLUMBIA September 2013 © John Hall, 2013 UMI Number: 1525673 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI Dissertation PiiblishMig UMI 1525673 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 ABSTRACT McBride, British Columbia, has long relied on forestry as the primary sector of its economy. With shrinking employment, timber demand and supply, community members are now pursuing opportunities for economic diversification. Tourism has been identified as one o f three initiatives aimed at improving local economic stability and diversification. An emerging element in the region’s ecotourism potential is the Ancient Forest Trail (AFT). The purpose of this research is to assess the AFT’s potential economic benefit as a tourist attraction and contributor to economic diversification. First, the number o f AFT tourists and their economic benefit is calculated using a trail counter and questionnaires. Second, AFT ecotourism is examined in the context o f local economic diversification, using economic analyses to describe the structure and dynamics of the local economy and key informant interviews to access community knowledge. Results describe a local economy in transition, an emerging ecotourism attraction with a positive economic benefit, and a community disagreement regarding tourism as an economic priority. Key Words: Economic diversification, Rural Economic Development, Ecotourism, Ancient Forest Trail, Ancient Cedar, McBride, British Columba Table of Contents Abstract i Table of Contents ii List o f Tables and Figures iv Acknowledgements vi CHAPTER ONE: Introduction 1.1 Site Description 1.2 Ancient Forest Interpretive Trail 1.3 Research Questions and Objectives 1.4 Chapter Preview 1 2 6 7 8 CHAPTER TWO: Literature Review 2.1 Defining Tourism, Ecotourism, and Tourists 2.2 Methodological Issues 2.2.1 Economic Impact Analysis 2.2.2 Measuring Structure and Dynamics o f a Local Economy 2.2.3 Tourism Related Economic Impact Analysis 2.2.4 Tourism Related Interview Literature 2.3 Economic Diversification and Tourism in Resource Dependent Communities 2.3.1 McBride as a Resource Dependent Community 9 9 12 12 CHAPTER THREE: Methods 3.1 The Economic Benefit of AFT Ecotourism 3.1.1 Trail Counter 3.1.2 On-Site Questionnaire 3.1.3 Direct Tourism Expenditure Research 3.2 The Role o f Ecotourism Within the Context o f Local Economic Diversification 3.2.1 Trade Area 3.2.2 Shift Share Analysis 3.2.3 Location Quotient Analysis 3.2.4 Income Dependencies 3.2.5 Growth Share Matrix 3.3 Local Knowledge Regarding AFT Ecotourism and Local Ecotourism Development 3.3.1 Key Informant Interviews 14 17 22 25 34 41 41 41 44 48 49 50 52 54 57 59 62 62 ii CHAPTER FOUR: Results 4.1 The Economic Benefit of AFT Ecotourism 4.1.1 Trail Counter 4.1.2 On-Site Questionnaire 4.1.3 Direct Tourism Expenditure Research 4.1.4 Annual Economic Benefit o f AFT Ecotourism 4.2 The Role o f Ecotourism Within the Context o f Local Economic Diversification 4.2.1 Trade Area 4.2.2 Shift Share Analysis 4.2.3 Location Quotient A nalysis 4.2.4 Income Dependencies 4.2.5 Growth Share Matrix 4.3 Local Knowledge Regarding AFT Ecotourism and Local Ecotourism Development 4.3.1 Key Informant Interviews 67 67 67 72 81 81 CHAPTER FIVE: Discussion 5.1 Limitations of the Research Design 115 123 CHAPTER SIX: Conclusion 6.1 Ecotourism as an Economic Priority 6.2 Future Research 125 128 131 References 134 83 83 87 93 99 102 107 107 Appendix A: Ancient Forest Trail Questionnaire 143 Appendix B: Key Informant Interview 145 Appendix C: Key Informant Interview Consent Form 148 iii List of Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Table 21: Table 22: Diversity Index and Forest Vulnerability in McBride-Valemount Region 1996-2006 Average Daily Expenditure Figures in Robson Valley Region List of Anonymous Key Informants and Corresponding Affiliations Daily Expenditure Estimations AFT Annual Direct Economic Benefit Annual Economic Benefit Calculations Prince George Trade Area Calculation Valemount Trade Area Calculation Local Economy Population National Growth Component by Industry and Region (2006) Industrial Mix Component by Industry and Region (2006) Competitive Share by Industry and Region (2006) Employment Figures 2006 2006 Location Quotients McBride Location Quotients Fraser Fort-George Location Quotients British Columbia Location Quotients Income Dependency by Industry and Region (2006) Income Dependency Change 2001-2006: Forestry Income Dependency Change 2001-2006: Tourism 2006 Employment Data for the Growth Share Matrix Key Informant Interview Themes 38 49 63 81 82 82 83 84 87 88 89 90 92 94 97 98 98 100 101 102 103 107 List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: North America, British Columbia, and McBride Regional Districts of B.C. - Fraser-Fort George #13 Regional District o f Fraser-Fort George Electoral Areas, with AFT and McBride Employment by Industry in Central and Northern B.C. Ecotourism versus Tourism Growth, 1997-2004 Regional Diversity in British Columbia Forest Sector Vulnerability in British Columbia Dependence on Tourism in British Columbia McBride Income Dependencies 1991-2006 5 5 5 30 31 34 35 36 37 iv Ancient Forest Trail Map 2012 Hiking Season Monthly Visitation at the AFT AFT Visitation 2008-2012 Regression Model: May 19 - July 15 Regression Model: September 1 - October 8 Complete 2012 AFT Hiking Season Completed Questionnaires by Hiker Profile, 2012 Hiking Season Total Trail Usage by Section Route Hiked by Hiker Profile Frequency o f AFT Visitation AFT Hiker Profile Hiker Profile at the AFT by Month Point o f AFT Awareness AFT Awareness by Hiker Profile Additional Time in AFT Region Average Daily Expenditures by Tourists Using the Trail Additional Time Recommended By Trail Users Post-trail Destination of AFT Users Group Size of AFT Users Age of AFT users McBride Trade Area Close Up McBride Trade Area and Surrounding Communities Local Economy Percent Income Dependencies 2006 2006 McBride Area Growth Share Matrix 43 68 68 69 70 71 72 73 73 74 75 75 76 77 78 78 79 79 80 80 84 85 86 100 104 ACKNOWLEDGEMENTS Pursuing a thesis is not an individual journey. This feat would not have been accomplished without the support of my friends and family. Foremost, my partner in crime, Jessie - there is never a wasted moment with you. Thank you for making me believe I could do this. Thank you to my mom, dad, and sister, for being only a phone call away, and encouraging me endlessly. Without an amazing roommate (Heather), business partner (Reza), and office pal (Eric), my stresses would have never been relieved - thank you for being there guys, right up until the end. To my supervisor, Dave, thank you for recognizing my potential, and providing steadfast guidance throughout the entire project. Committee members, Darwyn and John, thank you for being great sources o f insight and improvement, and helping greatly in shaping my final product. Thank you to friends that lent their expertise to enrich this work. Les, your knowledge of rural economics and skill on the squash court all contributed to this experience. And Michael Hamilton, thank you for crunching the numbers with me - I was able to tell a better story with your help. I am grateful to have made friends with wonderful personalities in the inland rainforest. Among those, Nowell Senior - thank you for the countless hours you spent on the road with me to and from the trail, and for your vision and leadership in making the AFT accessible to thousands of people from far and wide. Thank you Hugh and Kathy for being our friends, trusting us, playing with us, housing us - enhancing our experience in the north. I would like to thank the administrative staff at UNBC for adding a genuine and personable touch to each step of this journey. And finally, thank you to the Caledonia Ramblers for volunteering their time over the past eight years building, maintaining, and expanding the Ancient Forest Trail for the benefit o f others. Chapter 1 INTRODUCTION Peripheral regions are typically characterized by economies that are geographically isolated, have poor access to and from markets, and have overdependence on singular industries (Nepal, 2008). Historically, economic prosperity in the peripheral regions throughout Canada has been strongly linked to the notion of resource dependency (Home and Penner, 1992). The natural resource is captured (e.g., through mining, forestry, agriculture, fishing, etc.), local employment rises, income enters the local economy, and, depending on market conditions, economic stability can be achieved (Korber, 1997). This is known as the economic-base approach to local development (Davis and Hurron, 1992). Although the economic-base approach can produce significant wealth by creating a commercially successful export/manufacturing industry, it can also create an inherent weakness in the foundations o f local economies by increasing vulnerability to external market fluctuations (Cox and Mair, 1988; Douglas, 1994). The recent economic turmoil in some o f British Columbia’s resource-dependent peripheral regions, including McBride, suggests the need for more stability in volatile economic times (Opinion 250, January 2012; McBride B.C. Economic Development Action Plan, 2010; Valley Sentential, January 2012). When considering the structure o f a resource dependent community, researchers typically associate a diverse local economy with a more stable and resilient local economy (Davis and Hurron, 1992; Brown, Hall and Hall, 2000; Nepal, 2008). Economic diversification refers to the process by which an economy becomes less dependent on specific industries by expanding the diversity o f its economic outputs and is often a potential solution for peripheral economies, especially 1 those dependent on extractive resource industries such as forestry or mining (Brown, Hall and Hall, 2000; Nepal, 2008; Randall and Ironside, 1996; Halseth, 2009). An important challenge to policy makers in many peripheral communities with abundant natural resources is to find ways to reduce their dependence on these resources through successful diversification of economic activity (Williamson and Annomraju, 1996; Gylfason, 2001). Increasingly, tourism and ecotourism are being recognized as important factors for regional economic development and diversification around the world, most notably in peripheral regions (Douglas and Harpman, 1995; Wunder, 1999; InterVISTA, 2008; Home, 2009; Council of Ecotourism Associations [COTA], 2007; Halseth, 2009; Job, 2008, Robson-Canoe Valleys Economic Opportunities Plan, 2010; Sinclair, 1998; Robson Valley Land and Resource Management Pan, 1999). Considered an important aspect of the B.C. government’s “heartland strategy”, which attempts to revitalize the dwindling economies of northern B.C. communities, ecotourism development has been identified as a primary option for economic diversification in Northern B.C. as it is believed to promote conservation, have little or no visitor impact, involve the local population in the tourism economy, and generate economic benefits for the local economy (Nepal, 2008; B.C. Resort Task Force, 2004). 1.1 Site Description The Robson Valley is a region situated between the Canadian Rockies and the Cariboo Mountains in the Robson Valley of Northern B.C. Resting within the Inland Temperate Rainforest (ITR), the towns and communities of the Robson Valley have and 2 continue to depend heavily on forestry and forestry-related manufacturing as the primary sectors within the regional economy. The majority of the labour force activity in the region is concentrated in the manufacturing of forest-based products (Home, 2009; Stevenson et al., 2011). However, since the discovery o f the ecological significance of the ITR in the mid 1990s, there has been increased pressure to alter harvesting practices, a development that has adversely affected the available timber supply in the region and on the economy in general (TSR, 2011; Stevenson et al., 2011). Compounded by the general decline of the forestry industry, it is apparent that the regional economy is in a period of change. Now, more than ever, there exists a need for economic development as well as economic diversification within the regional economy o f the Robson Valley (Home, 2009; Hayter, 2000; Williston and Keller, 1997; Hammer and Siegrist, 2008). The village o f McBride (CSD 5753012), population 586, is one o f many communities located within the Robson Valley in northern B.C. (Statistics Canada, 2011) (see Figure 1). Situated in the Fraser-Fort George (FFG) regional district (see Figure 2), McBride is located 208km southeast o f Prince George, the largest city in Northern B.C. Within the FFG regional district are six sub-regions; McBride, along with the Ancient Forest Trail (AFT), is situated in Electoral Area H o f the FFG regional district (see Figure 3). The village of McBride was chosen for this study for several of reasons. McBride has a unique relation with the AFT, as it is the closest town located within the same subregion of Electoral Area H. This proximity to the trail suggests that tourism activity at the site has the potential to positively benefit the McBride economy. McBride is also uniquely positioned in close proximity to Jasper, Alberta, a well-known tourism 3 destination, and is situated on Highway 16, a route heavily used by tourists driving into Northern B.C. By virtue of being located in the Robson Valley, McBride is well situated to benefit from the natural resources present in the valley, most notably the natural landscape, including ancient cedar trees, as seen at the AFT site. Recognizing these elements, as well as the need to diversify their economy, the Village o f McBride has identified both economic diversification and local tourism as being focus areas for future economic development (The Robson Valley Land and Resource Management Plan, 1999; Stamm, 2004; Valley Sentential, 2012; Opinion 250, 2012). For the purpose of this study, the definition and boundary of the local economy was derived from a combination of trade area analysis, an understanding of local geography, and the location of significant communities along Highway 16 (see Section 4.2.1). Using these tools, the local economy encompasses the Village o f McBride and the small localities of Dome Creek and Crescent Spur (see Section 4.2.1). While Dome Creek and Crescent Spur are of importance when considering the benefit of tourism and AFT ecotourism in the region, the primary focus o f this study (specifically the process of economic diversification) is on the Village o f McBride, which has a larger population, has a more significant impact on the region as an economic contributor, has available statistical data (population, labour force, etc.), and has identified diversification as an economic priority. 4 Figure 1: North America, British Columba, and McBride Figure 2: Regional Districts of B.C. - Fraser-Fort George #13 Source: Theo Mlvnowski. MSc ,\R E S Candidate UNBC, 2011 Source: Regional Districts, B.C. Stats, 2009 Figure 3: Regional District of Fraser-Fort George Electoral Areas, with AFT and McBride Source: Regional District of Fraser-Fort George, 2010 5 1.2 Ancient Forest Interpretive Trail In 2005, the Caledonia Ramblers, an outdoor recreation group based in Prince George, B.C., submitted an application to the Ministry of Forests to build a hiking trail as a means to create more accessible year-round hiking in the Driscoll Ridge area (Ancient Cedar Website, 2011). During the consultation process, a second outdoor group, the Prince George Naturalists Club, had showed interest in constructing an additional interpretive hiking trail, providing hikers with a chance to learn about the regional flora and fauna. With the help of the Dome Creek Forest Information Committee, a conservation/outdoor group located in Dome Creek, the closest community to the Driscoll Ridge area, a section o f old-growth forest with exceptionally large and extraordinarily old western cedars was identified and suggested for the interpretive trail (Stevenson et al., 2011). In June 2006, permission was granted from the Ministry of Forests to build the trails, and on September 24,2006, both the Driscoll Ridge Trail and the Ancient Forest Interpretive Trail (AFT) were officially opened. Since 2006, the AFT has served to raise the level o f awareness that regional residents possess regarding the inland rainforest and, in particular, the old-growth cedar trees (Stevenson et al., 2011). Importantly, the trail has also grown in popularity as a tourist attraction (Connell, Shapiro, and Hall, 2011). This increase in tourist activity is significant as growing levels of tourist activity suggest a potential for local economic diversification as visiting tourists contribute to the local economy through direct expenditures and induced benefits (Stevenson et al., 2011). However, the economic benefit of visiting tourists and the potential role that ecotourism might play within the local economy are unknown. As an emerging tourist attraction, the AFT represents a unique 6 opportunity to study the connections inherent in ecotourism, economic development, and economic diversification in the Robson Valley. 1.3 Research Questions and Objectives This project has implications for future research and development decisions concerning the economic diversification of peripheral regions that rely on single-industry sectors to drive the local economy. Research shows that tourism and ecotourism, which typically make alternative use of the natural resources and landscapes common to many peripheral regions, can play an important role in the diversification process (Budowski, 1976; Douglas and Harpman, 1995; Wunder, 1999; InterVISTA, 2008). While tourism is limited in its ability to affect the diversification process, sites like the AFT demonstrate the potential benefits associated with a growing tourism industry and serve well to highlight the economic significance that tourism industries can have on the development and diversification of local economies. The purpose of this research is to assess the potential contribution o f Ancient Forest Trail (AFT) ecotourism to the diversification of the economy of the Village of McBride. A case study method is used to achieve two objectives. The first objective is to calculate the annual economic benefit o f AFT ecotourism. This objective was accomplished by combining data from trailhead questionnaires and a heat-sensing trail counter to determine average tourist daily expenditures. The second objective is to examine AFT ecotourism in the context of local economic diversification. The potential contribution of AFT ecotourism to economic diversification was examined by analyzing the structure and dynamics o f the local McBride economy. AFT economic impact data and economic analyses, including location quotients and shift-share analysis, were used 7 in order to assess the AFT’s potential contribution. Finally, key informant interviews were conducted to address community knowledge regarding ecotourism-induced economic opportunities and the future o f ecotourism with regard to economic diversification. Key informant respondents included local outdoor groups, tourism operators, government tourism organizations, local forest district representatives, regional recreation officers, economic development officers, the McBride chamber o f commerce, timber supply analysts, and local mill operators. 1.4 Chapter Preview Chapter 2 Literature Review provides background and context for this research project and is divided into five sections. The first section summarizes evolving ecotourism and tourism definitions and how these definitions can be applied to this research project. The second section reviews the methodological issues associated with measuring various tourism related economic benefits, the structure and dynamics o f a local economy, and interview practices. Lastly, a review o f economic diversification within resource dependent communities provides the necessary context to assess the current situation in McBride. Chapter 3 outlines the study design and methods chosen to answer the research questions. Chapter 4 summarizes the results of the AFT economic benefit calculations, the economic analyses o f the local economy, and the key informant interviews. Chapter 5 uses the data collected from these methods to interpret the findings and discuss the significant and broader implications of the results, including limitations. Chapter 6 summarizes the study, examines ecotourism as an economic priority, and suggests areas for future research. 8 Chapter 2: LITERATURE REVIEW The purpose of this literature review is to provide context for this study by outlining the literature on ecotourism and economic development research. The review covers tourism, ecotourism, and tourist definitions, the methods used to describe the structure and dynamics of a local economy as well tourism-specific economic impact analysis. Lastly, a review of the literature surrounding resource dependent communities and the role that tourism can play within the diversification process is outlined. 2.1 Defining Tourism, Ecotourism and Tourists The ecotourism industry is at the center of this research and a clear understanding of ecotourism, as differentiated from tourism, is important when assessing the economic benefit of ecotourism activity at the AFT. Over the past few decades, the definition of ecotourism has had multiple meanings and uses. In an attempt to synthesize the many existing definitions, Fennell (2001) compiled eighty-five definitions of ecotourism and identified five dominant themes: natural setting, conservation, culture, local benefits, and education. In a content analysis o f thirty definitions, Donohoe and Needham (2006) found the same top two themes, nature and conservation, and similar secondary themes. According to Weaver and Lawton (2007), ecotourism should satisfy three core criteria: ecotourism destinations should (1) feature the natural environment as a central attraction, (2) offer the prospect of learning or education, and (3) at least intend to be sustainable environmentally, culturally, and economically (Weaver and Lawton, 2007). This 9 definition does well to incorporate the key components as determined by Fennell (2001) and Donohoe and Needham (2006), including a natural setting, education, conservation, culture, and economic benefits for the local region. Tourism activity at the Ancient Forest Trail satisfies these three core criteria: (1) the predominant feature and primary draw of the trail is the natural environment, specifically the ancient cedar trees; (2) as an Interpretive Site, the trail contains frequent signage along the path offering hikers an opportunity to learn about the flora and fauna of the Inland Temperate Rainforest; (3) the AFT represents a conscious effort by concerned local citizens to conserve what they perceive to be a valuable part of their local environment. The definition o f a ‘tourist’ is also important, as classifying AFT trail users is a step in calculating the economic benefit o f AFT ecotourism. Within the tourism literature, authors present varying definitions o f a tourist depending largely on the social, political, and economic context of their study (Gee, Makens, and Choy, 1997; McIntosh, Goeldner, and Ritchie, 1995; Mill and Morrison, 1997; Nickerson, 1996; Ryan, 1991). Working within an economic context, Leiper (1979) became the first author to propose a definition of a tourist based on three dimensions: tourists, three geographical elements (generating region, transit route, and destination region), and a tourist industry. Later, Smith (1988), working in a supply-side economic context, offered a definition that focused on leisure activities away from the home environment, which introduced the idea of distance traveled as a feature in the definition o f a tourist. In 1994, the World Tourism Organization (WTO) first introduced a definition aimed at encompassing all potential contexts. Combining Leiper’s concept of geographical elements and Smith’s concept o f activities away from the home environment, the WTO introduced the concept of the 10 ‘usual environment’. It was proposed that “persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business, and other purposes,” would fall under the classification of a tourist (B.C. Statistics, 2009; WTO, 2011). Despite the varying definitions o f ‘usual environment’ provided in the literature, the World Tourism Organization does not specify how the concept should be operationalized. Instead, statistical agencies are free to decide how this concept should be defined within their own social, political, and economic context (Smith, 1999). Influenced by several papers, such as Rogers (2002a; 2002b), the discussion on the definition of ‘usual environment’ has since been brought to an international level. Following these discussions, Govers, Hecke, and Cabus (2008) summarize two dimensions of the concept of ‘usual environment’: distance (or the crossing of administrative boundaries) and definitions of places where people perform routine activities (home, work, study, shop, etc.). Ecotourism definitions and tourist definitions are important elements with regard to this study as they lie at the center o f the economic analysis used to measure tourism related economic impacts. Following the components outlined by Fennell (2001), Lawton (2007), and Donohoe and Needham (2006), this study defines tourism at the AFT as ecotourism. Additionally, this study defines tourists (as differentiated from recreational day-tripper and commuters) based on the World Tourism Organization definition, which is rooted in the concept of ‘usual environment’ (WTO, 1999). Following guidelines set forth by Govers, Hecke, and Cabus (2008), this study defines the concept of ‘usual environment’ based on the geographic location where people perform routine or usual 11 activities. Individuals travelling outside their environment o f ‘usual activities’ constitute them as a ‘tourist’. 2.2 Methodological Issues 2.2.1 Economic Impact Analysis The general aim of an economic impact analysis is to provide decision makers (economic development officers, community planners, government officials, etc.) with useful information regarding the state o f the local economy to make decisions regarding economic development (Cities Alliance, 2007). Importantly, if the economic value o f a particular project or development is to be properly assessed, one must understand the structure and dynamics of the local economy (Hustedde, Shaffer, and Pulver, 2005). Economic impact studies are based largely on conditional predictive models o f economic analysis that produce “if.. .then” statements in order to help determine the impacts that future scenarios may generate (Davis, 1990). Ultimately, economic impact studies are designed to estimate the quantitative effects or changes in the local economy that result from a stimulus, either positive or negative (Davis, 1990). Economic base analyses and income-expenditure analyses are two types of economic methods designed to estimate the amount of induced economic activity associated with a new or expanded activity within the local economy (Davis, 1990). The economic base analysis, a method employed in regional economic analysis, is a structurally simple model that determines short-term economic impacts on small-scale, single-export economies by dividing economic sectors into basic (firms that serve markets outside the region, i.e. exports) and non-basic (firms that serve markets inside the region, i.e. non-exports) 12 sectors (Davis, 1990; Goeldner and Brent-Ritchie, 2006). Once basic employment is identified, the outlook for basic employment is investigated sector by sector and projections made sector by sector. In turn, this permits the projection of total employment in the region. Economic base theory asserts that the means of strengthening and growing the local economy is to develop and enhance the basic sector (Davis, 1990). The basic sector is therefore identified as the driver o f the local economy. Like economic base analysis, the income-expenditure analysis, a method designed to reflect increases in income in service sectors as a result of rising productivity in export sectors, is most appropriately applied to regional economies (Davis, 1990). The primary limitation of these two analyses is the predominance given to the export industry as the primary driver of the economy. While the export o f goods can generate an economic injection into the local economy that in turn helps induce local spending and creates a foundation for a local economy to grow (Fletcher, 1991), an over dependence on export industries can make the local economy vulnerable to fluctuations in external markets (Cox and Mair, 1988: Home, 2009). If the local economy is more diversified, relying on both export and import sectors, money injected into the community can more easily circulate within the community, increasing employment and income (Douglas, 1994). The total economic impact o f a tourism activity is the sum of the direct, indirect, and induced effects within a local economy (Goeldner and Brent-Ritchie, 2006). Direct effects refer to the changes in production associated with the immediate effect of changes in tourism expenditures (Crompton, 1993; Frechtling, 1994; Richardson, 1972). For example, if an increased number o f tourists stay overnight at a hotel, a direct economic effect may be associated with additional hotel sales and increased hotel wages and 13 salaries. Indirect effects refer to the changes in production that result from various rounds o f re-spending in other backward-linked industries (Crompton, 1993; Frechtling, 1994; Richardson, 1972). If the business that provides supplies to the hotel saw a related increase in productivity, this would be considered an indirect effect. Lastly, induced effects refer to the changes in economic activity associated with household spending of income earned directly or indirectly as a result o f tourism activity (Crompton, 1993; Frechtling, 1994; Richardson, 1972; Goeldner and Brent-Ritchie, 2006). 2.2.2 Measuring Structure and Dynamics o f a Local Economy What follows is a review of the analytical tools available to describe a local economy, which in turn can be used to better assess the potential role that any given industry or economic stimulus might play within the local economy (Hustedde et al., 2005; Wagner, 1997). The general purpose of these analytical tools is to address the size, shape, and composition of the local economy; economic trends, past, present, and future; opportunities for growth; sectors that a community should target for attraction; the kinds of goods and services similar communities support in order to determine potential gaps in the local trade service sector; and the proportion o f total local business that comes from local residents and what proportions come from the surrounding market areas (Shaffer, Deller, and Marcouiller, 2004). Because the use o f any analytical tool in isolation can lead to erroneous conclusions, a variety of tools should be employed to gain a clearer understanding o f a local economy. Only by using a range of descriptive tools can the local economy be better understood in its complexity (Shaffer, et al., 2004; Hustedde, Shaffer, and Pulver, 14 2005; Cities Alliance, 2007). Focusing only on those analytical tools that have direct relevance to policymakers and community developers, Shaffer (2004) recommends using a specific combination of descriptive tools, including trade area analysis, shift-share analysis, location quotients, income dependencies, and a growth share matrix in order to properly describe the structure and dynamics of a local economy. Determining a community’s trade area, the geographic location from which the community draws the majority of its retail trade customers, is an important part o f an analysis. Although trade areas usually extend beyond municipal boundaries, the general criterion is that the majority of trade area residents shop in the community (Hustedde et al., 2005; Cities Alliance, 2007). The next step is to use census data to gain further insight about the population, income level, age, and other demographic data in the trade area. These figures can be found in the census o f population for each township, village, and city located within the trade area, all o f which can be used to estimate the market potential for the community (Darling, 1999; Cities Alliance, 2007). Shift-share analysis is a method that aims to measure the movement o f the local economy into either faster or slower growth sectors, the ‘shift’ o f the regional economy. This analysis also measures a particular community’s portion of the growth occurring in a given sector, the ‘share’ element (Hustedde et al., 2005; Cities Alliance, 2007). The first step in this analysis is to calculate the national growth component, which measures the potential change in local employment assuming the local economy is similar to the national economy. The second step is to calculate the industrial mix component by multiplying the local employment in each economic sector by the difference in the national growth rate for that sector and the growth rate for the whole economy (Shields, 15 2003). Assuming the regional economy is similar to the national or provincial economy, this analysis is useful for showing the number of new jobs that were created locally due to national economic trends. This method can help provide insight into the growth prospects o f particular key industries, or industries of interest to the particular study. Location quotient analysis is another procedure that helps to describe the structure and dynamics of a regional economy. Location quotients identify the level at which a local economy is producing more than is needed for its own direct needs, surplus that is then sold to non-regional markets (Chapin, 2004). It also serves to highlight businesses and industries that are not accommodating the local needs and are subsequently a source of consumption leakage. Working on the assumption that the national economy is selfsufficient, the local economy is compared against that standard o f self-sufficiency. Relatively low economic activity in a particular industry might suggest the service is being imported from other communities. The location quotient for a particular site can be compared to regional and provincial figures, highlighting any differences in the structure of the economies being compared (Hustedde et al., 2005; Cities Alliance, 2007). Lastly, the use of income dependencies can be another valuable technique used to highlight the primary industries within a regional economy as measured by income levels. Income dependencies are calculated by looking at the basic and non-basic sectors o f the economy and by examining at the sources o f income within a specific economy as they relate to specific basic and non-basic industries (Home, 2009). Income dependencies have the potential to provide insight into the primary industries o f the local economy, which in turn may highlight which industries support the local economy (Home, 2009). 16 2.2.3 Tourism Related Economic Impact Analysis Due in part to growth of tourism and ecotourism, communities may be interested in determining the economic impact o f an increased tourism sector within the local economy (Wagner, 1997; Stynes, 2006; Job, 2008; COTA, 2007; Sebele, 2010). When considering the impact of ecotourism within resource dependent communities, a combination of economic analyses and interview data can be employed to measure both the economic benefit of ecotourism and the local understanding o f ecotourism potential. These methods provide researchers with a comprehensive understanding o f ecotourism’s potential to positively impact the local economy (Crompton, 1993; Frechtling, 1994; Shaffer, Deller, and Marcouiller, 2004; Stynes, 2006). The economic impacts of tourism are typically estimated by some variation of the following formula (Crompton, 1993): Economic Impact o f Tourism = Number o f Tourists * Average Spending per Visitor * Multiplier This formula requires three distinct steps and corresponding measurements or models (Stynes, 2006): 1) Estimating the change in the number and types of tourists to the region due to the proposed policy or action. a) Economic impact estimates rest heavily on good estimates o f the numbers and types of visitors. These must come from carefully designed measurements o f tourist activity, a good demand model, or good judgment. This step is often the weakest link in most tourism impact studies, as few regions have accurate counts o f tourists. 17 2) Estimate average levels of spending o f tourists in the local area. a) Spending averages come from sample questionnaires or are sometimes borrowed or adapted from other studies. Multiplying the number o f tourists by the average spending per visitor gives an estimate of total tourists spending in the area. Use and spending estimates are two o f the most important parts of an economic impact assessment. When combined, they capture the amount of money brought into the region by tourists. 3) Apply the change in spending to a regional economic model or set o f multipliers to determine secondary effects. a) Multipliers generally come from an economic base or input-output model of the local economy. In many cases multipliers are borrowed or adjusted from published multipliers or other studies. Stynes (2006) offers three recommendations when conducting an economic impact analysis o f tourism. First, he stresses the importance of obtaining a reliable estimate of the number o f tourists included in the analysis. This requires clearly defining what one wishes to include as ‘tourism’ and the region of interest. Second, he suggests dividing tourists into distinct subgroups with distinct spending patterns. In particular, local visitors should be distinguished from visitors from outside the region, as well as between day users and overnight visitors. Last, Stynes suggests a focus on direct economic effects, especially when considering tourism impacts. He cautions that multiplier affects are not nearly as important in most cases as their use in tourism literature might suggest, and that multipliers tend to introduce complexities that most users of the results do not fully understand. 18 When attempting to determine the economic benefit o f tourism at two national parks in Germany, Job (2008) used an economic impact analysis that focused on the primary variables outlined above. Like Stynes (2006), Job posits that the economic value of tourism is primarily comprised o f two variables: a) the total number of visitors and, b) the average daily expenditures spent during the stay. Working with these two variables, Job was able to demonstrate a correlation between tourist visits and a positive economic benefit. Importantly, Job concludes by acknowledging the potential benefit o f the tourism industry to aid structurally laggard regions, specifically in peripheral locations where other economic activities are underdeveloped. The methods used in Job’s (2008) study serve well to demonstrate the positive economic benefits provided by tourism. As noted in the literature (Stynes, 2006; Crompton, 1993), few regions are able to obtain accurate counts of tourists, let alone models for predicting changes in tourism activity or separating local visitors from visitors from outside the region. Because o f the relatively small scale of the AFT, this research was able to accurately estimate the number of tourists and, through the use of on-site surveys (Stronza, 2008; Zamoch, 2011), was able to accurately distinguish tourists from local residents. Within the tourism literature, random systematic sampling is often used to select a sample population for the purpose o f conducting on-site surveys, specifically when the goal is to obtain attitudes and opinions and to apply them to a larger population (Sinclair, 1998; Cooper et al., 1998). Systematic random sampling is a method of sampling in which individuals are selected from a list by choosing every ‘k’th sample frame member, where k represents the population size divided by the desired sample size (Cooper et al., 1998). Because most research projects are unable to interview all daily trail users, a 19 random systematic sampling is used, providing researchers with a relatively unbiased method for selecting participants in their survey (Chen et al., 2004; Bowker, Bergstrom, and Gill, 2007; Gill, 2001). Random sampling, however, can be vulnerable to sampling error as the randomness of the selection may result in a sample that doesn’t reflect the makeup o f the population. Systematic and stratified techniques attempt to overcome this problem by using information about the population to choose a more representative sample, which involves the division of a population into smaller groups, known as strata (Sinclair, 1998; Cooper et al., 1998; Babbie, 2011). Once a strata is formed, based on members’ shared attributes, a random sample is then taken from each stratum, a number proportional to the size o f the strata compared to the total population. One advantage o f stratified sampling is that it can reduce sampling error by ensuring that all relevant portions of the population are included in the sample. Stratified sampling (Stronza, 2008) has been shown to be an effective method of gaining a broad representation of a particular sample when studying the economic impact of ecotourism. When examining a single site, a stratified sample of the days contained within a particular tourist-related season (Zamoch, 2011) allows for specific strata within the sample to be identified and subsequently divided and sampled. The division o f seasonal days into weekend and weekday strata (Pollock et al, 2011) allows researches to further distinguish between local participants and tourists. Once the classification of trail users into local residents and tourists is complete, the data is combined with an overall count of all trail users to calculate the total number of visiting tourists. The installation o f an electronic trail counter in order to monitor 20 visitor use (Jacobi, 2003), a number representing the amount o f traffic at the site can be obtained for each day of each strata within the hiking season. Validation o f the count consists o f observing traffic at the counter site and recording the actual traffic and the counter-recorded traffic. Once the number of tourists is known, the average spending per visitor is needed in order to calculate the direct economic impact. A comprehensive review o f previous direct tourism expenditure literature for the region is one available method for determining average daily expenditures (Sinclair, 1998; Cooper et al., 1998). The aim of such a literature review would be to determine the average daily direct expenditure made by an individual tourist while staying within the region by taking the average from all the available studies. This figure could then be applied accordingly, depending on the results of the final variable of time spent in the region to determine direct tourism impacts (Sinclair, 1998; Cooper etal., 1998). Based on these approaches (Stynes, 2006; Job, 2008; Pollock et al, 2011; Zamoch, 2011; Jacobi, 2003; Cooper et al., 1998) and previous research conducted at the AFT, this project used a stratified systematic sample of the days contained within the summer, dividing the days into weekday and weekend strata to create non-random sample populations for conducting on-site surveys. These data were combined with data from an on-site electronic trail counter and the results from direct tourism expenditure literature. The details of the methods are discussed in Chapter 3. The above mentioned methods, as outlined by the tourism economic impact literature, have strong implications for the type o f methods chosen by this study. Like Bowker, Bergstrom, and Gill (2007), the primary data for the research comes from on­ 21 site questionnaires and trail counts. As demonstrated by Stynes (2006), determining the economic impact of AFT tourism revolves around calculating a reliable estimate o f the number o f tourists, the division o f trail users into distinct subgroups, and a focus on direct economic effects. When focusing on the economic valuation of AFT ecotourism and the description o f the structure and dynamics o f the local McBride economy, this study used the specific combination of descriptive tools as outlined by Shaffer (2004), including trade area analysis, shift-share analysis, location quotients, and income dependencies, in order to properly describe the structure and dynamics of the local economy. 2.2.4 Tourism Related Interview Literature Although economic impact analyses are capable o f providing detailed assessments of the economic contribution of a given stimulus, when used in isolation they do not account for the knowledge and expertise o f key members of a given community (Cities Alliance, 2007; Hustedde et al., 2005; Shaffer, Deller, and Marcouiller, 2004). Often, in order to assess the economic benefit of a stimulus, a mixed methods approach is adopted (Kvale, 1996; Stem et al., 2002; Patton, 1990; Guba and Lincoln, 1989). Interviews, questionnaires, and surveys are examples of methods used by researchers trying to gain either a deeper or a supplementary perspective on the ability o f a stimulus, like ecotourism, to affect a local economy (Nepal, 2008; Kvale, 1996; Stem et al., 2002; Patton, 1990; Guba and Lincoln, 1989). What follows is a review of common interview methods used in the literature to assess the economic impact o f tourism. Unlike a survey or a questionnaire, an interview is an interaction between an interviewer and a respondent in which the interviewer has a general plan o f inquiry, 22 including topics to be covered, but not a set of questions that must be asked with particular words and in a particular order (Babbie, 2011). Kvale (1996) details seven stages in the complete interviewing process: 1. Thematizing: clarifying the purpose of the interview and the concepts to be explored. 2. Designing: laying out the process through which you’ll accomplish your purpose, including a consideration o f the ethical dimension. 3. Interviewing: doing the actual interviews. 4. Transcribing: creating a written text of the interviews. 5. Analyzing: determining the meaning o f gathered materials in relation to the purpose of the study. 6. Verifying: checking the reliability and validity of the materials. 7. Reporting: telling others what you’ve learned. Drawing upon key strategies discussed by Patton (1990) and Guba and Lincoln (1989), semi-structured interviews are used in tourism literature to gather information on a variety o f tourism-related activity, including park management activities, community perceptions of parks and tourism, levels o f tourism spending, and changes in tourism projects over time (Nepal, 2008; Stem et al., 2002; Sebele, 2010; Almeyda et al., 2010). When conducting research on community-based tourism, semi-structured interviews are able to yield insights into the nature of community participation in ecotourism activities, including park management activities, community perceptions of parks and tourism, levels of tourism spending, and changes in tourism projects over time (Stone and Wall, 2003; Weinberg et al., 2002; Sebele, 2010; Almeyda et al., 2010). 23 Another strength of the semi-structured interview method lies in the use of probing questions, which researchers use to pursue topics raised by participants and paraphrase what participants say in order to verify or correct their interpretations. Key informants, community members specifically chosen for participation based on their personal and professional knowledge regarding the topic of study, are often selected when conducting interviews aimed at assessing the benefits and challenges of local tourism in resource dependent communities (Sebele, 2010; Babbie, 2011). While key informants do not represent a whole community, identifying key decision-makers can provide insight into the perceptions and ideas of key individuals as their experiences relate to the social, economic, and environmental impacts o f tourism (Weinberg et al., 2002; Almeyda et al., 2010; Sebele, 2010). One challenge in the process of conducting interviews is to make sense o f data gained through participant responses. This process involves sifting through the data, filtering out the significant information, identifying patterns, and constructing a framework for communicating the essence o f what is revealed. While the goal of qualitative analysis is the transformation o f data into findings, a formula to guide that transformation does not exist (Patton, 2002). Software that assists in the analysis of qualitative data is referred to as Computer-Assisted Qualitative Data Analysis Software (CAQDAS) (Patton, 2002). Coding is essential in qualitative analysis (Fielding, 1994; Kelle, 1997; Patton, 2002). This process usually begins when the researcher identifies major themes and the sections of text in which those themes reside. Each o f the identified regions is marked with a relevant code (Kelle, 1997). In the software, these codes are stored along with the location, or address, of the appropriate passage of text so that the 24 researcher can locate all the information associated with a certain topic. Drawing upon key strategies discussed by authors Patton (1990), Guba and Lincoln (1989), Cropton (1993), Stynes (2006), and Job (2008), this research used a mixedmethods approach. First, primary data (number o f trail users and profile o f trail users) regarding the AFT (ecotourism site) was gathered. Secondly, further primary data were collected through key informant interviews. Like Sebele (2010), Moyer, Duinker, and Cohen (2010), Almeyda et al., (2010), and Weinberg et al, (2002), key informant interviews were chosen in order provide insight into the knowledge and perceptions of key individuals as their experiences relate to local ecotourism and economic diversification. Although Sebele recognized the inability of informant responses to represent the community as a weakness of this method, he cites key informant interviews as being one of the best methods to use when conducting research aimed at providing insight into the perception and ideas o f known experts (2010). This research also makes use o f NVivo software to analyze the data gained from key informant interviews. 2.3 Economic Diversification and Tourism in Resource Dependent Communities One of the more pressing challenges for policy makers, economic development officers, and natural resource managers in the early 21st century is the declining socioeconomic health of rural communities (Hibbard and Lurie, 2012). In 1950, the world’s population in developed countries was evenly divided between urban and rural dwellers. However, the estimate for 2007 was 75% urban and 25% rural, demonstrating a marked change in the structure of rural and urban communities (United Nations, 2007). 25 The decline of rural populations around the world has been accompanied by relative socioeconomic decline (Nelson, 2001). Through much of the 20th century rural communities were economically tied to the production of agriculture, forestry, and other natural resources. However, the rise to dominance of commodity production - the industrialized approach to agriculture and natural resource management including specialization, standardization, and consolidation in pursuit of increased efficiency - has transformed the rural economy, often times removing or diminishing the single industry that has historically supported the local economy (Fisher, 2001; Hibbard and Lurie, 2012). Similar rural economic transformations were experienced throughout Canada, a geographically large nation with a multitude o f rural communities (Brown and Hall, 2000; Nelson, 2001). Canada is recognized as a wealthy nation when considering the economic relationships and conditions of the global economy (Hayter, 2000). As Canada’s second highest exporter of nature resource products, British Columbia is considered to be a relatively wealthy province. With a staples-based economy, B.C. has seen tremendous wealth and the development of well-diversified metropolitan regions (Brown and Hall, 2000). However, the peripheral regions of B.C., characterized by resource dependent economies, continue to have a strong influence on the overall performance of the provincial economy (Nepal, 2008). The recent economic turmoil in some of B.C.’s peripheral regions could suggest the need for a more diversified economic base, providing more stability in volatile economic times (Home, 2009; Randall and Ironside, 1996). 26 Traditionally, the economic measure of community stability in the peripheral regions of B.C. has been linked to the notion of timber dependency. Trees are harvested, employment rises, income enters the local economy, and stability is achieved. If the supply of timber and the number of jobs in the forest sector increases, so will local wealth and stability. The economic base o f a community is that portion o f a local economy that is generated by export demand (Williamson and Annamraju, 1996). The export of goods generates an economic injection into a local economy that in turn helps induce local spending, creating a foundation for a local economy to grow. When considering forest dependent communities in B.C., the economic base theory suggests that by exporting timber, communities will receive increased employment, income, population growth, increases in local expenditures, and a boost to the local tax base (Power, 1996). This economic formula has played a large role in the growth of industry and community development policy in British Columbia (Brown and Hall, 2000). Although this economic-base approach has succeeded in producing significant wealth and community prosperity in the short term, it is also responsible for creating an inherent weakness in the foundations o f local economies in three fundamental ways (Williamson and Annamraju, 1996). First, by focusing primarily on the export o f goods, local communities become vulnerable to fluctuations in external markets. Second, the economic base approach to economic development ignores the multiplier effect, an essential indicator of economic stability. If an economy is specialized (e.g., timber dependent), money that is injected into the economy through exports can more easily “leak” out through external purchases (Cox and Mair, 1988). If the local economy is more diversified, money injected into the community can more easily circulate within the 27 community, increasing employment and income. Lastly, the economic base approach does not take into full account the economic contribution gained from retaining natural assets in order to support, for example, the expansion o f local tourism (Douglas, 1994). In B.C., reliance on the economic base approach has created a situation in which peripheral communities find themselves striving to redefine their economic structure in the transition from an economy of natural resource abundance to one of scarcity (Marchak, 1983). Recent turbulence in the forest sector highlights many of the cyclical and structural characteristics of the industry, which, when viewed from the perspective of local economic health, illustrate the need for a more diverse approach to community and regional development (Brown and Hall, 2000). British Columbia is particularly dependent on the forest sector as a primary driver for local economies. According to Home (2009), “the Forest Vulnerability Index provides a number which indicates the vulnerability of each local area to potential down-tums in the forest sector” (p. 18). Northern rural communities tend to have a higher Forest Vulnerability Index, including the Robson Valley, which is rated as “most vulnerable” within the province. As Home (2009) concludes, “though a community with one strong industry may be better off than one with a number o f weak ones, there is an intuitive appeal to the notion that a diversified economic base will provide more stability in volatile economic times” (p. 10). The development and growth o f tourism during the last two decades shows that the industry is rapidly expanding to peripheral regions, specifically into resource dependent communities (Nepal, 2008). Three reciprocal factors can be cited for this expansion. First, a significantly large number o f tourists are now seeking a different type 28 of tourism experience that is not characteristic o f mass tourism attractions, but one which consists o f ‘unspoilt’ landscapes and ‘authentic’ experiences (Urry, 1995). Secondly, many peripheral regions are experiencing decline in their traditional economic activities, such as agriculture and forestry and, therefore, are seeking to expand their economic base by developing some form o f tourism (Jenkins et al., 1998). Thirdly, many tourism entrepreneurs are beginning to respond to potential development and expansion of tourism development opportunities in peripheral regions (Nepal, 2008). Recently, the government of British Columbia has been proactively pursuing resort and other forms of tourism development in the province (B.C. Resort Task Force, 2004). Considered an important aspect of the government’s ‘heartland strategy,’ which is to revitalize the dwindling economies of interior B.C. communities, many potential sites for resort development are located in B.C.’s ‘peripheral’ regions. The emergence and expansion o f tourism in peripheral regions brings with it all kinds of challenges and opportunities for local communities (Long et al., 1990). The Council o f Tourism Association of British Columbia (COTA, 2006) identifies the tourism industry as the second largest industry in B.C. that operates within the forested land base. While tourism ranks as the second largest employer by industry, behind the combined Forestry, Fishing, Mining, Oil and Gas industry in Northern and Central B.C. (see Figure 4), the majority o f the provincial tourism sector is based in the southern part of the province (COTA, 2006). 29 Figure 4: Employment by Industry in Central and Northern B.C. 00000 00000 00000 « 00000 ■ ■ 00000 Indnsttyn Source: COTA, 2006 COTA (2006) uncovers many strategic trends that point to growth potential in the Northern Central region, particularly relating to ecotourism and adventure tourism. While approximately 12-15% of tourism industry revenue is directly attributable to actual nature-based tourism activities, the vast majority o f B.C.’s tourism industry is somehow reliant on the province’s reputation for natural beauty (COTA, 2006). Figure 5 demonstrates the relative growth in ecotourism and overall tourism in the world between 1997 and 2004. The report projects that ecotourism will grow an average o f 20% per year compared with a 4% projected growth in overall tourism. Recently, ecotourism displayed steady growth, recording an overall 10% increase between 1997 and 2006 (Opportunity B.C., 2010). 30 Figure 5: Ecotourism versus Tourism Growth, 1997-2004 S 'i Eco-Tourism Overall Source: Opportunity B.C., 2010 A recent report from the Ministry of Jobs, Tourism, and Innovation (2012) reviews ten years of data on the economic value o f tourism in British Columbia. The report noted the provincial tourism industry grew strongly between 2000 and 2007, but was negatively impacted in 2008 and 2009 by the worldwide downturn in the economy. The report outlines how the tourism industry plays a significant role in the B.C. economy in terms of revenue earned by tourism businesses, value added to the economy by tourism activities, and creation of employment opportunities. The report highlights how the tourism industry makes a significant contribution to the B.C. economy compared with other primary resource industries, including forestry, agriculture, and mining and oil and gas extraction. This demonstrates that tourism was the only primary industry that has maintained steady growth in real GDP from 2003 to 2008, dropping slightly in 2009, and returning to grow in 2010 (Tourism B.C., 2012). Millier-Dickinson (2010) conducted an economic development strategy report aimed at proactively examining the current and future economic opportunities present in 31 the Fraser-Fort George Regional District. The report notes that a number of macroeconomic factors have caused tourism to struggle in recent years, including the appreciation o f the Canadian Dollar, passport requirements for U.S. citizens, and a struggling global economy, yet the sector was identified as having a strong 1-3 year growth potential, as well as a strong current impact on the regional economy. The tourism sector is shown to be growing in Valemount and adding stability in McBride. The report cautions that winter activity is nearing capacity and that additional attractions are needed to diversify successfully into non-winter months. Again, looking towards 2015, the report outlines an ideal situation for the tourism sector, including an “improved year-round product offering that results in a 10% increase in visitation” (Millier-Dickinson, 2010, pg. 41). The report notes that product development is needed in the Ancient Forest and the Walker Rainforest Wilderness Forest in the Crescent Spur area and assistance is needed to create ‘protected’ areas and for continued industry development to support protection. In a recent report, the Economic Development Office of the Village o f McBride outlined a vision of regional economic development focused on the next three and a half years, and the strengths and weakness of local industries, and the best use o f the natural resources available to the community (Economic Development Action Plan, 2010). The report identifies forestry as having the highest income dependency (31%), followed by the public sector (27%), and then by tourism (4%). The report also recognizes the heavy dependence that McBride has on the forest industry and the vulnerability associated when the sector fluctuates. Nevertheless, forest related exports are on the rise, despite a limited amount of available wood fiber, the closure o f almost all mill operations, and the lack of 32 available industry-ready land. The tourism industry is recognized as offering a diverse range of products, noting also that the volume o f visitors to Prince George increased by 115.7% between 2001 and 2007. Several strengths of the local tourism sector are identified as beneficial, including the pristine environment, a network of hiking, mountain biking, and snowmobile trails, backcountry and cross-country skiing, location along highway 16, and close proximity to Jasper National Park. Ultimately, the report suggests that McBride’s focus should shift from reducing economic dependency on the forestry sector to economic diversification. 2.3.1 McBride as a Resource Dependent Community Income dependencies show that the McBride-Valemount area relies on forestry as the primary source o f employment income and as a result has a very low level of economic diversity making it one o f the most vulnerable regions in the province to fluctuations in the forestry sector (Home, 2009). While the McBride-Valemount economy is relatively similar to others in the interior o f the province, it does have a particularly high dependence on forestry and tourism. Home’s research into the economic structure of resource dependent communities in B.C. (2009) highlights the role that emerging industries, like tourism, can play within the diversification process. Regional economic diversity is another indicator o f economic strength. Economic diversity refers to the degree to which a community relies on either a single industry as an economic driver or several industries (Nepal, 2008). Although some communities with a single dominant industry appear better off than communities with a number of smaller industries, a more diversified economy is better able to withstand changing markets and 33 economic uncertainties (Home, 2009; Davis and Hurron, 1992; Brown, Hall and Hall, 2000; Nepal, 2008). Regional area economic dependencies can be used to construct a diversity index where 50 represents the lowest level of diversity and 80 represents a high level of economic diversity (Home, 2009). The Prince George area has a diversity index of 66 and the McBride-Valemount area has a diversity index o f 65. Figure 6 highlights the McBride-Valemount area as being among the least diversified regions in the province. Figure 6: Regional Diversity in British Columbia Source: Home, 2009 British Columbia is particularly dependent on the forest sector as a driver o f local economies in many parts of the province. To examine this issue, Home developed the Forest Vulnerability Index (FVI) using Income Dependency and Diversity data. The FVI 34 indicates the vulnerability of each local area to potential downturns in the forest sector. The combination of a high income dependency on forestry and a low diversity index identifies a community that is vulnerable to a shifting forestry sector (Home, 2009). Both Prince George (46) and the McBride-Valemount areas (56) have a high level o f forest sector vulnerability. Combined with Quesnel (100) and Williams Lake (41), the Cariboo region o f the B.C. interior is one o f the most vulnerable regional areas in the province to any potential downturns in the forestry sector (See Figure 7). Low regional diversity and a high dependence on the forestry sector highlights the strong need for economic development and economic diversity within the McBride-Valemount economy. Figure 7: Forest Sector Vulnerability in British Columbia A. '• Source: Home, 2009 35 The McBride-Valemount region, however, is among the few regions in the province that has a comparably high dependence on the tourism industry (see Figure 8). Aided by its close proximity to the Alberta border and by virtue of Highway 16’s direct route to Jasper, the McBride/Valemount region has a much higher dependence on tourism than the surrounding interior of the province. The McBride-Valemount dependence on tourism is comparable to tourism dependence on the Haida Gwaii, a popular tourist destination. Figure 8: Dependence on Tourism in British Columbia Source: Home, 2009 36 Examining the changes in income dependency over a 14-year period from 1991 to 2006 reveals the changing nature o f the McBride economy (see Figure 9). In 1991, the highest income dependency was forestry, which at 33% was higher than the provincial average. Agriculture and tourism played equally important roles, while the public sector was the second highest dependency at 14%. In 1996, income dependency on forestry and tourism had risen, while dependency on agriculture began a decline that has lasted to 2006. In 2001, tourism was at a record high o f 15% (well above the provincial average) while forestry reached a record low of 30%. This trend reversed in the four years between 2001 and 2006, with forestry dependency rising (33%) and tourism dependency dropping (11%). Ultimately, forestry remains the dominant industry with the public sector and tourism playing important roles. Figure 9: McBride Income Dependencies 1991-2006 °/09°/0 °/®969 1o/8 0 8 0