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Regional differences in the structure and growth of manufacturing in British Columbia Nesbitt, James George 1973

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c 1 REGIONAL DIFFERENCES IN THE STRUCTURE AND GROWTH OF MANUFACTURING IN BRITISH C0LUM3IA by JAMES GEORGE NESBITT B.A., The U n i v e r s i t y of B r i t i s h Columbia, 1971 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n the Department of Geography We accept t h i s t h e s i s as conforming to the re q u i r e d standard THE UNIVERSITY OF BRITISH COLUMBIA May, 1973 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced degree a t t h e U n i v e r s i t y o f B r i t i s h C olumbia, I agree t h a t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p urposes may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Department o f Geography The U n i v e r s i t y o f B r i t i s h Columbia Vancouver 8, Canada Date June ^Q, 197* i i ABSTRACT This study provides an inv e n t o r y o f the manufacturing a c t i v i t y of B r i t i s h Columbia, and of i t s major s t a t i s t i c a l a r e a l d i v i s i o n s , f o r 1967. I n a d d i t i o n f i g u r e s are presented p e r t a i n i n g to changes i n manufacturing s t r u c t u r e between 1961 and 1967. The c o l l e c t i o n of these data has three purposes: t o describe i n a comprehensive manner the nature of manufacturing i n B r i t i s h Columbia and the d i f f e r e n c e s i n manufacturing a c t i v i t y from one part of the province t o another; t o o f f e r explanations f o r the s t r u c t u r e of manufacturing of the province and f o r d i f f e r e n c e s i n i n d u s t r y d i s t r i b u t i o n among the r e g i o n s ; and, by using a t h e o r e t i c a l framework, t o i n d i c a t e r e g i o n a l d i f f e r e n c e s i n the l e v e l of i n d u s t r i a l development suggested by v a r i a t i o n i n i n d u s t r y s t r u c t u r e . Economic base and l o c a t i o n t h e o r i e s are the b a s i s f o r a model pro-v i d i n g a framework w i t h i n which data on i n d u s t r i a l a c t i v i t y can be pre-sented. The model recognizes a r e l a t i o n s h i p between the types of manufactur-in g i n d u s t r y i n a r e g i o n and the l e v e l of i n d u s t r i a l development or com-p l e x i t y of the r e g i o n . The model i d e n t i f i e s f i v e types of manufacturing: primary processing ( i n d u s t r i e s which t y p i c a l l y l o c a t e near the source of t h e i r raw m a t e r i a l s ) , l o c a l i z e d (the r e l a t i v e l y u b i q u i t o u s , market-oriented i i i i n d u s t r i e s ) , l i n k e d i n d u s t r i e s ( d e f i n e d as being dependent on the primary se c t o r s f o r markets or m a t e r i a l s ) , import s u b s t i t u t i n g i n d u s t r i e s ( s p o r a d i c , market-oriented a c t i v i t i e s which compete with i n d u s t r i e s i n other regions f o r the l o c a l market) and consumer and producer goods i n d u s t r i e s (which supply the l o c a l market while at the same time s e l l i n g a l a r g e p r o p o r t i o n of goods e x t e r n a l l y ) . The model suggests that regions w i t h the lowest l e v e l of i n d u s t r i a l development have r e p r e s e n t a t i o n only i n the primary processing i n d u s t r i e s . More complex regions have some of the r e l a t i v e l y u b i q u i t o u s market-oriented i n d u s t r i e s as w e l l . Much of the manufacturing i n h i g h l y developed regions c o n s i s t s of the sporadic types of market-o r i e n t e d a c t i v i t i e s . Manufacturing data published by the f e d e r a l government, while judged the most comprehensive and r e l i a b l e , were nevertheless found to be very incomplete p a r t i c u l a r l y at the s u b - p r o v i n c i a l s c a l e . As a r e s u l t they have been supplemented by estimated f i g u r e s . The complete range of data, i n -c l u d i n g estimates, i s contained i n t h i s t h e s i s . In the i n t e r p r e t i v e part of the t h e s i s , i n d u s t r i e s are a l l o c a t e d to one of the types i d e n t i f i e d by the model. Primary processing i n d u s t r i e s are f i r s t of a l l i d e n t i f i e d , and the others are a l l o c a t e d t o the remaining types p r i m a r i l y according to the nature of t h e i r markets. Based on the percentage of manufacturing a c t i v i t y accounted f o r by each of the types of i n d u s t r y , the province and the regions are assigned t o "stages" of manufacturing development. Furthermore an exam-i n a t i o n of growth performances of the v a r i o u s types of manufacturing g i v e s an impression as t o whether a region's i n d u s t r i a l s t r u c t u r e i s advancing i n i t s complexity. I t i s discovered t h a t i n r e l a t i o n t o the r e s t of the p r o v i n c e , the Lower Mainland has an advanced manufacturing s t r u c t u r e . The other census iv divisions are i n general much more highly dependent on resource processing a c t i v i t i e s . This i s consistent with a heartland-hinterland model of the Bri t i s h Columbia economy. It i s found, however, that within the hinterland there were significant variations i n manufacturing structure i n 1967. More-over based on growth patterns during the 1961-1967 period some hinterland regions seem to be attracting more advanced types of manufacturing, while others appear to be experiencing no diversification or even increasing de-pendence on primary processing. V RESUME Cette Itude f a i t 1 ' i n v e n t a i r e de l ' a c t i v i t e manufacturiere de l a Colorabie b r i t a n n i q u e et de ses d i v i s i o n s de recensement pour I'anne'e 1967. En p l u s , des donnees s t a t i s t i q u e s concernant l e s changeraents dans l a s t r u c t u r e i n d u s t r i e l l e entre 1961 et 1967 sont p r l s e n t e e s . II y a t r o i s buts \ r e ' a l i s e r : de*crire d'une maniere comprehensive l e s c a r a c t e r i s t i q u e s de I ' i n d u s t r i e manufacturiere en Colombie b r i t a n n i q u e et l e s d i f f e r e n c e s s t r u c t u r a l e s entre l e s d i v e r s e s regions de l a pr o v i n c e ; donner des t e n t a -t i v e s d ' e x p l i c a t i o n de l a s t r u c t u r e i n d u s t r i e l l e de l a province et l e s r e p a r t i t i o n s d i f f e r e n t e s des i n d u s t r i e s i n d i v i d u e l l e s entre l e s r e g i o n s ; et e n f i n , en se servant d'un modele, i n d i q u e r l e s d i f f e r e n c e s r e g i o n a l e s de niveau du developpement i n d u s t r i e l que suggerent l e s v a r i a t i o n s s t r u c -t u r a l e s . Un modele q u i emprunte aux t h e o r i e s de base economique et de l o c a l i -s a t i o n s e r t d'un cadre dans l e q u e l i l e s t p o s s i b l e de presenter des donnees de I ' a c t i v i t e i n d u s t r i e l l e . Ce mociele re c o n n a i t l e s rappor t s entre l e s types d * i n d u s t r i e s manufacturieres q u i se trouvent dans une r e g i o n et l e niveau du developpement (ou complexite) i n d u s t r i e l de c e t t e r e g i o n . Cinq groupes d ' i n d u s t r i e s s 1 i d e n t i f i e n t : a c t i v i t e s q u i t r a i t e n t l e s matieres v i p r i m a i r e s , et q u i se l o c a l i s e n t pres des ressources; i n d u s t r i e s , r e l a t i v e -raent omnipresentes, produisant des a r t i c l e s q u i sont rareraent l e s o b j e t s du commerce i n t e r r e g i o n a l ; i n d u s t r i e s q u i sont l i e e s aux secteurs p r i m a i r e s en tant que f o u r n i s s e u r s d'equipement ou acheteurs de p r o d u i t s semi-ouvres; i n d u s t r i e s ayant des r e p a r t i t i o n s sporadiques entre l e s r e g i o n s , q u i fo n t concurrence aux i m p o r t a t i o n s ; e t i n d u s t r i e s des biens de consommation ou de production q u i f o u r n i s s e n t l e marche l o c a l , mais a u s s i pour q u i une r e l a -tivement grande p r o p o r t i o n de ventes sont a l ' e x t e r i e u r . D'apres l e modele, l e s regions l e s moins developpees n'ont que des i n d u s t r i e s de type p r i m a i r e ; l e s r e g i ons aux s t r u c t u r e s p l u s complexes ont a u s s i des i n d u s t r i e s r e l a t i v e -ment omnipresentes; dans l e s regions l e s p l u s developpees, I ' a c t i v i t e manu-f a c t u r i e r e se d i s t i n g u e par 1 'importance r e l a t i v e des i n d u s t r i e s de r e p a r -t i t i o n sporadique, o r i e n t e e s vers des marches. Les donnees s t a t i s t i q u e s p u b l i e e s par l e gouvernement f e d e r a l , jugees l e s p l u s comprehensives e t exactes, sont neanmoins t r e s incompletes, par-t i c u l i e r e r a e n t "a I ' e c h e l l e s o u s - p r o v i n e i a l e . Par s u i t e , e l l e s sont com-p l e t e e s par des approximations. Cette th Vese comprend l e s donnees du gou-vernement et l e s approximations pour toutes l e s i n d u s t r i e s et pour toutes l e s r e g i ons de l a p r o v i n c e . Dans l a p a r t i e i n t e r p r e t a t i v e de l a these, I 1 a l l o c a t i o n des i n d u s t r i e s aux groupes du modele se f a i t surtout en tenant compte de l a nature des marches, apres que l e s secteurs q u i t r a i t e n t l e s matieres p r i m a i r e s sont i d e n t i f i e s . Le degre du developperaent i n d u s t r i e l d'une r e g i o n e s t determine par l a r e p a r t i t i o n de toute I ' a c t i v i t e manufac-t u r i e r e entre l e s groupes. Une etude du changement de l a s t r u c t u r e manu-f a c t u r i e r e d'une r e g i o n donne a i n s i l ' i m p r s s s i o n d'une p r o g r e s s i o n ou d'une r e g r e s s i o n de l a complexite i n d u s t r i e l l e . v i i I I e s t decouvert que, par rapport au r e s t e de l a prov i n c e , l a r e g i o n du Bas Fraser (y compris 1»agglomeration de Vancouver) se d i s t i n g u e par une s t r u c t u r e i n d u s t r i e l l e r e l a t i v e m e n t evoluee, t a n d i s que l e s autres d i v i s i o n s de recensement r e s t e n t , en g e n e r a l , beaucoup p l u s dependantes des a c t i v i t i e s p r i m a i r e s , ce q u i e s t compatible avec un moclele «centre-peri-pherie» de l a pr o v i n c e . Les regions p e r i p h e r i q u e s ne sont pas, cependant, completement homogenes. Quelques regions semblent se d i v e r s i f i e r , t a n d i s que dans d«autres l e traitement des matieres p r i m a i r e s garde sa suprematie ou meme devient p l u s important. v i i i TABLE OF CONTENTS CHAPTER PAGE I INTRODUCTION 1 Purpose and Contribution of the Study 1 Related Studies 2 Organization of the Study 10 Sources of Data.. 13 II THEORETICAL FRAMEWORK: A MODEL OF REGIONAL INDUSTRIAL DEVELOPMENT AND CHANGING MANUFACTURING STRUCTURE 19 The "Stages" 25 Stage 1 25 Stage 2 27 Stage 3 29 Stage k 3U Stage 5.. 38 Subregional Model.... • • 39 The Model of Regional Industrial Development: Concluding Comments • U3 III MANUFACTURING IN BRITISH COLUMBIA AND IN THE REGIONS OF THE PROVINCE U6 Importance of Manufacturing i n the Province During the 1960's U6 Employment U6 Value Added 1*9 Importance of Manufacturing in the Regions of British Columbia 51 IV NATURE OF MANUFACTURING IN BRITISH COLUMBIA 57 Data Sources 57 Estimation Methods for Value of Shipments by Industry...... 60 ix CHAPTER PAGE Value of Shipments by Industry.. 62 Market Area Orientation of Industries 69 Analysis of the Structure of B.C. Manufacturing. 75 Industries with Location Quotients of Greater than 2 . 0 . . . 76 Large industries with world or national markets 76 Other industries with location quotients of greater than 2.0 • 78 Industries with Location Quotients of Less than 0 . 5 . . . . . . 80 Industries with western, far western or B.C. markets... 80 Industries with national markets 87 Industries with Location Quotients Between 0.5 and 2 . 0 . . . 89 Industries characterized by l i t t l e interprovincial trade • 89 Industries which tend to be supply oriented 95 Other industries with location quotients between 0.5 and 2.0 98 Classification of Industries . . . . . i 105 Primary Processing Industries... 105 Localized Industries 106 Backwardly Linked Industries 109 Import Substituting Industries 109 Industry Structure Diagram of British Columbia........... l lU "Stage" of British Columbia's Manufacturing Development.. 116 V REGIONAL DIFFERENCES IN MANUFACTURING STRUCTURE IN BRITISH COLUMBIA... 118 Distribution of Industries Among Regions.. 118 Data Sources..... 118 Graphical Presentation of the Distribution of Industries Among Regions............. 119 X CHAPTER PAGE Interpretation of Graphs 133 Distribution of Industries Among Regions Measured by Value of Shipments • lUO Data Sources and Methods of Estimation....... lUO Value of Shipments by Industry and Region lU6 Interpretation of Data lit? Primary processing industries 1U7 Non resource processing industries 160 Localized industries l6U Backwardly linked industries 175 Import substituting industries • 183 Regional Industry Structure Diagrams 18° "Stages" of Regional Manufacturing Development... 18° Quantitative Comparison of the Levels of Development of the Regions and the Province • 198 Summary: The Manufacturing Picture of Brit i s h Columbia i n 1967 201 VI MANUFACTURING GROWTH IN BRITISH COLUMBIA 203 Shift and Share Analysis 20li Shift and Share Analysis of the Growth of Manufacturing Employment in B r i t i s h Columbia and the Regions of the Province. 206 Regional Components by Industry....... 212 Regional Components by Industry Group 217 Tabular Presentation of Regional Components by Industry Group..... 213 Changes in the Allocation of Industries to Industry Groups 218 Changes due to aggregation of four-digit industries.... 218 Changes due to differences i n areal units..... 221 x i CHAPTER PAGE Industries Which Ceased Production Between l ? 6 l and 1967 222 Revised Table of Value of Shipments by Industry Groups... 223 Analysis of Regional Components by Industry Group 223 Primary Processing Industries......... 225 Localized Industries 230 Census Division 1 23U Census Division 2 236 Census Division 3 . . . . . • 237 Census Division U. 233 Census Division 5 239 Census Division 6 . . 2I4.O Census Division 7.* 21*0 Census Division 8 . . . 2I4.O Census Division 9 . . . . . • • • • • 2Ul Census Division 10. 2U2 Backwardly Linked Industries.... 21*2 Import Substituting Industries........................... 2U8 Census Division 3 250 Census Division k 251 Census Division 5. •••••• 256 Census Division 6. • 257 Census Division 8 • 257 Analysis of Regional Components i n Terms of the Theoretical Framework........ 258 Synthesis.... 269 X l l CHAPTER PAGE VII CONCLUSIONS 27a Summary of Findings........... 27U Limitations of the Thesis and Possibilities for Further Study 278 BIBLIOGRAPHY 281 APPENDIX A TABLES OF VALUE OF SHIPMENTS AND REGIONAL COMPONENTS, BY INDUSTRY, FOR REGIONS OF BRITISH COLUMBIA... 289 APPENDIX B STANDARD INDUSTRIAL CLASSIFICATION (MANUFACTURING) 326 x i i i LIST OF TABLES TABLE PAGE I EMPLOYMENT ESTIMATES IN ALL NON-AGRICULTURAL INDUSTRIES AND IN MANUFACTURING, BRITISH COLUMBIA AND CANADA, 1961-1970 U7 II EMPLOYMENT IN MANUFACTURING AS A PERCENTAGE OF EMPLOYMENT IN ALL NON-AGRICULTURAL INDUSTRIES, BRITISH COLUMBIA AND CANADA, 1961-1970 U8 III VALUE ADDED IN MANUFACTURING AS A PERCENTAGE OF VALUE ADDED IN ALL GOODS-PRODUCING INDUSTRIES, CANADA AND PROVINCES, 1961-1969 50 IV LABOUR FORCE IN MANUFACTURING EXPRESSED AS A PERCENTAGE OF LABOUR FORCE IN ALL INDUSTRIES, CENSUS DIVISIONS OF BRITISH COLUMBIA AND PROVINCES OF CANADA, 196l 53 V STATISTICS PERTAINING TO THE VALUE OF SHIPMENTS OF GOODS OF OWN MANUFACTURE, BY INDUSTRY GROUP AND INDUSTRY, BRITISH COLUMBIA, 1967... 63 VI VALUE OF SHIPMENTS OF GOODS OF OWN MANUFACTURE BY FIRST GEOGRAPHICAL DESTINATION, EXPRESSED AS A PERCENTAGE OF TOTAL VALUE OF SHIPMENTS, BY THREE- AND FOUR-DIGIT INDUSTRIES, MARKET AREA ORIENTATION OF INDUSTRIES, BRITISH COLUMBIA, 1967 70 VII TOTAL VALUE OF SHIPMENTS OF GOODS OF OWN MANUFACTURE OF ALL BRITISH COLUMBIA ESTABLISHMENTS BY FIRST GEOGRAPHICAL DESTINATION, EXPRESSED AS A PERCENTAGE OF TOTAL VALUE OF SHIPMENTS OF ALL CANADIAN MANUFACTURING ESTABLISHMENTS BY FIRST GEOGRAPHICAL DESTINATION, 1967 7U VIII AVERAGE VALUE OF SHIPMENTS PER ESTABLISHMENT IN THE HOUSEHOLD FURNITURE INDUSTRY, , BRITISH COLUMBIA, MANITOBA, ONTARIO AND QUEBEC, 1967 92 IX CLASSIFICATION OF BRITISH COLUMBIA MANUFACTURING INDUSTRIES INTO FOUR GROUPS BASED ON THE THEORETICAL FRAMEWORK 107 X VALUE OF SHIPMENTS OF BRITISH COLUMBIA MANUFACTURERS DESTINED FOR BRITISH COLUMBIA, BY THREE- AND FOUR-DIGIT INDUSTRIES, 1967 110 xiv TABLE PAGE XI NUMBER OF MANUFACTURING INDUSTRIES, MANUFACTURING EMPLOYMENT AND POPULATION, FOR REGIONS OF BRITISH COLUMBIA, 1967 13U XII VALUE OF SHIPMENTS OF GOODS OF OWN MANUFACTURE BY INDUSTRY GROUP AND INDUSTRY, REGIONS OF BRITISH COLUMBIA, 1967 290 XIII VALUE OF SHIPMENTS BY REGION AS A PERCENTAGE OF PROVINCIAL SHIPMENTS, INDUSTRY GROUP AND INDUSTRY, 1967 300 XIV VALUE OF SHIPMENTS BY INDUSTRY GROUP AND INDUSTRY AS A PERCENTAGE OF TOTAL REGIONAL SHIPMENTS, 1967 310 XV VALUE OF SHIPMENTS OF PRIMARY PROCESSING INDUSTRIES, BRITISH COLUMBIA AND REGIONS, 1967 U*8 XVI AVERAGE VALUE OF SHIPMENTS PER ESTABLISHMENT IN THE SAWMILL AND PLANING MILL INDUSTRY, BRITISH COLUMBIA AND REGIONS, 1967 153 XVII VALUE OF SHIPMENTS OF INDUSTRIES OTHER THAN PRIMARY PROCESSING, BRITISH COLUMBIA AND REGIONS, 1967 162 XVIII VALUE OF SHIPMENTS OF LOCALIZED INDUSTRIES, BRITISH COLUMBIA AND REGIONS, 1967 165 XIX VALUE OF SHIPMENTS OF LOCALIZED INDUSTRIES ORIENTED TO HOUSEHOLD AND BUSINESS MARKETS, BRITISH COLUMBIA AND REGIONS, 196? 168 XX VALUE OF SHIPMENTS OF BACKWARDLY LINKED INDUSTRIES, BRITISH COLUMBIA AND REGIONS, 1967 177 XXI VALUE OF SHIPMENTS OF IMPORT SUBSTITUTING INDUSTRIES, BRITISH COLUMBIA AND REGIONS, 1967 181* XXII VALUE OF SHIPMENTS OF IMPORT SUBSTITUTING INDUSTRIES ORIENTED TO HOUSEHOLD AND BUSINESS MARKETS, BRITISH COLUMBIA AND REGIONS, 1967 187 XXIII INDUSTRY STRUCTURE INDICES OF THE REGIONS, 1967 200 XXIV COMPONENTS OF EMPLOYMENT GROWTH IN MANUFACTURING, FOR BRITISH COLUMBIA AND CENSUS DIVISIONS, 1961-1967 207 XXV REGIONAL COMPONENTS OF EMPLOYMENT GROWTH IN MANUFACTURING BY INDUSTRY, FOR CENSUS DIVISIONS, 1961-1967 320 XV TABLE PAGE XXVI REGIONAL COMPONENTS OF EMPLOYMENT GROWTH IN MANUFACTURING BY INDUSTRY GROUP, FOR BRITISH COLUMBIA AND CENSUS DIVISIONS, 1961-1967 219 XXVII VALUE OF SHIPMENTS OF INDUSTRY GROUPS ACCORDING TO MODIFIED INDUSTRY CLASSIFICATION, BRITISH COLUMBIA AND REGIONS, 1967 22U XXVIII PERCENTAGE INCREASE IN POPULATION, CANADA, BRITISH COLUMBIA AND CENSUS DIVISIONS, 1961-1967 232 XXIX CLASSIFICATION OF CENSUS DIVISIONS BY POPULATION GROWTH RATE AND LOCALIZED INDUSTRY REGIONAL COMPONENT RELATIVE TO CANADA, 1961-1967 233 XXX "a" VALUES AND INDUSTRY CHANGE INDICES, BRITISH COLUMBIA AND REGIONS, 1961-1967 262 XXXI INDUSTRY STRUCTURE INDICES, 1967 AND INDUSTRY CHANGE INDICES, 1961-1967, BRITISH COLUMBIA AND REGIONS 271 xvi LIST OF FIGURES FIGURE PAGE 1. The Industrial Structure of a Hypothetical Region i n Stage 1 26 2. The Industrial Structure of a Hypothetical Region i n Stage 2.. 26 3. The Industrial Structure of a Hypothetical Region i n Stage 3 •••• 32 k» The Industrial Structure of a Hypothetical Region i n Stage U.... 32 5. The Industrial Structure of a Hypothetical Region in Stage 5 UO 6. The Industrial Structure of Brit i s h Columbia i n 1967 115 7. The Industrial Structure of Census Division 1 i n 1967 190 8. The Industrial Structure of Census Division 2 i n 1967 190 9. The Industrial Structure of Census Division 3 i n 1967 191 10. The Industrial Structure of Metropolitan Vancouver in 1967... 192 11. The Industrial Structure of the Rest of Census Division U i n 1967 192 12. The Industrial Structure of Metropolitan Victoria i n 1967.... 193 13• The Industrial Structure of the Rest of Census Division 5 i n 1967 193 lU. The Industrial Structure of Census Division 6 i n 1967 19U 15. The Industrial Structure of Census Divisions 7 and 9 in 1967 19h 16. The Industrial Structure of Census Division 8 i n 1967........ 195 17. The Industrial Structure of Census Division 10 in 1967 195 x v i i LIST OF GRAPHS GRAPH PAGE 1. Arrangement of Two- and Three-Digit Industries in Graphs..... 120 2. Manufacturing Industries Operating i n Census Division 1 in 1967. ••••• 121 3. Manufacturing Industries Operating i n Census Division 2 i n 1967 •• 122 U. Manufacturing Industries Operating i n Census Division 3 in 1967 123 5. Manufacturing Industries Operating i n Metropolitan Vancouver i n 1967.. • 121* 6. Manufacturing Industries Operating i n the Rest of Census Division 1* i n 1967 • 125 7. Manufacturing Industries Operating i n Metropolitan Victoria i n 1967 126 8. Manufacturing Industries Operating in the Rest of Census Division 5 i n 1967 127 9. Manufacturing Industries Operating i n Census Division 6 in 1967 128 10. Manufacturing Industries Operating i n Census Division 7 in 1967 129 11. Manufacturing Industries Operating i n Census Division 8 i n 1967.••••••••• 130 12. Manufacturing Industries Operating in Census Division 9 in 1967.. 131 13. Manufacturing Industries Operating i n Census Division 10 in 1967. 132 x v i i i LIST OF MAPS MAP PAGE 1. The 10 Census Divisions and Two Census Metropolitan Areas of British Columbia... 5U 2. Regional Share by Census Division, 1961-1967 • 211 3. Regional Components i n Primary Processing Industries by Census Division, 1961-1967 231 U. Regional Components i n Localized Industries by Census Division, 1961-1967 • 235 5. Regional Components i n Backwardly Linked Industries by Census Division, 1961-1967 2kh 6. Regional Components i n Import Substituting Industries by Census Division, 1961-1967 2U9 7. Manufacturing Development by Census Division 272 ACKNOWLEDGMENTS I wish to thank Dr. Roger Leigh, ray adviser, for his suggestions and encouragement i n the research and writing of this thesis, and Dr. Robert N. North for his helpful comments. CHAPTER I INTRODUCTION Purpose and C o n t r i b u t i o n of the Study This t h e s i s has a number of purposes. One i s t o give a d e t a i l e d i n -ventory and e x p l a n a t i o n f o r the l o c a t i o n of manufacturing i n d u s t r i e s i n B r i t i s h Columbia (B.C.)* as a whole, and i n the regions of the pro v i n c e . There i s , however, an attempt t o go beyond simple i n v e n t o r y . The l a r g e mass of data must be placed i n t o a framework i f i t i s to be i n t e r p r e t e d i n a meaningful way. Therefore a second purpose i s t o devise a c l a s s i f i c a t i o n of manufacturing i n d u s t r i e s based on those c h a r a c t e r i s t i c s of the indus-t r i e s which are s i g n i f i c a n t i n terms of l o c a t i o n theory and r e g i o n a l eco-nomic development theory. By comparing the importance of the v a r i o u s c l a s -ses of i n d u s t r i e s from one r e g i o n to another, i t i s then p o s s i b l e t o show r e g i o n a l d i f f e r e n c e s i n the l e v e l of complexity of manufacturing i n the pro v i n c e . In other words, the knowledge gained concerning the i n d u s t r i a l s t r u c t u r e and d i v e r s i t y of a r e g i o n w i l l be used t o show the i n d u s t r i a l m a t u r i t y of the r e g i o n . A t h i r d purpose of the t h e s i s i s t o describe and e x p l a i n the changes that have taken place i n manufacturing i n a recent time p e r i o d , both i n the province as a whole and i n the r e g i o n s . Again the c l a s s i f i c a t i o n of i n d u s t r i e s w i l l prove u s e f u l . A comparison of the changing importance of the va r i o u s i n d u s t r y c l a s s e s w i l l be made on a r e -gio n - t o - r e g i o n b a s i s to determine i f there are regions i n the province where manufacturing i s progressing to a more advanced l e v e l ( i n terms of com p l e x i t y ) , and where i t i s r e v e r t i n g t o a more elementary l e v e l . The c o n t r i b u t i o n of the t h e s i s i s p r i m a r i l y s u b s t a n t i v e . I t i s hoped tha t i n p r o v i d i n g an overview of the province's manufacturing economy th a t 2 i t might serve as one s t a r t i n g p o i n t f o r more d e t a i l e d geographical s t u d i e s of i n d i v i d u a l i n d u s t r i e s , p a r t i c u l a r l y of the non resource processing v a r i -e t y , i n B.C. Studies of the r e g i o n s can be undertaken at f u t u r e dates, u s i n g t h i s d e s c r i p t i o n of the mid 1960's as a benchmark. I n a d d i t i o n t o the substantive c o n t r i b u t i o n i t i s hoped t h a t the t h e s i s might provide some q u a n t i t a t i v e techniques, p a r t i c u l a r l y those d e a l i n g w i t h the measurement of the l e v e l s and d i r e c t i o n s of i n d u s t r y advancements, which could be used i n other s t u d i e s d e a l i n g w i t h r e g i o n a l economic development. Related Studies There are a number of s t u d i e s of the economy of B.C. which are r e l a t e d to the subject matter of t h i s t h e s i s . (Studies which are p a r t i c u l a r l y v a l u a b l e from a t h e o r e t i c a l viewpoint are r e f e r r e d to i n the next chapter.) An a r t i c l e by Shearer (1968) describes the e v o l u t i o n of the s t r u c t u r e of the B.C. economy d u r i n g the p e r i o d 1921-1961. A comparison i s made of the p r o v i n c i a l and n a t i o n a l economic s t r u c t u r e s f o r 1961. Shearer looks at the e n t i r e economy of the p r o v i n c e , manufacturing being o n l y one s e c t o r , along w i t h a g r i c u l t u r e , e x t r a c t i v e i n d u s t r i e s , c o n s t r u c t i o n and s e r v i c e s . Manufacturing i s , however, subdivided i n t o resource processing and other i n d u s t r i e s . I t i s noted t h a t although there has been a r e l a t i v e increase i n manufacturing as a whole d u r i n g the p e r i o d 1921-1961, there i s no i n d i -c a t i o n that resource processing i n d u s t r i e s have been r e p l a c e d by other manufacturing, what Shearer terms "true secondary manufacturing a c t i v i t i e s " , i n the p r o v i n c i a l economic base ( i b i d . , l l i - l 5 ) . I n comparing the B.C. economy w i t h t h a t of Canada, Shearer notes the much greater dependence of the former on " l o w - l e v e l processing of n a t i v e n a t u r a l resources" ( i b i d , , 10). The "other" manufacturing i n d u s t r i e s are then described as being e i t h e r o r i e n t e d t o the l o c a l consumer market, a u x i l i a r y t o the resource-based i n d u s t r i e s or by-products of these i n d u s t r i e s . U n f o r t u n a t e l y the au-thor i s unable t o produce s t a t i s t i c s f o r these separate i n d u s t r i a l c l a s s e s . Shearer i s not p r i m a r i l y concerned w i t h the i n t r a r e g i o n a l v a r i a t i o n s i n economic a c t i v i t y i n B.C. He does, however, present a t a b l e ( i b i d . , 7) which shows the d i s t r i b u t i o n of the labour f o r c e i n "the c i t y " ( M e t r o p o l i t a n Vancouver and M e t r o p o l i t a n V i c t o r i a ) and the " h i n t e r l a n d " ( r e s t of the p r o v i n c e ) . At the s e c t o r s c a l e , not s u r p r i s i n g l y , a g r i c u l t u r e and e x t r a c -t i v e i n d u s t r i e s are r e l a t i v e l y much more important i n the h i n t e r l a n d , where-as s e r v i c e s are much more s i g n i f i c a n t i n the c i t y . Manufacturing as a whole does not d i f f e r very g r e a t l y i n importance between the two r e g i o n s . When the manufacturing sector i s broken down i n t o resource processing and other i n d u s t r i e s , however, there i s a c l e a r r e g i o n a l d i f f e r e n c e . The h i n -t e r l a n d i s very s p e c i a l i z e d i n resource p r o c e s s i n g , whereas the c i t y i s overrepresented i n other manufacturing. I n an a r t i c l e by Denike and L e i g h (1972) much more a t t e n t i o n i s p a i d t o the " s p a t i a l o r g a n i z a t i o n of the p r o v i n c i a l economy" ( i b i d . , 7U) than i s the case i n the Shearer a r t i c l e . Most of the a n a l y s i s i s at the l e v e l of the census d i v i s i o n s of the province (enlarged from 10 t o 12 by the treatment of M e t r o p o l i t a n Vancouver and M e t r o p o l i t a n V i c t o r i a as separate regions) r a t h e r than the province as a whole. The paper t r e a t s three as-pects of r e g i o n a l economic d i f f e r e n c e s : economic s t r u c t u r e (composition), economic growth and stage of development. Ten employment c a t e g o r i e s , of which manufacturing i s one, are used f o r the d i s c u s s i o n of r e g i o n a l eco-nomic s t r u c t u r e . Since the e n t i r e economy i s being considered, no attempt i s made to disaggregate the manufacturing category. A f a c t o r a n a l y s i s of the r e g i o n a l employment p a t t e r n s enables the grouping of s i m i l a r r e g i o n s , and "the r e s u l t i s a more complex v e r s i o n of the c i t y - h i n t e r l a n d model" ( i b i d , , 76), S p e c i f i c a l l y , v a r i a t i o n s i n the economic s t r u c t u r e of the h i n t e r l a n d regions become evi d e n t . Regional economic growth i s discussed i n terms of two dimen s i o n s — t h e d i s t r i b u t i o n of manufacturing growth among the regions was d i f f e r e n t during the time p e r i o d examined (the 1960's) from the d i s t r i b u t i o n of general growth (a combination of p o p u l a t i o n , personal income and t o t a l employment growth). The authors t h e r e f o r e conclude t h a t "economic growth i n the province was independent of growth i n the manufac-t u r i n g s e c t o r " ( i b i d . , 78). In terms of stages of development, regions are d i f f e r e n t i a t e d on the b a s i s of the r e l a t i o n s h i p of the y e a r l y l e v e l of cap-i t a l investment t o fo u r socio-economic i n d i c e s , over the p e r i o d 1960-1969. The authors j u s t i f y t h e i r c o n s i d e r a t i o n of a v e r y strong r e l a t i o n s h i p be-tween investment and income to i n d i c a t e a r e g i o n i n an elementary stage of development. I n c r e a s i n g l y mature economies are c h a r a c t e r i z e d by having a strong r e l a t i o n s h i p between investment and r e t a i l s a l e s , investment and manufacturing employment, and, at the highest l e v e l of development, i n v e s t -ment and p o p u l a t i o n . F i n a l l y a r e g i o n a l i z a t i o n of the province on the b a s i s of the three c r i t e r i a of economic s t r u c t u r e , growth and stage of de-velopment i s made which maintains the c o n t r a s t between the h e a r t l a n d and h i n t e r l a n d but d i f f e r e n t i a t e s the l a t t e r i n t o three s p a t i a l " s e c t o r s " . Three a r t i c l e s p e r t a i n i n g s p e c i f i c a l l y t o the manufacturing i n d u s t r y of the province may be noted, Ingram (1958) looks at the h i s t o r i c a l de-velopment of i n d u s t r y i n the province d u r i n g the previous 100 y e a r s . Three time periods are considered. During the f i r s t p e r i o d , from 1858 t o 1908, the major resource processing i n d u s t r i e s of sawmi l l i n g and f i s h p rocessing became e s t a b l i s h e d . As e a r l y as the l890's, however, a number of "second-ary i n d u s t r i e s " such as the c o n s t r u c t i o n of f e r r y boats, the manufacture of 5 b r i c k s and cement, and the pro d u c t i o n of food products f o r the l o c a l con-sumer market ( m i l k , bread, sugar, e t c . ) e x i s t e d . The p e r i o d 1908-1939 saw the establishment of the province's pulp and paper i n d u s t r y , i n the primary processing f i e l d . P r i o r t o World War I a r e p o r t by the p r o v i n c i a l govern-ment suggested t h a t a b a s i c i r o n and s t e e l i n d u s t r y would be b u i l t i n the prov i n c e . The s i g n i f i c a n t depression which h i t the province i n 1912, how-ever, seems t o have been a f a c t o r i n preventing the plans from m a t e r i a l -i z i n g . Ingram ( i b i d . , 582) f e e l s t h a t by 1939 B.C. "had a f a i r l y w e l l -rounded secondary i n d u s t r y , a l t h o u g h most of the f i r m s were supplying the greater p r o p o r t i o n of t h e i r output to companies i n the primary i n d u s t r y f i e l d and were l i k e w i s e f a i r l y d i r e c t l y dependent upon world-wide market c o n d i t i o n s " . Ingram seems t o f e e l that World War I I provided a s i g n i f i c a n t impetus t o the i n d u s t r i a l i z a t i o n of the p r o v i n c e . The immediate e f f e c t of the war was the s u b s t a n t i a l increase i n s h i p b u i l d i n g , a i r c r a f t p r oduction and i n r e l a t e d metal working f i e l d s . The war, however, a l s o had two important i n d i r e c t e f f e c t s which were to b e n e f i t the province's i n d u s t r i a l i z a t i o n a f t e r 19U5. One was the "build-up of a po o l of h i g h l y s k i l l e d tradesmen" ( i b i d . ) , the other was the sharp increase i n p o p u l a t i o n which provided an expanding market. S h o r t l y a f t e r the war a s t e e l r o l l i n g m i l l began pro-d u c t i o n f o r the f i r s t time i n the pr o v i n c e , and other i n d u s t r i e s e s t a b l i s h e d during the 1939-1958 p e r i o d included o i l r e f i n e r i e s , chemical p l a n t s pro-ducing i n p u t s f o r the pulp and paper and mining i n d u s t r i e s , and aluminum r e f i n i n g . I n d i s c u s s i n g f u t u r e prospects f o r i n d u s t r i a l growth, Ingram c i t e s the growth of p o p u l a t i o n which w i l l encourage increased production of con-sumer goods, as w e l l as the advantages of the province's l o c a t i o n on t i d e -6 water which could favour the establishment of i n d u s t r i e s s e l l i n g t o over-seas markets. The p o s s i b i l i t y of new smelting f a c i l i t i e s i n the province based p a r t i c u l a r l y on copper d i s c o v e r i e s i s a l s o mentioned. Ingram does not d i s c u s s t o any extent the s p a t i a l aspects of i n d u s t r i a l development i n the province. The c o n c l u s i o n gained i s that most of i t has been i n the Lower Mainland. Munro's a r t i c l e (1971) deals e s s e n t i a l l y w i t h those manufacturing i n -d u s t r i e s which are not engaged i n the processing of n a t u r a l r e s o u r c e s . The author begins by g i v i n g a s t a t i s t i c a l summary of the i n d i v i d u a l indus-t r i e s i n the group, u s i n g employment and value added data f o r 1963 c o l -l e c t e d by the Dominion Bureau of S t a t i s t i c s (DBS) f o r the i n d u s t r y groups and i n d u s t r i e s defined according t o the Standard I n d u s t r i a l C l a s s i f i c a t i o n ( S.I.C.). In some cases, i f the f i g u r e s f o r a p a r t i c u l a r i n d u s t r y are not rel e a s e d by the DBS, estimates were made. G e n e r a l l y , however, w i t h i n any given i n d u s t r y group the i n d u s t r i e s f o r which employment and value added f i g u r e s are not pub l i s h e d s e p a r a t e l y are considered as the "other" category. I n b r i e f l y d i s c u s s i n g each i n d u s t r y the author u s u a l l y d e s c r i b e s the nature of a c t i v i t y and the types of markets the i n d u s t r y serves. The major purpose of the a r t i c l e i s to gauge the impact of North A t -l a n t i c f r e e trade on the province's "import-competing s e c t o r " . In order t o do t h i s , however, as s t a t e d by the author ( i b i d . , 97) i t i s necessary to e x p l a i n "why the secondary manufacturing i n d u s t r i e s observed t o e x i s t i n B r i t i s h Columbia have chosen to l o c a t e i n the prov i n c e , r a t h e r than i n other p a r t s of the country, and ... why other Canadian secondary manufacturers s e l l i n g i n the B r i t i s h Columbia market have chosen t o absent themselves e n t i r e l y from the pro v i n c e " . The author then discusses some of the p r i n -c i p l e s of l e a s t - c o s t l o c a t i o n theory, and h i s c o n c l u s i o n i s t h a t secondary 7 i n d u s t r i e s are present i n the province because of three f a c t o r s : supply o r i e n t a t i o n , h i g h d i s t r i b u t i o n costs and l i m i t e d economies of s c a l e , and r e l a t i v e l y low assembly and d i s t r i b u t i o n costs ( i . e . f o o t l o o s e i n d u s t r i e s ) . An examination of the a c t u a l i n d u s t r i e s i n the province suggests t h a t sec-ondary manufacturing i s mainly present i n B.C. because of the second f a c t o r . Munro's next step i s t o develop a t h e o r e t i c a l framework to determine the impact of f r e e trade on B.C. i n d u s t r i e s competing w i t h U.S. or European i n d u s t r i e s . D i f f e r e n t cases are i l l u s t r a t e d . For example f r e e trade would have l i t t l e or no impact on the B.C. i n d u s t r y i f d i s t r i b u t i o n costs were very responsive t o d i s t a n c e . On the other hand, i f p r o d u c t i o n costs were much higher i n a B.C. i n d u s t r y than i n the same i n d u s t r y overseas, f r e e trade might r e s u l t i n the f o r e i g n country u n d e r s e l l i n g the B.C. i n d u s t r y i n the province i t s e l f . F o l l o w i n g t h i s t h e o r e t i c a l d i s c u s s i o n , each indus-t r y i s again looked a t i n terms of the c h a r a c t e r i s t i c s r e s p o n s i b l e f o r i t s l o c a t i o n i n the province and the probable impact of f r e e trade on i t s s i z e . The author's c o n c l u s i o n i s th a t the impact of f r e e trade on secondary manu-f a c t u r i n g i n the province would be r a t h e r s m a l l because most i n d u s t r i e s i n t h i s category i n B.C. are r e l a t i v e l y h i g h l y market o r i e n t e d . As w i t h Ingram's a r t i c l e , i n t r a r e g i o n a l d i f f e r e n c e s i n manufacturing are not considered i n any systematic way. For a few i n d u s t r i e s mention i s made of the f a c t t h a t production i s concentrated i n Vancouver, but even here f a c t o r s accounting f o r t h e i r i n t r a p r o v i n e i a l d i s t r i b u t i o n are not mentioned. An a r t i c l e w r i t t e n by McGovern (1967) i s a d e t a i l e d study of i n d u s t r i a l a c t i v i t y i n Greater Vancouver, the province's dominant i n d u s t r i a l area. F i r s t of a l l the author discusses some of the general f a c t o r s which have b e n e f i t e d (e.g. p r o t e c t i o n o f f e r e d by distance from e a s t e r n Canada, prox-i m i t y t o raw m a t e r i a l s , comparatively low water c o s t s , r a p i d l y growing l o c a l 8 market) or l i m i t e d (e.g. high d i s t r i b u t i o n c o s t s , high c o s t s of s e r v i c e d i n d u s t r i a l l a n d , h i g h labour c o s t s and poor labour-management r e l a t i o n s h i p s ) i n d u s t r i a l development i n Vancouver. Comparing the i n d u s t r y s t r u c t u r e of Vancouver w i t h t h a t of a l l of Canada enables the i d e n t i f i c a t i o n of indus-t r i e s i n which Vancouver i s r e l a t i v e l y s p e c i a l i z e d . R e l a t i v e t o the coun-t r y as a whole, Vancouver i s s p e c i a l i z e d i n "the f i r s t stage processing of raw m a t e r i a l s " ( i b i d . , 192). The importance of t h i s type of manufacturing i s p a r t i c u l a r l y apparent when a comparison i s made w i t h the Toronto area, " g e n e r a l l y recognized as the most d i v e r s i f i e d secondary manufacturing r e -gion i n Canada" ( i b i d . ) . In Vancouver i n 1956, 35$ of manufacturing em-ployment was engaged i n primary p r o c e s s i n g , whereas the corresponding Toronto f i g u r e was Q%. Using the r e s u l t s of a 1958 survey of i n d u s t r i a l f i r m s i n Greater Vancouver, McGovern i d e n t i f i e s those i n d u s t r i e s which are p r i m a r i l y en-gaged i n s e r v i n g markets outside B.C. (plywood m i l l s , f i s h p r o c e s s i n g , saw-m i l l s ) and those which are p a r t i c u l a r l y dependent on the p r o v i n c i a l market (petroleum r e f i n i n g , n o n -metallic mineral and chemical products, d a i r y products and other food and beverage i n d u s t r i e s w i t h the exception of f r u i t and vegetable canning, t r a n s p o r t a t i o n equipment and metal p r o d u c t s ) . F i n a l l y a book by Cohn (195U), while not de a l i n g w i t h B r i t i s h Columbia, s t u d i e s the l o c a t i o n of manufacturing i n the a d j o i n i n g p a r t of the United S t a t e s , the P a c i f i c Northwest S t a t e s of Washington, Oregon, Idaho and west-ern Montana. T h i s region's s i m i l a r i t i e s w i t h B.C. i n terms of resources and p e r i p h e r a l l o c a t i o n r e l a t i v e t o major markets have r e s u l t e d i n a manu-f a c t u r i n g s t r u c t u r e which resembles that of B.C. (This i s perhaps l e s s true now than at the time the book was w r i t t e n by Cohn because the f o o t l o o s e a i r -c r a f t i n d u s t r y , w h i l e very small i n B.C., has grown t o a poi n t of dominance of Washington's manufacturing i n d u s t r y . ) Cohn c l a s s i f i e s the types of i n -d u s t r i e s present i n the Northwest as resource o r i e n t e d , i n d u s t r i e s engaged i n f u r t h e r f a b r i c a t i o n of t h e n a t u r a l resources, i n d u s t r i e s which are con-cerned w i t h supplying the resource-based i n d u s t r i e s w i t h i n p u t s , consumer o r i e n t e d i n d u s t r i e s and f o o t l o o s e i n d u s t r i e s ( i b i d . , U2-UU). Each of these i n d u s t r y c a t e g o r i e s i s then t r e a t e d i n d i v i d u a l l y . For some cat e g o r i e s a d i s a g g r e g a t i o n i n t o i n d i v i d u a l a c t i v i t i e s i s undertaken, and an e x p l a n a t i o n i s given f o r the p a r t i c u l a r i n d u s t r y ' s presence i n the P a c i f i c Northwest. For other c a t e g o r i e s c e r t a i n i n d u s t r i e s are chosen as examples t o i l l u s t r a t e general l o c a t i o n a l f a c t o r s which have encouraged the establishment of a group of i n d u s t r i e s i n the r e g i o n . Cohn i s more i n t e r e s t e d i n e x p l a i n i n g why i n d u s t r i e s l o c a t e i n the P a c i f i c Northwest i n general t han why they l o -cate i n s p e c i f i c subregions w i t h i n the l a r g e r r e g i o n . At the manufacturing i n d u s t r y l e v e l data are presented only f o r the r e g i o n as a whole except i n one t a b l e ( i b i d . , I4.6, Table 5) which shows the p r o p o r t i o n of i n d u s t r y group employment i n the r e g i o n accounted f o r by S e a t t l e and P o r t l a n d . Having examined b r i e f l y these r e l a t e d s t u d i e s , i t i s now p o s s i b l e t o r e s t a t e the reasons f o r undertaking t h i s study. As noted by Denike and L e i g h (o£. c i t . , 7k) "most previous s t u d i e s o f f e r e d a r a t h e r s t y l i z e d view of the complex B.C. economy, and o n l y roughly d e l i n e a t e d the r e g i o n . The question of geographical d i s t r i b u t i o n i n p a r t i c u l a r needs t o be r a i s e d . " . Their study i s s u c c e s s f u l i n showing the r e g i o n a l c h a r a c t e r i s t i c s of the province i n terms of the s t r u c t u r e , growth and stage of development of the economy i n g e n e r a l . I t i s f e l t , however, that i t i s worthwhile t o look s p e c i f i c a l l y at the manufacturing s e c t o r of the p r o v i n c i a l economy from a r e g i o n a l standpoint. Very l i t t l e study of the province's secondary manu-f a c t u r i n g i n d u s t r i e s has been undertaken, a p o i n t mentioned by Munro (op. 10 c i t . , 89): " I n c o n t r a s t t o the t r a d i t i o n a l export i n d u s t r i e s , v e r y l i t t l e has been w r i t t e n about the province's other manufacturing i n d u s t r i e s . " . . Although Munro's a r t i c l e has f i l l e d an important gap he was not able t o c o l l e c t data f o r a l l the secondary i n d u s t r i e s , and moreover h i s study was not concerned w i t h r e g i o n a l d i f f e r e n c e s i n manufacturing s t r u c t u r e . I t i s hoped t h a t t h i s t h e s i s w i l l c o n t r i b u t e to the work a l r e a d y done on B.C. manufacturing by p r o v i d i n g a d e t a i l e d i n v e n t o r y , both of the r e g i o n a l d i s -t r i b u t i o n and of recent r e g i o n a l growth p a t t e r n s of a l l manufacturing i n -d u s t r i e s , both resource processing and " o t h e r " . O r g a n i z a t i o n of the Study The purpose of Chapter I I i s to provide a t h e o r e t i c a l framework around which much of the r e s t of the theses i s based. Combining themes from l o -c a t i o n a n a l y s i s and r e g i o n a l development, a model i s produced t h a t takes e x p l i c i t l y i n t o account the r e l a t i o n s h i p between the importance of c e r t a i n groups of i n d u s t r i e s i n a r e g i o n a l economy and the supposed m a t u r i t y of the i n d u s t r i a l s t r u c t u r e of the r e g i o n , where i t i s argued that the appearance of new i n d u s t r y groups i n a r e g i o n i s i n d i c a t i v e of the r e g i o n ' s e n t e r i n g more advanced "stages" of manufacturing development. I n a d d i t i o n , the model considers the s i t u a t i o n of a r e g i o n composed of subregions at d i f f e r e n t l e v e l s of i n d u s t r i a l m a t u r i t y . I t i s shown how the growth of one type of manufacturing (e.g. primary processing) i n one subregion may encourage the growth of a l i n k e d type of manufacturing i n a second subregion (e.g. indus-t r i e s supplying inputs t o primary processing i n d u s t r i e s ) . Furthermore the i n h i b i t i n g e f f e c t of one subregion on the establishment of a p a r t i c u l a r type of i n d u s t r y i n another subregion, and t h e r e f o r e on the process of indus-t r i a l maturing of that r e g i o n , i s mentioned. The r e g i o n and subregions d i s -11 cussed by the model are h y p o t h e t i c a l , but they have c h a r a c t e r i s t i c s t y p i c a l of an area whose economic h i s t o r y i s l i k e t h a t of B.C. In order t o put the data to be presented i n subsequent chapters i n p e r s p e c t i v e , Chapter I I I shows the importance of manufacturing i n the B r i t -i s h Columbia economy r e l a t i v e t o i t s importance i n other p a r t s of Canada, on a year-by-year b a s i s f o r the 1960's. In a d d i t i o n , u s i n g 1961 census data i t i s shown t h a t manufacturing i s of markedly d i f f e r e n t s i g n i f i c a n c e from one r e g i o n i n B.C. to another. Chapter IV i s concerned w i t h the p r e s e n t a t i o n and a n a l y s i s of data p e r t a i n i n g to the s t r u c t u r e of manufacturing i n the province as a whole. Value of shipments o f goods of own manufacture f o r the year 1967 i s t h e c r i t e r i o n used. Data have been c o l l e c t e d from DBS sources, but f o r many i n d u s t r i e s no s t a t i s t i c s were p u b l i s h e d , and i t was necessary t o estimate the value of goods shipped. The e s t i m a t i o n procedure i s de s c r i b e d i n the chap-t e r . B.C.'s manufacturing s t r u c t u r e i s compared w i t h that of the n a t i o n as a whole, and p r i n c i p l e s of l o c a t i o n theory are used t o e x p l a i n why c e r t a i n i n d u s t r i e s are overrepresented i n B.C. while others are underrepresented. Data on the d e s t i n a t i o n s of B.C.'s manufacturing shipments are a l s o pre-sented. The l a s t p a r t of Chapter IV i s a c l a s s i f i c a t i o n of i n d u s t r i e s , where the c h a r a c t e r i s t i c s of the c l a s s e s are suggested by the t h e o r e t i c a l framework developed i n Chapter I I . On the b a s i s of i t s i n d u s t r y s t r u c t u r e ( i n terms of the r e l a t i v e importance of the v a r i o u s i n d u s t r y groups) the province i s compared w i t h the h y p o t h e t i c a l r e g i o n of Chapter I I at v a r i o u s "stages" of i t s manufacturing development to f i n d which "stage" best de-s c r i b e s the province i n 1967. In Chapter V the s t a t i c approach of the preceding chapter i s continued. The purpose of Chapter V i s t o present and i n t e r p r e t data p e r t a i n i n g to the 12 manufacturing s t r u c t u r e s of the regions of the p r o v i n c e . F i r s t of a l l graphs are used to show simply the presence or absence of i n d i v i d u a l manu-f a c t u r i n g i n d u s t r i e s w i t h i n the r e g i o n s . This i s f o l l o w e d by the presen-t a t i o n of value of shipments data f o r i n d u s t r i e s by r e g i o n s , most of which were estimated by methods described i n the c h a p t e r . I n d u s t r i e s are grouped i n t o the same c l a s s e s as f o r the province as a whole i n the preceding chap-t e r , and much of the remainder of Chapter V i s an i n t e r p r e t a t i o n of the value of shipments data i n terms of the d i s t r i b u t i o n of i n d u s t r i e s and groups of i n d u s t r i e s among the r e g i o n s of the province. In the second l a s t s e c t i o n of the chapter an index i s devised whereby the l e v e l of manufac-t u r i n g development of regions can be compared w i t h each other and w i t h the province as a whole i n a q u a n t i t a t i v e manner. In both of the preceding chapters the -data presented are f o r a s i n g l e year, 1967. There i s a change i n approach i n Chapter VI which deals w i t h the nature of growth of manufacturing i n the province and the regions from 1961 to 1967. R e l a t i v e l y complete data are p u b l i s h e d by the DBS f o r changes i n employment i n manufacturing i n d u s t r i e s by r e g i o n (where these changes are discounted by the amount of growth i n employment which would be expected had the i n d u s t r y i n the r e g i o n grown a t the same r a t e as i t d i d i n a l l of Canada) f o r t h i s s i x - y e a r time p e r i o d . The changes i n employment i n manu-f a c t u r i n g i n d u s t r i e s by r e g i o n are then aggregated by i n d u s t r y c l a s s , and these data are i n t e r p r e t e d i n terms of such t h i n g s as changing access to markets and m a t e r i a l s which would make regions r e l a t i v e l y more or l e s s f a -vourable as l o c a t i o n s f o r s p e c i f i c i n d u s t r i e s . F i n a l l y an index i s d e v e l -oped t o measure f o r each r e g i o n the extent to which s t r u c t u r a l change ex-perienced during the 1961-1967 time p e r i o d tended t o increase the m a t u r i t y of the region's manufacturing economy or t o p u l l the r e g i o n back to a more 13 elementary l e v e l of manufacturing development. Chapter V I I , the concluding chapter, f i r s t summarizes the r e s t a t e d major purposes of the t h e s i s and discusses some of the f i n d i n g s of the study i n terms of whether or not they were expected, g i v e n previous s t u d i e s and general knowledge of the economic geography of the p r o v i n c e . The second pa r t discusses some of the l i m i t a t i o n s of the t h e s i s and suggests areas where f u r t h e r research could be undertaken. Sources of Data The purpose of t h i s s e c t i o n i s t o comment on two of the major sources of data that are used i n the t h e s i s . The nature of the data and the methods used to c o l l e c t and generate them are discussed along w i t h two p a r t i c u l a r l i m i t a t i o n s of the f i r s t p u b l i c a t i o n . Not considered i n t h i s s e c t i o n are l i m i t a t i o n s of the p u b l i c a t i o n s f o r use because of the w i t h h o l d i n g of c e r -t a i n s t a t i s t i c s f o r reasons of c o n f i d e n t i a l i t y . This problem, along w i t h the methods used t o circumvent i t , are discussed i n the chapters where the p a r t i c u l a r data source i s used. A l s o t o be discussed i n t h i s s e c t i o n are the reasons why a t h i r d data source was considered f o r use but was f i n a l l y r e j e c t e d . In Chapter IV the major document used i s the DBS p u b l i c a t i o n D e s t i n a -t i o n of Shipments of Manufacturers (1967). This survey shows f o r each manu-f a c t u r i n g i n d u s t r y i n each province of Canada the value of shipments of goods of own manufacture destined f o r markets w i t h i n the province of manu-f a c t u r e , f o r markets i n each of the other nine provinces and i n the Yukon and Northwest T e r r i t o r i e s combined, and f o r markets i n a l l f o r e i g n c o u n t r i e s combined, f o r the year 1967. Since the shipments of manufactured goods from province A t o province B are of course the same as the purchases of I i i manufactured goods by province B from province A, i t i s a l s o p o s s i b l e u s i n g t h i s p u b l i c a t i o n t o determine the t o t a l value of goods of a p a r t i c u l a r i n -d u s t r y consumed w i t h i n a p a r t i c u l a r province shipped to i t by a l l Canadian manufacturers. As s t a t e d i n the i n t r o d u c t i o n to the survey ( i b i d . , 5), "the universe to be measured contained 33,267 establishments [jwhose major a c t i v i t y was manufacturing]". Questionnaires were not mailed to a l l manu-f a c t u r i n g establishments. The smaller establishments whose 1967 shipments were l e s s than $100,000 (as rep o r t e d by the 1967 Census of Manufacturers), and i n some cases l e s s than $2^0,000, were g e n e r a l l y not sent q u e s t i o n n a i r e s as i t was f e l t that these establishments would s h i p very l i t t l e across p r o v i n c i a l boundaries. Estimates of the d e s t i n a t i o n of shipments of the smaller establishments are, however, included i n the survey r e s u l t s . There are a number of l i m i t a t i o n s w i t h the data r e s u l t s . S i x are l i s t e d i n the p u b l i c a t i o n ' s i n t r o d u c t i o n ( i b i d . , 6 ) , but two are discussed here because they have p a r t i c u l a r relevance to the way the data are used i n t h i s t h e s i s . The f i r s t l i m i t a t i o n deals w i t h d i f f e r e n c e s i n the d e f i -n i t i o n of t o t a l value of shipments of goods of own manufacture i n t h i s p u b l i c a t i o n from the p u b l i c a t i o n s of the Census of Manufacturers. D e s t i n a -t i o n of Shipments of Manufacturers excludes a d v e r t i s i n g and r e p a i r revenues from the value of shipments. I n the t a b l e s of value of shipments f o r pro-v i n c i a l and r e g i o n a l manufacturing establishments (Tables V and X I I , i n t h i s t h e s i s ) these types of revenue are i n c l u d e d . F o l l o w i n g Table V I , which i n -d i c a t e s the p r o p o r t i o n of goods shipped by B.C. i n d u s t r i e s t o each of f i v e geographical d e s t i n a t i o n s , based on value of shipments f i g u r e s excluding a d v e r t i s i n g and r e p a i r revenues, the i n d u s t r i e s a f f e c t e d by the d i f f e r e n c e i n d e f i n i t i o n are l i s t e d . For each of these i n d u s t r i e s the value of s h i p -ments minus a d v e r t i s i n g or r e p a i r revenue i s d i v i d e d by t o t a l value of 15 shipments t o i n d i c a t e a percentage showing the p r o p o r t i o n of the t o t a l i n -dustry's shipments which can be a l l o c a t e d t o s p e c i f i c geographical d e s t i n a -t i o n s . The second l i m i t a t i o n of D e s t i n a t i o n of Shipments of Manufacturers i s the f a c t that manufacturing establishments are only asked t o r e p o r t the f i r s t d e s t i n a t i o n of t h e i r goods. I n the case of B r i t i s h Columbia i t i s noted t h a t t h i s f i r s t - d e s t i n a t i o n c r i t e r i o n r e s u l t s almost c e r t a i n l y i n a f i g u r e f o r shipments of B.C. sawmills to markets w i t h i n B.C. which i s too h i g h . This i s because " I t i s known that l a r g e amounts of lumber are s o l d by secondary d i s t r i b u t o r s i n the province and t h a t much of the lumber so s o l d u l t i m a t e l y reaches markets i n other c o u n t r i e s . " ( i b i d . , 8 ) . Even w i t h these l i m i t a t i o n s t h i s source gives a good p i c t u r e of the t r a d i n g p a t t e r n s of manufacturing i n d u s t r i e s i n B.C. The major data source used i n Chapter VI t o analyze employment growth by i n d u s t r y and r e g i o n i n B.C. i s Growth Pat t e r n s i n Manufacturing Employ-ment by Counties and Census D i v i s i o n s (l°6l-l Q67). This i s an a n a l y s i s of changes i n manufacturing employment using a technique c a l l e d s h i f t and share a n a l y s i s . T h i s i s discussed using mathematical terminology i n Chapter V I . Employment f i g u r e s are given f o r a l l manufacturing i n d u s t r i e s i n Canada f o r 1961 and 1967. These are taken from the Census of Manufacturers and are averages f o r the calendar year. Growth r a t e s f o r the n a t i o n as a whole are determined f o r each of the manufacturing i n d u s t r i e s . For each i n d u s t r y i n each r e g i o n of the country (B.C. i s d i v i d e d i n t o 10 census d i v i s i o n s ) the n a t i o n a l growth r a t e i s m u l t i p l i e d by 1961 employment t o determine the num-ber of new jobs which the r e g i o n would have to have i f i t was to have grown at the same r a t e as the n a t i o n as a whole. This number of new jobs i s then subtracted from the a c t u a l number of new jobs i n the i n d u s t r y i n the r e g i o n 16 t o determine what i s known as the " r e g i o n a l component". These r e g i o n a l components f o r a l l i n d u s t r i e s i n a r e g i o n are summed to give the " r e g i o n a l share". A t t e n t i o n then turns from the i n d i v i d u a l i n d u s t r i e s t o the a l l - i n d u s t r y t o t a l s i n the n a t i o n and the r e g i o n s . The o v e r a l l growth ra t e i n a l l manu-f a c t u r i n g i n d u s t r i e s i n the n a t i o n i s m u l t i p l i e d by the 1961 employment i n a l l manufacturing i n d u s t r i e s i n each of the regions to determine the t o t a l number of new jobs the r e g i o n would have t o have generated f o r i t s e n t i r e manufacturing s e c t o r t o have grown at the same r a t e as the n a t i o n as a whole. S u b t r a c t i o n from the a c t u a l number of new jobs i n manufacturing give s the "net r e l a t i v e change" i n manufacturing employment. S u b t r a c t i n g the r e g i o n a l share from the net r e l a t i v e change y i e l d s the " i n d u s t r y mix share" which i n d i c a t e s whether the r e g i o n tended to s p e c i a l i z e i n n a t i o n a l l y f a s t or slow growth i n d u s t r i e s . U n f o r t u n a t e l y there are no data as yet published by the DBS on the r e -g i o n a l d i s t r i b u t i o n of i n d i v i d u a l manufacturing i n d u s t r i e s since 1967. An annual p u b l i c a t i o n of the p r o v i n c i a l government, I n d u s t r i a l Expansion i n  B r i t i s h Columbia was considered as a p o s s i b l e data source f o r r e g i o n a l changes i n i n d u s t r i a l s t r u c t u r e s i n c e 1967. I t l i s t s a n n u a l l y manufacturing (as w e l l as primary i n d u s t r y and commercial) p r o j e c t s completed, underway and proposed, by r e g i o n i n B.C. Included are the name of the company, the l o c a t i o n (town), the amount of investment i n d o l l a r s , the main products produced, a d e s c r i p t i o n of the nature of the investment ( i . e . a nextf estab-lishment, an enlargement of the e x i s t i n g p l a n t , a purchase of new machinery or a replacement p r o j e c t ) and the number of new employees. U n f o r t u n a t e l y i t was found t h a t t h i s data source was q u i t e incomplete i n t h a t i t d i d not e i t h e r r e p o r t a l l manufacturing p r o j e c t s , and/or d i d not 17 re p o r t a c t u a l d o l l a r amounts of investment f o r a l l the p r o j e c t s l i s t e d . Examples f o r two years w i l l i l l u s t r a t e . According to the j o i n t DBS-Depart-ment of Ind u s t r y , Trade and Commerce p u b l i c a t i o n P r i v a t e and P u b l i c I n v e s t -ment i n Canada; Outlook and Regional Estimates (1970), which l i s t s a c t u a l c a p i t a l and r e p a i r expenditures f o r a l l manufacturing establishments (as w e l l as other types of f i r m s ) f o r 1968 (based on a survey of major f i r m s and imputed expenditures f o r smaller f i r m s ) , t o t a l investment by B.C. manu-f a c t u r i n g f i r m s i n 1968 was $352,500,000 ( i b i d . , Table 22). U n f o r t u n a t e l y the investment f i g u r e s have only been broken down i n t o seven S.I.C. groups. According t o I n d u s t r i a l Expansion i n B r i t i s h Columbia (1968) the t o t a l value of c a p i t a l investment which could be a l l o c a t e d to f i r m s which completed i n -vestment p r o j e c t s i n 1968 was only $122,550,000. Pa r t of t h i s discrepancy may be due to the e x c l u s i o n of r e p a i r expenditures from the p r o v i n c i a l pub-l i c a t i o n (although i t i s not e x p l i c i t l y s t a t e d t h a t these expenditures are excluded). Even, however, i f r e p a i r expenditures (which are t a b u l a t e d sep-a r a t e l y i n P r i v a t e and P u b l i c Investment i n Canada) are sub t r a c t e d , c a p i t a l expenditures by manufacturing f i r m s i n B.C. f o r 1968 were $201*,500,000. In 1969 the d i f f e r e n c e between the corresponding f i g u r e s from I n d u s t r i a l Expan-s i o n i n B r i t i s h Columbia (1969) and P r i v a t e and P u b l i c Investment i n Canada (1971) was even g r e a t e r . R e s p e c t i v e l y the investment f i g u r e s ( r e p a i r ex-penditures excluded) were $127,839,000 and $309,800,000. Turning t o the f i g u r e s d e a l i n g w i t h the number of new employees, included i n I n d u s t r i a l  Expansion i n B r i t i s h Columbia, the number of f i r m s r e p o r t i n g was even l e s s than the number which reported c a p i t a l investment data. The incompleteness of the data was one reason why i t was decided not to use I n d u s t r i a l Expansion i n B r i t i s h Columbia as a source of recent trends i n r e g i o n a l manufacturing growth. Throughout the r e s t of the t h e s i s every 18 attempt has been made to f i n d s t a t i s t i c s which give a complete d e s c r i p t i o n of manufacturing i n B.C. i n terms of the r e g i o n a l d i s t r i b u t i o n of t o t a l manufacturing a c t i v i t y , the r e g i o n a l d i s t r i b u t i o n of i n d i v i d u a l i n d u s t r i e s and the r e g i o n a l d i s t r i b u t i o n of s t r u c t u r a l change i n manufacturing. A f u r t h e r reason why the data from the p r o v i n c i a l p u b l i c a t i o n were not used p e r t a i n s to the f a c t that they deal o n l y w i t h the gross increase i n manufacturing a c t i v i t y i n regions over time. No account i s taken of the f a c t t h a t ivrhile a region's manufacturing s t r u c t u r e i s changing by the ex-pansion of e x i s t i n g f i r m s and the establishment of new f i r m s , i t i s a l s o changing by the c o n t r a c t i o n and c l o s u r e of other f i r m s . As i s shown i n Chapter VI the d e c l i n e of i n d u s t r i e s i n a c e r t a i n r e g i o n may be a major f a c t o r i n the change i n manufacturing s t r u c t u r e i n that r e g i o n . CHAPTER I I THEORETICAL FRAMEWORK: A MODEL OF REGIONAL INDUSTRIAL DEVELOPMENT AND CHANGING MANUFACTURING STRUCTURE D i f f e r e n c e s i n manufacturing among the regions of B.C. are examined i n t h i s t h e s i s i n terms of the l e v e l of complexity of the r e g i o n a l indus-t r i a l s t r u c t u r e s ( i . e . i n terms of the breakdown of r e g i o n a l manufacturing a c t i v i t y among a s e r i e s of ranked i n d u s t r y t y p e s ) . The purpose o f t h i s chapter i s t o i n d i c a t e the b a s i s f o r the c l a s s i f i c a t i o n and ranking of i n -d u s t r i e s t o be used i n f o l l o w i n g chapters. A hypothesis suggested by r e -g i o n a l development theory, t h a t as a r e g i o n grows i t acquires new types of manufacturing a c t i v i t i e s , w i l l be used here t o create a model of changing i n d u s t r i a l s t r u c t u r e i n terms of a number of stages defined by the presence or absence of i n d u s t r y types. These stages provide the r a t i o n a l e of the i n -d u s t r i a l c l a s s i f i c a t i o n to be used f o r B.C.'s regi o n s . P r i o r t o p r e s e n t i n g the model some comments w i l l be made p e r t a i n i n g t o the o r i g i n s and develop-ment of the theory used. Two t h e o r i e s of r e g i o n a l development which take account of the r e l a -t i o n s h i p between l e v e l of development and i n d u s t r i a l s t r u c t u r e i n a r e g i o n are the development stages theory and the export base theory. These theo-r i e s are discussed and compared w i t h each other by Parr (1970, 122-130), Richardson (1969, 336-3U1) and Thomas (196U). Development stages theory, which according to Thomas ( i b i d . , 1*23) stems l a r g e l y from e m p i r i c a l obser-v a t i o n s made by C l a r k (19U0) and F i s h e r (1933, 1939), s t a t e s t h a t as per c a p i t a income grows over time the p r o p o r t i o n spent on the products of eco-nomic sec t o r s changes. This i s due p a r t i a l l y t o the operation of Engel's law which s t a t e s t h a t as per c a p i t a income grows low income e l a s t i c i t y of demand f o r a g r i c u l t u r a l products w i l l mean th a t i n i t i a l l y " an i n c r e a s i n g 2 0 p r o p o r t i o n of t o t a l income w i l l be spent on manufactured goods. S i m i l a r l y as per c a p i t a income continues to grow a higher and higher p r o p o r t i o n w i l l be spent on s e r v i c e s . (As Richardson (op_. c i t . , 3Ul) s t a t e s , the emphasis which development stages theory gives t o increases i n per c a p i t a income se v e r e l y l i m i t s i t s usefulness as an explanatory theory of economic growth.) On the supply side the s h i f t i n emphasis from a g r i c u l t u r e t o manufacturing and then t o s e r v i c e i n d u s t r i e s i s r e i n f o r c e d . Advances i n p r o d u c t i v i t y are argued to be greater i n secondary and t e r t i a r y i n d u s t r i e s than i n a g r i c u l -t u r e p o s s i b l y as a r e s u l t of economies as s o c i a t e d w i t h r a p i d l y i n c r e a s i n g demand. Export base theory d i v i d e s the economy i n t o two s e c t o r s — b a s i c or ex-por t i n d u s t r i e s , which s e l l t h e i r products i n e x t e r n a l markets beyond the r e g i o n a l boundaries, and non-basic or r e s i d e n t i a r y i n d u s t r i e s , which s e l l t h e i r products w i t h i n the r e g i o n ( i . e . t o l o c a l consumers and l o c a l indus-t r i e s ) . Growth i n the r e g i o n i s due t o an increase i n demand f o r the prod-u c t s of b a s i c i n d u s t r i e s which has a m u l t i p l i e r e f f e c t on r e g i o n a l income, where the m u l t i p l i e r at a c e r t a i n p e r i o d of time depends on the base r a t i o , which i s e q u i v a l e n t t o income (or employment) i n the r e s i d e n t i a r y i n d u s t r i e s d i v i d e d by the corresponding measure i n the b a s i c i n d u s t r i e s . The model t o be presented draws much more h e a v i l y on export base theory than on development stages theory f o r two r e l a t e d reasons. F i r s t l y the l e v e l of r e g i o n a l economic development w i l l be considered i n terms of l e v e l s of a g g r e g a t e s — i n terms of absolute income and p o p u l a t i o n , f o r example, ra t h e r than l e v e l s of per c a p i t a income. Therefore i n the model two regions may be at d i f f e r e n t l e v e l s of development and yet have the same per c a p i t a income. I t w i l l not be assumed t h a t c e r t a i n i n d u s t r i a l s e c t o r s are i n h e r -e n t l y more productive than ot h e r s . Over time r e g i o n a l growth w i l l be 21 thought of p a r t i c u l a r l y i n terms of growth i n aggregates, although the e f -f e c t of t e c h n o l o g i c a l progress (which would increase per c a p i t a income) w i l l a l s o be considered. Moore (1971, 8) c a l l s growth i n aggregate income and pop u l a t i o n "extensive" growth. The development stages theory s t r e s s e s " i n -t e n s i v e " growth or growth i n per c a p i t a income and seems to imply t h a t there i s a r e l a t i o n s h i p between the i n d u s t r i a l s t r u c t u r e of an economy and per c a p i t a income. Export base theory, on the other hand, by emphasizing the r 8 l e of i n t e r i n d u s t r i a l l i n k a g e (due to expanding b a s i c s e c t o r demand) i n the changing i n d u s t r i a l s t r u c t u r e of a r e g i o n i s concerned w i t h extensive growth. Secondly by f o c u s s i n g on income e l a s t i c i t y of demand the development stages theory i s not c l e a r as to whether s t i m u l i t o r e g i o n a l growth and changes i n i n d u s t r i a l s t r u c t u r e are due to i n t e r n a l or e x t e r n a l f o r c e s . P a r r (op_. c i t . , 129), who regards the stages theory as "a long-term view of the export base theory" s t r e s s i n g changes i n the base, i n t e r p r e t s stages theory i n an i n t e r r e g i o n a l framework ( i b i d . , 128-129). The e f f e c t of low income e l a s t i c i t y of demand f o r a region's exports encourages the r e g i o n t o s h i f t from one s e c t o r to another. P a r r a l s o f e e l s that a s h i f t may be brought about by i n t e r r e g i o n a l competition. At one p e r i o d of time one r e -gion i n a system of regions may be a t the f a b r i c a t i v e manufacturing stage, whereas the other regions are at l e s s advanced stages. Over time, however, the spread of i n d u s t r i a l development may reduce the competitiveness of the f i r s t r e g i o n . Exports of manufactured goods from the f i r s t r e g i o n would f a l l , and the r e g i o n would be f o r c e d i n t o a new s p e c i a l i z a t i o n , which ac-cording t o P a r r ' s i n t e r p r e t a t i o n of the theory would be t e r t i a r y a c t i v i t i e s . ( I t i s not c l e a r , however, u s i n g t h i s i n t e r r e g i o n a l competition argument, why a r e g i o n i n i t i a l l y s p e c i a l i z i n g i n f a b r i c a t i v e manufacturing might not 22 s h i f t "backwards" t o resource o r i e n t e d manufacturing i f i t s exports of f i n -i shed manufactured goods co u l d not compete w i t h those of other r e g i o n s . ) On the other hand, Richardson (op. c i t . , 3Ul) understands stages theory to be completely based on developments w i t h i n the r e g i o n . The s h i f t i n em-phasis from a g r i c u l t u r e t o manufacturing i s based on low income e l a s t i c i t y of demand, not as Pa r r suggests i n the region's export markets, but w i t h i n the r e g i o n i t s e l f . Since trade i s not taken i n t o account, Richardson ( i b i d . ) s t a t e s t h a t the stages theory i s "more u s e f u l the greater the degree of s e l f - s u f f i c i e n c y i n the economy". The C l a r k - F i s h e r hypothesis, according to Richardson ( i b i d . , 3h0) d e a l t s p e c i f i c a l l y w i t h low income e l a s t i c i t y of demand and d i m i n i s h i n g r e t u r n s i n one primary s e c t o r , a g r i c u l t u r e . This i s obviously the only primary s e c t o r on which s e l f - s u f f i c i e n c y can be based. The theory could not be used as an e x p l a n a t i o n of growth i n a r e g i o n i n i -t i a l l y based on the e x p l o i t a t i o n of f o r e s t s , mines or f i s h e r i e s , where trade would have t o be taken i n t o account. Thomas (op_. c i t . , 1*26) agrees w i t h Richardson t h a t the stages theory i n i t s "unmodified" form disregards e x t e r n a l s t i m u l i t o growth and i s t h e r e -f o r e a p p l i c a b l e t o l a r g e s e l f - s u f f i c i e n t r e g i o n s . In h i s a r t i c l e , however, Thomas ( i b i d . , 1*23) does mention t h a t the stages theory has been r e f i n e d t o inc l u d e e x t e r n a l trade by " i n c o r p o r a t i n g elements from the theory of the l o -c a t i o n of i n d u s t r i e s " . Thus i f a r e g i o n has a f a v o r a b l e l o c a t i o n i t can grow by importing raw m a t e r i a l s , p r o c e s s i n g them and s e l l i n g them both i n -t e r n a l l y and e x t e r n a l l y . I t can be argued t h a t the unmodified stages theory i s u s e f u l i n e x p l a i n i n g growth i n the very l o n g run i n a v e r y l a r g e area (a continent or the world i t s e l f , which i s of course economically s e l f - s u f -f i c i e n t ) or i n a very i s o l a t e d area where trade i s not f e a s i b l e . The r e -f i n e d stages theory i s , however, a p p l i c a b l e i n the sho r t e r run and on a 23 smaller a r e a l s c a l e , and e x p l a i n s how the interdependent regions of the whole can undergo t h e i r own stages of development ( i . e . regions may be un-dergoing changes i n t h e i r stage of development while the world as a whole remains at the same o v e r a l l s t a g e ) . The export base theory i s not at a l l ambiguous i n the key r o l e i t gives to e x t e r n a l f o r c e s i n promoting r e g i o n a l growth. As such i t i s w e l l s u i t e d to the study of open economies, p a r t i c u l a r l y i n t h e i r i n i t i a l p e r i o d of growth. The model used here i s meant to be a p p l i c a b l e t o a r e g i o n d e v e l -oping from resource e x p l o i t a t i o n where trade can occur r e l a t i v e l y e a s i l y . As a r e s u l t there i s no n e c e s s i t y or st r o n g i n c e n t i v e f o r the r e g i o n t o aim f o r s e l f - s u f f i c i e n c y , e s p e c i a l l y i n i t s e a r l y development. Although the export base approach r a t h e r t h a t the stages approach w i l l be used i n the model, a t t e n t i o n w i l l a l s o be p a i d t o aspects of the develop-ment process which base theory e i t h e r ignores or w i t h which i t i s not per-haps s u f f i c i e n t l y concerned. These i n c l u d e such things as import s u b s t i t u -t i o n ( f o r example the establishment of consumer o r i e n t e d i n d u s t r i e s inde-pendently of growth i n the export base, when the market reaches a s u f f i c i e n t s i z e ) , the s p a t i a l changes i n manufacturing a c t i v i t y w i t h i n the r e g i o n as development proceeds, and the i n t e r r e g i o n a l t r a n s m i s s i o n of development ( s p e c i f i c a l l y the t r a n s m i s s i o n of growth among regions a t v a r i o u s stages of development w i t h i n a r e g i o n a l system). I n the model, w i t h one exception to be noted l a t e r , the government w i l l not be considered t o have a r o l e i n de-termi n i n g the i n d u s t r i a l s t r u c t u r e of the r e g i o n except i n terms of pur-chases from the manufacturing sector and promotion, i . e . by making b u s i -nessmen aware of the advantages the r e g i o n o f f e r s f o r p a r t i c u l a r manufac-t u r i n g a c t i v i t i e s . I t i s recognized t h a t d i f f e r e n t s i z e s of i n i t i a l p r i v a t e s e c t o r c a p i t a l investment i n the r e g i o n could a f f e c t the op e r a t i o n of the 2U model. Some of these cases w i l l be explored below. The model w i l l f i r s t of a l l be r e g i o n a l i n v i e w p o i n t — l i k e the t r a d i -t i o n a l export base approach. The world economy w i l l be d i v i d e d i n t o the r e g i o n and the r e s t of the world, which w i l l be considered homogeneous. Therefore no a t t e n t i o n w i l l be p a i d t o whether the r e g i o n "exports" i t s products t o a neighbouring area w i t h i n the same n a t i o n or whether i t ships i t s goods t o f o r e i g n c o u n t r i e s on the other side of the world. This p o i n t of view w i l l l a t e r be r e v i s e d t o the degree t h a t the r e g i o n w i l l be reex-amined as a system of subregions (making up a n a t i o n , or a l a r g e province w i t h i n a n a t i o n , f o r example). The subregions w i l l be considered t o be at d i f f e r e n t l e v e l s of development, and the impact of economic growth of one on another w i l l be considered. In the model i n order t o d e s c r i b e changes i n the r e g i o n a l i n d u s t r i a l s t r u c t u r e the word "stage" w i l l be employed. "Stage" i s used almost as a synonym of " s t a t e " of the i n d u s t r i a l economy. These "export base stages" w i l l be described i n terms of the nature of i n d u s t r i a l l i n k a g e s , the p r e s -ence of import s u b s t i t u t i n g i n d u s t r i e s , aid the market o r i e n t a t i o n of the v a r i o u s types of manufacturing a c t i v i t y found i n the r e g i o n . The degree of i n d u s t r y complexity used to define the stages of the model i s not necessar-i l y seen as an index of the o v e r a l l economic advancement of the area. In t h i s sense the hypothesis of the growing complexity of a r e g i o n a l i n d u s t r i a l economy over time i s more l i m i t e d than i n the parent r e g i o n a l development t h e o r i e s i n t h a t only manufacturing i s being considered. Moreover the types of i n d u s t r y c h a r a c t e r i s t i c of l a t e r stages i n t h i s model are not intended to be n e c e s s a r i l y more productive than the i n d u s t r y groups present at ear-l i e r or l e s s complex stages. (As was s t a t e d above, the d i f f e r e n c e i n the r a t e of p r o d u c t i v i t y increase among sectors i s , according t o the t r a d i t i o n a l 25 development stages theory, a f o r c e l e a d i n g t o the advancement of a r e g i o n i n t o a new stage.) I n t h i s model, however, the major f o r c e i n accounting f o r a region's p r o g r e s s i o n t o new stages of i n d u s t r i a l development i s seen l a r g e l y as the c r o s s i n g of v a r i o u s demand t h r e s h o l d s , w i t h the growth of consumer and producer markets f o r the region's i n d u s t r i e s . As w i l l be shown i n d e a l i n g w i t h the subregional model, the p r o g r e s s i o n of a r e g i o n from one stage t o another i s not i n e v i t a b l e and may i n f a c t be prevented or at l e a s t hindered g r e a t l y due t o competition from neighbouring, more developed r e -g i o n s . The "Stages" Stage 1 The f i r s t of the export base "stages" could be defined as the economic s t r u c t u r e a f t e r a f o r m e r l y uninhabited or s p a r s e l y s e t t l e d s e l f - s u f f i c i e n t r e g i o n acquired a market o r i e n t e d economy through the i n t r o d u c t i o n of com-m e r c i a l a g r i c u l t u r e or f i s h i n g , or the e x p l o i t a t i o n of f o r e s t s or m i n e r a l s . (The model i s concerned w i t h commercial economies, not p r i m i t i v e , s e l f - s u f -f i c i e n t economies. I n t h i s sense stage 1 i s not a t r a n s i t i o n between a non-market stage and a resource processing stage. Rather stage 1 does not occur u n t i l the region's economy i s b a s i c a l l y a commercial one.) Whether or not manufacturing a c t i v i t y would be present at t h i s i n i t i a l stage would depend on the nature of the primary a c t i v i t y i t s e l f . Thus, f o r example, i n the f o r e s t i n d u s t r y , processing of the raw m a t e r i a l might i n v o l v e such a degree of weight l o s s as to make i t necessary f o r sawmills t o be l o c a t e d i n c l o s e p r o x i m i t y t o the l o g g i n g areas. On the other hand, f i s h or wheat might be exported from the r e g i o n i n an unprocessed s t a t e at t h i s f i r s t stage. Figure 1 shows the manufacturing s t r u c t u r e of the r e g i o n i n stage 1. 26 Figure 1. The Industrial Structure of a Hypothetical Region in Stage 1 -Export Sector-Primary-Processing % of Manufacturing 100 Figure 2. The Industrial Structure of a Hypothetical Region in Stage 2 -Export Sector Local Primary Processing T3 <D N •H r-t CO o o 0 % of Manufacturing 100 27 Manufacturing a c t i v i t y ( i f i n f a c t any e x i s t e d at a l l ) would be of the p r i -mary processing type. At t h i s e a r l y stage the l o c a l s e c t o r would c o n s i s t of a few r e t a i l and s e r v i c e establishments i n one or more c e n t r e s . The number of centres would presumably depend on the d i s t r i b u t i o n of primary economic a c t i v i t y through-out the area. With a land u s i n g a c t i v i t y such as a g r i c u l t u r e , p o p u l a t i o n might be f a i r l y evenly d i s t r i b u t e d throughout the r e g i o n , and as a r e s u l t s e v e r a l centres might develop. In an a c t i v i t y such as mining, however, po p u l a t i o n might be concentrated at o n l y one or a few l o c a t i o n s . Only one centre might develop. At t h i s f i r s t stage the l o c a l ( r e s i d e n t i a r y ) s e c t o r would u s u a l l y c o n t a i n no manufacturing i n d u s t r i e s (a case where l o c a l i z e d manufacturing would be present from the outset w i l l be mentioned below). Manufactured goods consumed by the l o c a l p o p u l a t i o n would be imported. As such the degree of remoteness of the r e g i o n would p l a y a p a r t i n determining whether or not development of the export base was p o s s i b l e . The higher the cost of importing manufactured goods as w e l l as a g r i c u l t u r a l products not produced i n the r e g i o n , the higher would be the wage r a t e r e q u i r e d t o induce people to move to the area. This wage r a t e might r i s e t o a l e v e l that would make development very improbable (Tiebout, 196U, 260). Stage 2 Given t h a t exports of the region's raw or p a r t i a l l y processed m a t e r i a l s were growing, a p o i n t would be reached where some l o c a l s e c t o r manufacturing i n d u s t r i e s could become e s t a b l i s h e d . I n i t i a l l y these would be manufacturers of goods which r a r e l y are traded i n t e r r e g i o n a l l y , i . e . i n d u s t r i e s which have d i s t r i b u t i o n s s i m i l a r t o the p o p u l a t i o n as a whole because few economies of s c a l e , which would l e a d t o c o n c e n t r a t i o n , are p o s s i b l e (Hoover, 19U8, 37-38). P a r r (op_. c i t . , 123) s t a t e s that t h i s category would i n c l u d e such a c t i v i t i e s 28 as baking, a r t i f i c i a l ice manufacturing, soft drink bottling and certain types of printing. These manufacturing activities would tend to locate in the regional centres which formerly carried on only tertiary a c t i v i t y . De-pending on the state of transport technology and the size of the region, as well as whether or not a particularly favorable site in terms of access to the region as a whole and to outside suppliers and markets (since urban centres serve as collection points for the export of the region's materials as well as distribution centres for imported goods) existed, one of these regional centres might grow to be much larger than the others. Figure 2 shows the manufacturing structure at the second stage. There i s a sense in which stages 1 and 2 could occur "simultaneously". This could happen i f the i n i t i a l investment in resource processing were very large, i f the region were sufficiently isolated from outside sources of supply or i f localized industries were set up at the outset of commercial development in the region with a long-term view in mind. Institutional factors might play a part in hastening the appearance of localized indus-tr i e s . For example i f the model were to include the case in which there was large government intervention in regional economic development, i t would have to accommodate a situation in which relatively remote areas might be developed for p o l i t i c a l or strategic, as well as economic, reasons. In order to operate e f f i c i e n t l y from the start some products might have to be pro-duced lo c a l l y which i n less remote regions could be imported. On the other hand, as was stated i n the discussion of stage 1, i f a region produced raw materials which were subject to no processing before export from the region, the establishment of localized industries might be the f i r s t manufacturing activity in a region. Presumably i f resource ex-ploitation continued, a point might be reached where some of the raw mate-29 r i a l s would be processed w i t h i n the r e g i o n w h i l e others continued t o be ex-ported i n t h e i r unprocessed s t a t e . To the extent t h a t the i n c r e a s i n g tend-ency t o process raw m a t e r i a l s was o c c u r r i n g at the same time as the growth i n l o c a l i z e d i n d u s t r i e s , t h i s would be another case of stages 1 and 2 occur-r i n g simultaneously. Stage 3 What d i f f e r e n t i a t e s the t h i r d export base "stage" from the second i s the appearance of i n d u s t r i e s l i n k e d ( g e n e r a l l y by backward l i n k a g e s ) t o the export s e c t o r . Hirschman (1958, 101) discusses the s e t t i n g up of l i n k e d i n -d u s t r i e s i n a p r o b a b i l i s t i c framework. The existence of what he c a l l s the "master i n d u s t r y " ( i . e . the export s e c t o r ) w i l l l e a d t o the s e t t i n g up of n a d d i t i o n a l i n d u s t r i e s w i t h value of net outputs equal t o x^ ( i = 1, 2, n ) . The t o t a l l i n k a g e e f f e c t of the master i n d u s t r y w i l l be x ± p ± ' where p^ equals the p r o b a b i l i t y a c e r t a i n i n d u s t r y w i l l be set up. For i n -d u s t r i e s which are backwardly l i n k e d to the export base s e c t o r the i n t e r -p r e t a t i o n of the p^'s i s r e l a t i v e l y s t r a i g h t f o r w a r d . As the export i n d u s t r y grows the annual demand f o r inputs y^, •**» 7n a l s o grows. The c r i t e r i o n which i s l a r g e l y r e s p o n s i b l e f o r the establishment of i n d u s t r i e s producing these inputs i s t h e i r "minimum economic s i z e " which Hirschman ( i b i d . ) de-f i n e s "not [as] a t e c h n i c a l concept, but ... i n economic terms r e l a t i v e t o normal p r o f i t s and e f f i c i e n t f o r e i g n s u p p l i e r s " . I f the minimum economic s i z e ( i n terms of y e a r l y productive c a p a c i t y ) of f i r m s producing the inputs used by the export i n d u s t r y i s a^, a^, a^, then the p r o b a b i l i t y of one of these backwardly l i n k e d i n d u s t r i e s , n, being set up i n the r e g i o n w i l l be equal to y /a (where t h i s r a t i o cannot exceed 1). Given t h a t a remains n n n constant, growth i n y n due t o an increase i n the s i z e of the export sector w i l l l e a d t o an increased p r o b a b i l i t y t h a t the l i n k e d i n d u s t r y w i l l become 30 e s t a b l i s h e d i n the r e g i o n . Backwardly l i n k e d i n d u s t r i e s can be c l a s s e d as s a t e l l i t e or n o n s a t e l -l i t e i n d u s t r i e s ( i b i d . , 102) depending on whether or not the export s e c t o r i s the major customer of the l i n k e d i n d u s t r y . In the case of a r e g i o n i n a r e l a t i v e l y e a r l y stage of development where o n l y one major i n d u s t r y (the export s e c t o r ) has reached s u f f i c i e n t s i z e t o have l i n k a g e e f f e c t s , H i r s c h -man suggests t h a t n o n s a t e l l i t e i n d u s t r i e s are u n l i k e l y to be e s t a b l i s h e d . However, as the i n d u s t r i a l s t r u c t u r e increases i n d i v e r s i f i c a t i o n (through the a c q u i s i t i o n of s e v e r a l s a t e l l i t e i n d u s t r i e s and the concomitant increase i n s i z e of the l o c a l s e r v i c e s e c t o r ) the p r o b a b i l i t y of r e g i o n a l investment i n backwardly l i n k e d n o n s a t e l l i t e i n d u s t r i e s may be s i g n i f i c a n t . An example of a backwardly l i n k e d s a t e l l i t e i n d u s t r y which might develop i n a f r u i t growing and canning and wine producing r e g i o n would be the metal container i n d u s t r y . A backwardly l i n k e d n o n s a t e l l i t e i n d u s t r y might perhaps be a gl a s s b o t t l e p l a n t . The presence of one or more w i n e r i e s i n the r e g i o n might not provide a s u f f i c i e n t stimulus alone f o r the establishment of the b o t t l e p l a n t , but the j o i n t l i n k a g e e f f e c t s of the wi n e r i e s and such l o c a l i n d u s t r i e s as s o f t d r i n k p l a n t s or breweries might be s u f f i c i e n t . According to Hirschman's formula i t would be p o s s i b l e f o r some s a t e l -l i t e i n d u s t r i e s t o appear i n a r e g i o n a t the same time as the i n i t i a l es-tablishment of resource processing i f the demand of the export-based i n -d u s t r y f o r the input ( y ) t o begin w i t h was approximately the same as the minimum economic s i z e ( a n ) of a f i r m producing the i n p u t . Nevertheless i t can s t i l l be argued t h a t while some of the l i n k e d i n d u s t r i e s would be es-t a b l i s h e d a t about the same time as the master i n d u s t r y , the minimum eco-nomic s i z e of other s a t e l l i t e i n d u s t r i e s would presumably be too l a r g e f o r them t o operate i n the re g i o n from the outset, unless the i n i t i a l investment 31 i n primary processing was of p a r t i c u l a r l y l a r g e s i z e . Therefore i t would be expected t h a t the growth of backwardly l i n k e d s a t e l l i t e i n d u s t r i e s would not simply maintain, but would exceed, the r a t e of increase of the export s e c t o r ( s ) at l e a s t u n t i l the end of stage 3. The t h i r d stage r e g i o n a l i n d u s t r i a l s t r u c t u r e i s i l l u s t r a t e d i n Figure 3. The l o c a l i z e d i n d u s t r i e s which were e s t a b l i s h e d at the second stage might be expected t o expand approximately i n p r o p o r t i o n to the r e g i o n a l economy as a whole. However, there might be a sm a l l increase i n the r e l a -t i v e importance of these types of i n d u s t r i e s because some new s e c t o r s might become e s t a b l i s h e d i n stage 3. There i s some que s t i o n as t o whether the l i n k e d i n d u s t r i e s which appear i n stage 3 should be considered as par t of the l o c a l s e c t o r . Weiss and Gooding (1968, 238n) have suggested that f o r the purpose of economic base m u l t i p l i e r s t u d i e s , i n d u s t r i e s l i n k e d t o the export sector might b e t t e r be considered as i n d i r e c t export a c t i v i t i e s than as l o c a l s e c t o r s . I n t h i s model, however, i t was decided t h a t backwardly l i n k e d i n d u s t r i e s would be considered as p a r t of the l o c a l sector i f they were o r i e n t e d only to supplying inputs t o the r e g i o n a l export s e c t o r or other l o c a l i n d u s t r i e s and not t o export markets. As P a r r (op. c i t . , 12U) p o i n t s out, the success of a backwardly l i n k e d i n d u s t r y i n a r e g i o n may enable i t t o expand independently of growth i n the master i n d u s t r y by a c q u i r i n g export markets. Using Hirschman's (op_. c i t . , 101) terminology t h i s expansion might i n f a c t be necessary f o r the s u r v i v a l of the backwardly l i n k e d i n d u s t r y i n the r e g i o n i f over time demand of the master i n d u s t r y f o r the output y of the l i n k e d i n d u s t r y was i n c r e a s i n g l e s s n r a p i d l y than the minimum economic s i z e , a^, of the l i n k e d i n d u s t r y . I t might be argued t h a t primary a c t i v i t i e s by d e f i n i t i o n should have few backward l i n k a g e e f f e c t s , and t h a t t h e r e f o r e regions which developed as 32 Figure 3. The Industrial Structure of a Hypothetical Region in Stage 3 -Export Sector- *• Local Sector Primary Processing Liiked (Bacltwardly <md Fori ardly) a> CO o o % of Manufacturing 100 Figure U. The Industrial Structure of a Hypothetical Region in Stage h •Export Sector— > •< Local S e c t o r Primary Processing Linked Import ubstituting Localizec 0 % of Manufacturing 100 33 areas of primary resource e x p l o i t a t i o n would have few o p p o r t u n i t i e s f o r f u r t h e r growth by the backward l i n k a g e r o u t e . As Hirschman (o£. c i t . , 109) p o i n t s out, however, much depends on the methods used i n the primary a c t i v -i t i e s . Although i t i s true t h a t purchases on cur r e n t account may be r e l a -t i v e l y low ( i n a g r i c u l t u r e these might includ e such things as seeds, f e r t i -l i z e r s and i n s e c t i c i d e s ) , i n the advanced p a r t s of the world the primary se c t o r s are c a p i t a l i n t e n s i v e and have r e l a t i v e l y l a r g e demands f o r machin-e r y and t r a n s p o r t a t i o n equipment (e.g. a g r i c u l t u r a l machinery, l o g g i n g t r u c k s , f i s h i n g boats, mining equipment). The theory i s not s p e c i f i c a l l y concerned w i t h the f a c t that the e x i s t -ence of backwardly l i n k e d i n d u s t r i e s i n a r e g i o n may help keep costs i n the master i n d u s t r y a t a r a t e comparable t o those i n competing regions (although t h i s i s an important p o i n t ) . The continued v i a b i l i t y of a region's raw m a t e r i a l processing i s not simply a matter of whether or not demand i n the r e s t of the world i s i n c r e a s i n g . Supply c o n d i t i o n s such as continued ac-c e s s i b i l i t y to the raw m a t e r i a l or to other necessary f a c t o r s of p r o d u c t i o n — c a p i t a l and l a b o u r — a s w e l l as the products of backwardly l i n k e d i n d u s t r i e s , help determine whether or not a r e g i o n can ho l d or increase i t s share of the market of i t s export i n d u s t r y . Hirschman ( i b i d . , 101-102, l l 6 n ) suggests t h a t p r e d i c t i n g the estab-lishment of forw a r d l y l i n k e d i n d u s t r i e s to the master i n d u s t r y i s much l e s s s t r a i g h t f o r w a r d than was the case f o r backwardly l i n k e d i n d u s t r i e s . This i s because the master i n d u s t r y i s a s u p p l i e r o f , ra t h e r than a market f o r , the f o r w a r d l y l i n k e d i n d u s t r y , whose minimum economic s i z e i s th e r e f o r e not n e c e s s a r i l y dependent on the s i z e of the master i n d u s t r y . Nevertheless some types of fo r w a r d l y l i n k e d i n d u s t r i e s can be considered t o have a higher p r o b a b i l i t y of becoming e s t a b l i s h e d than o t h e r s . As w i t h backward l i n k a g e s , 3U f o r w a r d l y l i n k e d i n d u s t r i e s can be d i v i d e d i n t o s a t e l l i t e and n o n s a t e l l i t e i n d u s t r i e s . A f o r w a r d l y l i n k e d s a t e l l i t e i n d u s t r y according t o Hirschman ( i b i d . , 102) would d e r i v e b e n e f i t s from l o c a t i n g i n c l o s e p r o x i m i t y t o the master i n d u s t r y i f i t s p r i n c i p a l input were an output or by-product of the master i n d u s t r y and i t s economic s i z e were smaller than t h a t of the master i n d u s t r y . I n the case of a n o n s a t e l l i t e forward l i n k a g e the master indus-t r y would supply perhaps only a minor i n p u t . An example of a s a t e l l i t e i n -d u s t r y of a sawmill might be a p l a n t making wooden boxes or b a r r e l s . I n r e g i o n a l economies developing from raw m a t e r i a l bases, forward l i n k a g e s would r a r e l y take the form of e l a b o r a t e p r o c e s s i n g i n the e a r l y stages of development. Rather they would t y p i c a l l y be of the form of f u r t h e r p r o -c e s s i n g of a primary product where "value added Q.n processing] i s s m a l l r e l a t i v e to the product i t s e l f " ( i b i d . , 109). Thus i f a r e g i o n a l economy i n i t s t h i r d export base stage experienced forward l i n k a g e s , i t s i n d u s t r i a l s t r u c t u r e would probably be l i t t l e changed on t h i s account from what was i l l u s t r a t e d as being t y p i c a l of stage 2 ( i . e . the export s e c t o r would merely have d i v e r s i f i e d i n the r a t h e r l i m i t e d sense of i n c l u d i n g products a t per-haps two r a t h e r than o n l y one l e v e l of p r o c e s s i n g ) . The a d d i t i o n of the more advanced processing would, however, p o s s i b l y a l s o have more and d i f -f e r e n t backward l i n k a g e s than the o r i g i n a l export s e c t o r , i n terms of c u r -r e n t i n p u t s . Thus whereas wood may be the only c u r r e n t input of a s a w m i l l , a box f a c t o r y would use n a i l s as w e l l as lumber as i n p u t s . Stage k As a r e g i o n continues t o experience extensive growth the export base model becomes l e s s u s e f u l as an e x p l a n a t i o n of i t s development. I n the f i r s t three stages the diagrams of i n d u s t r i a l s t r u c t u r e have i n d i c a t e d t h a t r e l a t i v e to the manufacturing economy as a whole the s i z e of the export 35 s e c t o r would have been d e c l i n i n g over time. Up t o t h i s p o i n t , however, the master i n d u s t r y would have remained to a very great extent the dynamic sec-t o r i n the economy. However, as employment i n the l o c a l s e c t o r ( i n c l u d i n g not only the f i n a l demand manufacturing i n d u s t r i e s but a l s o t e r t i a r y indus-t r i e s ) expanded, growth would become much more i n t e r n a l l y generated and d e c r e a s i n g l y dependent on changing e x t e r n a l demand f o r the products of one or a few major export i n d u s t r i e s . I n t e r n a l l y generated growth would be r e f l e c t e d i n the manufacturing s t r u c t u r e by the appearance of i n d u s t r i e s producing goods f o r the l o c a l consumer or i n d u s t r i a l market which were f o r -merly imported, and i n d u s t r i e s which reap l a r g e b e n e f i t s from agglomeration economies and which are t h e r e f o r e a t t r a c t e d mainly t o m e t r o p o l i t a n c e n t r e s . The concept of t h r e s h o l d has al r e a d y been a l l u d e d t o i n d i s c u s s i n g the r e l a t i o n s h i p between the l e v e l of input requirements of a master i n d u s t r y and the minimum economic s i z e of a backwardly l i n k e d i n d u s t r y . As aggregate demand (which might be regarded as a combination of purchasing power of consumers, businesses and government i n the region) grows the r e g i o n would tend to cross demand thresholds f o r manufacturing i n d u s t r i e s which are l o -c a t i o n a l l y o r i e n t e d to markets. These i n d u s t r i e s would thus be able t o operate p r o f i t a b l y w i t h i n the r e g i o n . An example of a type of i n d u s t r y which i s o r i e n t e d t o the c r o s s i n g of a demand t h r e s h o l d based on consumer purchasing power i s food processing (where the raw m a t e r i a l s are imported i n t o the r e g i o n ) . Another type w i t h a c o n s i d e r a b l y higher t h r e s h o l d l e v e l i s the manufacture of consumer durables such as household appliances and automobiles. I n d u s t r i e s o r i e n t e d t o the aggregate demand of the r e g i o n a l i n d u s t r i a l s e c t o r or to both r e g i o n a l consumers and i n d u s t r i e s are o i l r e -f i n e r i e s and s t e e l m i l l s (based on scrap metal or p o s s i b l y imported i r o n ore and c o a l , i f the r e g i o n i s a c c e s s i b l e t o these raw m a t e r i a l s ) . 36 Changes in technology or in relative accessibility to imports over time might result in threshold levels for industries rising or f a l l i n g , and thus a regional population of, say, 500,000 might be sufficient for the establish-ment of a market oriented industry at one period, whereas the same industry might require a regional market of 1,000,000 or, on the other hand, only 250,000 for profitable operation at a later point in time. A region developing from an export base consisting largely of raw or par t i a l l y processed materials might be said to enter stage h when a large proportion of manufacturing investment was in import substituting a c t i v i -t i e s . The manufacturing structure of a region i n stage U i s illustrated in Figure I 4 . . The most important characteristic of stage h i s the expansion in local sector manufacturing which could occur independently of a change i n the ex-port sector. Regional expansion in the lo c a l sector might be considered to be the factor largely responsible for attracting labour and capital to the region. As a result the proportion of regional activity accounted for by the exports of pa r t i a l l y processed materials would tend to decrease quite noticeably. The proportion of regional manufacturing activity classified as backwardly linked would also possibly show a decline from stage 3 par-t i a l l y because of the relative decline of i t s market and also because new backwardly linked industries appearing at stage h w i l l include nonsatellite industries linked to several regional industries and thus perhaps more ac-curately classified as import substituting (e.g. metal fabricating indus-t r i e s ) . Also included i n the import substituting category are nonsatellite forwardly linked industries for which proximity to the market i s more im-portant in terms of transportation costs than proximity to raw materials. Thus a region developing from an export economy based on lumber might not 37 acquire f u r n i t u r e manufacturing u n t i l stage U. The establishment of such f o r w a r d l y l i n k e d i n d u s t r i e s would a l s o p l a y a r o l e i n d i m i n i s h i n g the r e l -a t i v e (and p o s s i b l y the absolute) s i z e of the sector p r o c e s s i n g raw mate-r i a l s f o r export s i n c e some o f the output would now s t a y w i t h i n the r e g i o n . The development of import s u b s t i t u t i n g i n d u s t r i e s i s not simply a mat-t e r of l a r g e aggregate demand disp e r s e d throughout the r e g i o n . For stage h to occur i n a r e g i o n i t would almost be e s s e n t i a l that the r e g i o n contained a m e t r o p o l i t a n area. As was suggested above one of the r e g i o n a l centres which appeared soon a f t e r development began might grow much more r a p i d l y than the others, and the degree of urban primacy (Kerr, 1968, 537-5U3) would probably be r e i n f o r c e d by the processes of backward l i n k a g e . Most manufac-t u r i n g i n d u s t r i e s , other than resource processing and t h e i r s a t e l l i t e i n -d u s t r i e s and the u b i q u i t o u s types of manufacturing a c t i v i t i e s w i t h d i s t r i -butions s i m i l a r to the po p u l a t i o n as a whole, b e n e f i t from agglomeration. This i s due not only t o the f a c t t h a t manufacturing i n d u s t r i e s g e n e r a l l y develop complex goods l i n k a g e s between each other and t h e r e f o r e l o c a t e i n close p r o x i m i t y t o one another i n order t o minimize the t r a n s p o r t a t i o n c o s t s , but a l s o because of the u r b a n i z a t i o n economies which are only a v a i l -able i n r e l a t i v e l y dense s p a t i a l c l u s t e r s . These include the a n c i l l a r y s e r v i c e s of f i n a n c i a l i n s t i t u t i o n s , p a r t i c u l a r l y banks and insurance com-panies, accountants, a d v e r t i s i n g agencies and p r i n t e r s , lawyers, t r a n s p o r t companies and many others (Bater and Walker, 1971, 30-39). Moreover l a r g e urban areas a l s o have the advantage of the a v a i l a b i l i t y of a l a r g e r and more f l e x i b l e labour p o o l than i s found i n s m a l l e r communities. The importance of u r b a n i z a t i o n economies i n d i c a t e s t h a t c o n c e n t r a t i o n of p o p u l a t i o n and economic a c t i v i t y i n an urban area may be e q u a l l y impor-t a n t as the absolute p o p u l a t i o n of the r e g i o n . Thus two regions having the 38 same p o p u l a t i o n , but i n which one has a l a r g e urban area, whereas the other has a more disp e r s e d p o p u l a t i o n w i t h s e v e r a l small c i t i e s of approximately the same s i z e , may not have the same f u t u r e growth p o t e n t i a l s . L i t h w i c k and Paquet (1°68), who emphasize the i n t e r r e l a t i o n s h i p s of u r b a n i z a t i o n and i n d u s t r i a l i z a t i o n , note t h a t as a resource-based r e g i o n grows there may be changes i n the c i t y - r e g i o n r e l a t i o n s h i p . I n i t i a l l y the c i t y may be depend-ent on the r e g i o n f o r growth i n that the export base i s l o c a t e d i n the h i n -t e r l a n d . E v e n t u a l l y , however, the c i t y , by a t t a i n i n g s e l f - s u s t a i n i n g growth because of the presence of agglomeration economies, w i l l determine the eco-nomic h e a l t h of the r e g i o n . Stage h could be considered the p e r i o d during which the v i a b i l i t y of the urban area c l e a r l y would become the determining f a c t o r i n f u r t h e r r e g i o n a l growth. Blumenfeld's a r t i c l e (1955), i n d i s -c u s s i n g the nature of growth i n the m e t r o p o l i s , shows how a r e g i o n at stage h would no longer depend on the p r o s p e r i t y of i t s o r i g i n a l export base sec-t o r . Should demand f o r products of t h i s s e c t o r d e c l i n e or should access t o raw m a t e r i a l s d i m i n i s h , the agglomeration economies and innovativeness of the urban centre would enable the r e g i o n t o s u b s t i t u t e new export i n d u s t r i e s ; f o r example i n d u s t r i e s which o r i g i n a l l y had an import s u b s t i t u t i n g ro*le might acquire e x t e r n a l markets. Stage 5 Beyond stage k the r e g i o n would perhaps become a d i v e r s i f i e d manufac-t u r i n g area i n which the export of p a r t i a l l y processed resources would f a l l t o a minor r ^ l e as f o r w a r d l y l i n k e d i n d u s t r i e s g r a d u a l l y grew to the p o i n t of purchasing the e n t i r e output of what was formerly the c h i e f export sec-t o r . Products of the region's raw m a t e r i a l s might indeed s t i l l be exported from the area ( i f a resource supply was s t i l l a v a i l a b l e ) , but i n e l a b o r a t e l y processed form. The r e l a t i v e s i z e of the export s e c t o r would perhaps remain 39 approximately the same as i n stage k, but the i n d u s t r i e s w i t h e x t e r n a l mar-kets would be mainly the producers of f i n i s h e d consumer or producer goods. Formerly some of these would have been import s u b s t i t u t i n g a c t i v i t i e s or l i n k e d i n d u s t r i e s s e r v i n g l o c a l markets. Other i n d u s t r i e s would presumably be new t o the r e g i o n and would e s t a b l i s h there because of such t h i n g s as the high market p o t e n t i a l , e x t e r n a l economies, e t c . The f a c t o r s r e s p o n s i b l e f o r a t t r a c t i n g new i n d u s t r i e s to the r e g i o n i n stage 5 would be s i m i l a r to those i n stage U, except t h a t i n the f i r s t of these two stages the ro*le t h a t the i n d u s t r i e s would be p l a y i n g would be mainly a supplementary one to i n d u s t r i e s outside the r e g i o n which would supply the greater p r o p o r t i o n of the region's demand. In stage 5, however, the re g i o n would tend t o have a p o s i t i v e trade balance i n many consumer and producer goods. L o c a l manu-f a c t u r i n g a t t h i s stage would presumably have a d i v e r s i f i e d s t r u c t u r e w i t h a s m a l l processing s e c t o r (based on l o c a l and imported raw m a t e r i a l s ) , but the bulk of i n d u s t r i e s would be of the l o c a l i z e d and import s u b s t i t u t i n g type. The stage 5 i n d u s t r i a l s t r u c t u r e i s shown i n F i g u r e 5. Subregional Model The model which has been presented has been concerned w i t h the growth of a region considered as a s i n g l e s p a t i a l u n i t . Duesenberry (195>0) p r e -sented a model of economic development based upon the h i s t o r i c a l experience of the r e l a t i v e l y developed east and the newly s e t t l e d west north c e n t r a l regions of the United S t a t e s i n the 19th century, which i s suggestive of the development of a r e l a t i o n s h i p between adjacent p a r t s or subregions of a l a r g e r , growing r e g i o n . I n h i s model a g r i c u l t u r a l development i n the de-v e l o p i n g area s t i m u l a t e s manufacturing development i n the more advanced r e -gio n . Depending on whether or not a g r i c u l t u r a l expansion i s s u f f i c i e n t l y ho Figure 5» The Industrial Structure of a Hypothetical Region in Stage 5 Export Sector + Local Sector bo in to CO T ) Q) xs CD o P IS) o - 5 •H J* ci i-l •H CO oc r? Pri Consumer and 'roducer Goods (Including Formerly Linked or Import Substituting) •5 -P •H CO •8 CO - p o # of Manufacturing 100 hi rapid in the newly settled region, induced growth in manufacturing in the older region w i l l more than compensate for the agricultural decline there due to increased competition from the developing area. The stage model of changing industrial structure could be presented in an intraregional framework, thereby recognizing spatial v a r i a b i l i t y and the development of distinctive subregions within a large region. Doing so could .enable showing more ex p l i c i t l y both how a subregion of a large region might be unable to progress beyond a certain elementary level and how another sub-region might continue to grow prior to reaching stage h (where growth be-comes self-sustaining and urban oriented) when i t s resource sector has reached a level of maximum u t i l i z a t i o n , and other types of resource exploi-tation are not possible. For the purposes of the intraregional model a subregional system consisting of two contiguous subregions w i l l be assumed: A, already settled and having a manufacturing structure typical of early stage 3 ( i . e . the beginnings of the development of backwardly linked indus-tries) and B, a sparsely populated, more remote area whose resources have not as yet been subject to intensive exploitation. The further assumption w i l l be made that A has reached a stage of f u l l resource u t i l i z a t i o n , and production within the subregion could only increase as a result of techno-logical change. For example in a forestry economy technological improvements might permit the use of smaller-diameter logs by sawmills or i n a mining economy the use of lower grade mineral deposits. In any event the rate of growth of subregion A would have slowed down considerably from what i t was at the time of i n i t i a l development. Given that world demand for the raw or semiprocessed materials of the whole region was increasing more rapidly that subregion A could supply, there would probably be an influx of investment by firms from A as well as U2 from outside the system i n the r e l a t i v e l y undeveloped subregion B. Provided th a t costs of production i n B were competitive w i t h other areas i n the world (the e x istence of l i n k e d i n d u s t r i e s i n A would help i n t h i s regard) growth could continue. One of the r e s u l t s of B's growth would be the s t i m u l a t i o n of the backwardly l i n k e d i n d u s t r i e s which were i n i t i a l l y e s t a b l i s h e d i n response t o A's primary resource i n d u s t r y . Moreover depending on the r i c h -ness of B's resource base, A might succeed i n a t t r a c t i n g backwardly l i n k e d i n d u s t r i e s which were not able to become e s t a b l i s h e d on the b a s i s of A's market alone (e.g. c e r t a i n types of machinery or t r a n s p o r t equipment). Given t h a t aggregate demand of the e x p o r t i n g i n d u s t r i e s i n the system was great enough f o r the establishment of new backward l i n k a g e s , these f i r m s would p r e f e r l o c a t i n g i n A t o B not only because A's market would s t i l l be l a r g e r than B's, but a l s o because A would be c l o s e r t o outside s u p p l i e r s of inputs t o the backwardly l i n k e d s e c t o r . Subregion B might a l s o s t i m u l a t e forward l i n k a g e s i n A i n that raw m a t e r i a l s or semiprocessed goods from B might be subject to more processing i n A before being exported from the r e -gion as a whole. With extensive growth i n both subregions, p o p u l a t i o n might become l a r g e enough t o push A i n t o stage U, given t h a t s u f f i c i e n t agglomera-t i o n economies were a v a i l a b l e i n the dominant urban centre t o create s e l f -s u s t a i n i n g growth. Expansion i n import s u b s t i t u t i n g i n d u s t r i e s would then serve both A and B. Although the existence of subregion B might have helped A move i n the d i r e c t i o n of a mature i n d u s t r i a l economy, i t i s questionable whether or not B could be s u c c e s s f u l i n pr o g r e s s i n g beyond stage 2 i t s e l f . As has a l r e a d y been s t a t e d most manufacturing i n d u s t r i e s except those which c h a r a c t e r i z e the i n d u s t r i a l s t r u c t u r e of a r e g i o n a t stage 2 g a i n b e n e f i t s from agglom-e r a t i o n . The f a c t o r working i n B's favour regarding the establishment of 1*3 a more advanced i n d u s t r i a l s t r u c t u r e would be t r a n s p o r t a t i o n c o s t s . How-ever, as Bftventer (1961*, 92) i n d i c a t e s , t e c h n o l o g i c a l change has generally-been moving i n the d i r e c t i o n of increased e x t e r n a l economies and economies of s c a l e and t o decreased t r a n s p o r t a t i o n costs ( i n r e l a t i o n t o the p r i c e of the f i n i s h e d commodity). This would tend t o l e a d t o increased c o n c e n t r a t i o n of manufacturing a c t i v i t y i n m e t r o p o l i t a n c e n t r e s , and as such the l e v e l of demand th a t was re q u i r e d t o a t t r a c t manufacturing i n d u s t r i e s t o A may not be s u f f i c i e n t t o a t t r a c t the i n d u s t r i e s t o B. Whether or not B would be able to develop a mature i n d u s t r i a l s t r u c t u r e might depend on i t s distance from A — t h e s h o r t e r the distance the more l i k e l y f i r m s would simply supply B from p l a n t s i n A. Of course i f i n t e r r e g i o n a l r e l a t i o n s as opposed t o i n t r a r e g i o n a l r e l a t i o n s were considered the system A-B could be considered as a s i n g l e u n i t . While t h i s l a r g e r e g i o n considered as a whole might reach s e l f - s u s t a i n i n g growth, decreasing r e l a t i v e t r a n s p o r t costs might prevent i t from proceeding to the stage of a f u l l y d i v e r s i f i e d manufacturing economy (stage 5) because of competition from areas which were i n d u s t r i a l i z e d e a r -l i e r . The Model of Regional I n d u s t r i a l Development: Concluding Comments Regional economic development i s a very complex process, and as y e t no general theory e x i s t s ( H i l h o r s t , 1967, 9). The r e g i o n a l and subregional model presented i n t h i s chapter i s very s i m p l i f i e d and considers only the sequence of development of manufacturing i n d u s t r i e s i n economies developing from resource e x p l o i t a t i v e a c t i v i t i e s . Of course regions w i t h open econo-mies may develop as a r e s u l t of f a c t o r s other than e x t e r n a l demand f o r ex-p o r t s . Among these f a c t o r s might be the presence of n a t u r a l amenities which make the r e g i o n d e s i r a b l e as a r e s o r t or retirement area. S i m i l a r l y govern-merit spending may be the main exogenous expenditure i n a r e g i o n . I n these cases a r e g i o n may be pushed to s e l f - s u s t a i n i n g growth and so develop import s u b s t i t u t i n g i n d u s t r i e s without f i r s t p assing through stages 1 t o 3. A r e l a t i v e l y c l o s e d economy o r i g i n a l l y based on a g r i c u l t u r e would a l s o l i k e l y have a d i f f e r e n t sequence of development of manufacturing than i s suggested here ( f o r example by s t r e s s i n g consumer goods i n d u s t r i e s a t an e a r l i e r stage than c a p i t a l goods i n d u s t r i e s ) . However, i f the l i m i t a t i o n s are taken i n t o account, the model does suggest that the i n d u s t r i a l development of a r e g i o n may take the form of i n c r e a s i n g i n d u s t r i a l complexity. The purpose of t h i s chapter has been t o provide a t h e o r e t i c a l i n t r o -d u c t i o n t o the t h e s i s . The model has been discussed i n terms of t r a c i n g the development over time of a s i n g l e r e g i o n and a l s o the e f f e c t of the growth of one subregion on an a d j o i n i n g subregion a t a d i f f e r e n t "stage" of d e v e l -opment. The hypothesis t h a t r e g i o n a l i n d u s t r i a l development may take the form of growing complexity i s used as a framework w i t h i n which data per-t a i n i n g to manufacturing i n B r i t i s h Columbia and i n the census d i v i s i o n s of the province are analyzed. Since the data t o be examined are e i t h e r p o i n t - i n - t i m e or change-over-time, where the time p e r i o d being considered i s v e r y s h o r t , no attempt i s made (or indeed would be p o s s i b l e ) t o t e s t the model by determining whether or not i n B r i t i s h Columbia or i n a census d i -v i s i o n of the province the i n d u s t r i a l s t r u c t u r e has evolved i n the same manner as was noted f o r the t h e o r e t i c a l r e g i o n ( i . e . a p e r i o d of complete domination by primary processing a c t i v i t i e s f o l l o w e d by the appearance of f i r s t l o c a l i z e d , then l i n k e d , then import s u b s t i t u t i n g i n d u s t r i e s ) . Such a t e s t i n g of the hypothesis would depend on the a n a l y s i s of the e v o l u t i o n of manufacturing v i r t u a l l y s ince the beginning of European settlement i n the p r o v i n c e . The p r e s e n t a t i o n of data w i t h i n the c l a s s i f i c a t i o n system based on the model, however, should f a c i l i t a t e t e s t i n g of the model l a t e r , f o l -lowing the a d d i t i o n of the h i s t o r i c a l dimension t o the data a n a l y s i s . E s s e n t i a l l y the i n d u s t r y groups discussed i n the model are used as a means by which data p e r t a i n i n g t o over 100 manufacturing i n d u s t r i e s i n the census d i v i s i o n s of the province can be aggregated i n t o s i g n i f i c a n t c a t e -g o r i e s . I t i s f e l t t h a t the i n d u s t r y c l a s s i f i c a t i o n used i n the model i s v a l i d i n the sense that the c r i t e r i a used t o d i f f e r e n t i a t e the c l a s s e s are meaningful i n terms of c u r r e n t l e v e l of economic development and i n t e r r e -g i o n a l economic r e l a t i o n s h i p s . I n t h i s sense i f the i m p l i c a t i o n of stage of development of a r e g i o n i s s u b j e c t to r e b u t t a l , the c l a s s i f i c a t i o n of i n d u s t r i e s and the d i f f e r e n t i a t i o n of regions can s t i l l be j u s t i f i e d on a d e s c r i p t i v e b a s i s , and i n t h i s sense can be regarded as independent of the model, although the model does provide an a d d i t i o n a l dimension t o the d a t a . The "stage" or s t a t e of development of a r e g i o n w i l l be determined by the composition of the region's manufacturing i n terms of the types of i n d u s t r y c l a s s e s or groups di s c u s s e d . I t should a l s o be mentioned t h a t the stage of development i s not inde-pendent of the p a r t i c u l a r r e g i o n a l i z a t i o n used. Any census d i v i s i o n of the province may be composed of areas which are at higher or lower l e v e l s of development than the d i v i s i o n as a whole. Using the terminology of t h i s chapter, B.C. i s the r e g i o n , and the census d i v i s i o n s are the subregions. P r i o r t o a d e t a i l e d examination of the s t r u c t u r e of manufacturing i n B r i t i s h Columbia and i t s c o n s t i t u e n t r e g i o n s , Chapter I I I w i l l pay b r i e f a t t e n t i o n t o the importance of manufacturing a c t i v i t y as a whole. CHAPTER I I I MANUFACTURING IN BRITISH COLUMBIA AND IN THE REGIONS OF THE PROVINCE This chapter serves as a b r i e f summary of the p o s i t i o n t h a t manufac-t u r i n g occupies i n the economies of B.C. and of the regions of the p r o v i n c e . F i r s t of a l l the province as a whole i s compared w i t h other parts of Canada i n terms of the importance of manufacturing. Secondly i t i s shown t h a t manufacturing v a r i e s i n r e l a t i v e s i g n i f i c a n c e from one r e g i o n t o another w i t h i n the p r o v i n c e . The approach taken i s b a s i c a l l y d e s c r i p t i v e r a t h e r than i n t e r p r e t i v e . Emphasis i s placed not on e x p l a i n i n g why manufacturing v a r i e s i n importance from B.C. t o other p a r t s of Canada or from one r e g i o n of B.C. to another. The purpose of the chapter i s r a t h e r t o provide data which p e r t a i n t o the whole manufacturing s e c t o r , against which s t a t i s t i c s presented throughout the r e s t of the t h e s i s , d e a l i n g w i t h p a r t i c u l a r manu-f a c t u r i n g i n d u s t r i e s or groups of i n d u s t r i e s , can be put i n p e r s p e c t i v e . Importance of Manufacturing i n the Province During the 1960's Employment Two sets of data c o l l e c t e d by the Dominion Bureau of S t a t i s t i c s (now c a l l e d S t a t i s t i c s Canada) are used t o measure the r e l a t i v e importance of the manufacturing s e c t o r i n the economy of B r i t i s h Columbia. The f i r s t set a p p l i e s to employment. Table I presents estimates of employees f o r B r i t i s h Columbia and Canada i n a l l n o n - a g r i c u l t u r a l i n d u s t r i e s and i n manufacturing f o r the years 1961-1970. In Table I I manufacturing employment i s expressed as a percentage of t o t a l n o n - a g r i c u l t u r a l employment. B r i t i s h Columbia has a smaller p r o p o r t i o n of n o n - a g r i c u l t u r a l employ-ment engaged i n the manufacturing s e c t o r than does Canada as a whole. In 1*7 TABLE I EMPLOYMENT ESTIMATES IN ALL NON-AGRICULTURAL INDUSTRIES AND IN MANUFACTURING, BRITISH COLUMBIA AND CANADA, 1961-1970 B r i t i s h Columbia Canada Year T o t a l Non- Manufacturing T o t a l Non- Manufacturing A g r i c u l t u r a l Employment A g r i c u l t u r a l Employment Employment Employment («000) 1961 1*26.1* 100.2 U,68l.5 1,302.1 1962 UUU.7 101*. 2 1*,868.7 1,356.2 1963 U61.U 108.9 5,021.2 1,396.9 196U 1*85.2 111.6 5,261*J* 1,1*69.0 1965 525.6 118.U 5,553.2 1,51*9.8 1966 569.5 125.2 5,851.5 1,635.3 1967 588.i* 121.9 6,038.1* 1,61*2.5 1968 608.1 123.3 6,189.3 1,639.2 1969 653.3 130.7 6,516.0 1,691.1* 1970 661.7 129.1* 6,61*5.3 1,667.6 Source: Estimates of Employees by Province and Industry (January, 1970, Tables 1*B, 5B, 6; February, 1971, Tables I 4 B , 6) Note: Employment f i g u r e s are averages f o r the year. U8 TABLE I I EMPLOYMENT IN MANUFACTURING AS A PERCENTAGE OF EMPLOYMENT IN ALL NON-AGRICULTURAL INDUSTRIES, BRITISH COLUMBIA AND CANADA, 1961-1970 Year B r i t i s h Columbia Canada 1961 23.50 27.81 1962 23.U3 27.86 1963 23.60 27.82 196U 23.00 27.90 1965 22.53 27.91 1966 21.98 27.95 1967 20.72 27.20 1968 20.28 26.U8 1969 20.01 25.96 1970 19.56 25.09 h9 f a c t B.C. occupies an intermediate p o s i t i o n among the provinces i n terms of the p r o p o r t i o n of t o t a l employment i n manufacturing. Thus i n 1970 B.C., w i t h 19,$6% of employment i n manufacturing, ranked t h i r d among the provinces ( a f t e r Ontario and Quebec which each had approximately 30% of employment i n manufacturing). I n the other seven provinces t h i s p r o p o r t i o n v a r i e d between 17.85$ i n New Brunswick and 8.05$ i n Saskatchewan (Estimates of Employees by Province and Industry, February, 1971, Tables IjB and 6). The f i g u r e s i n Table I I i n d i c a t e t h a t i n Canada a f t e r 1966 manufac-t u r i n g d e c l i n e d s t e a d i l y i n importance ( i n terms of employment) r e l a t i v e to the e n t i r e n o n - a g r i c u l t u r a l p a r t of the economy, w h i l e p r i o r t o 1966 manufacturing had maintained a f a i r l y constant p r o p o r t i o n of employment i n a l l n o n - a g r i c u l t u r a l a c t i v i t i e s . In B r i t i s h Columbia the r e l a t i v e d e c l i n e of manufacturing was more marked than i n the n a t i o n as a whole. From a peak i n 1963 the percentage of t o t a l employment accounted f o r by the manufactur-i n g s e c t o r decreased by U.OU p o i n t s by 1970. I n Canada the d e c l i n e from the peak year of the decade, 1966, t o 1970 was 2.86 percentage p o i n t s . Value Added The second set of data that i s used t o measure the importance of manu-f a c t u r i n g i n B.C. i s presented i n Table I I I . (Data f o r 1970 were not a v a i l -able at the time of w r i t i n g . ) The f i g u r e s t h a t have a l r e a d y been considered d e a l t w i t h n o n - a g r i c u l t u r a l employees. On the other hand, the data i n Table I I I d eal w i t h value added i n goods-producing i n d u s t r i e s only ( i n c l u d i n g a g r i c u l t u r e ) . Since a g r i c u l t u r e i s a f a i r l y s m a l l p r o p o r t i o n of the Cana-di a n and the B.C. economies i n terms of employment and value added, i t i s not at a l l s u r p r i s i n g that the p o s i t i o n of manufacturing i s much more s i g -n i f i c a n t i n the goods-producing part of the economy than i n the non-agri-c u l t u r a l p a r t of the economy. TABLE I I I VALUE ADDED IN MANUFACTURING A3 A PERCENTAGE OF VALUE ADDED IN ALL GOODS-PRODUCING INDUSTRIES, CANADA AND PROVINCES, 1961-1969 Year B.C. A l t a . Sask. Man. Ont. Qui. N.B. N.S. P.E.I. N f l d . T e r r . Canada 1961 1*8.5 21.1 l l * . 8 1*1.9 67.9 66.5 51.6 1*3.9 20.5 28.2 2.7 56.9 1962 1*8.7 21.5 9.8 37.1 69.7 66.6 52.5 1*1*. 7 21.5 27.7 1*.3 56.3 1963 52.9 20.6 8.7 38.1* 71.2 67.5 53.6 1*6.6 22.5 26.3 5.3 57.0 1961* 51.2 21.1* 10.1 37.6 72.3 66.9 1*9.2 1*7.7 21.8 2U.7 6.1* 58.1 1965 1*9.3 21.1* 9.7 37.8 72.7 66.6 1*1*. 7 1*5.7 19.8 2i*.7 2.3 57.8 1966 1*7.1* 20.3 8.6 39.1 71.3 65.9 1*1*. 7 1*5.5 20.0 22.2 2.3 56.2 1967 1*5.9 21.1 11.6 39.5 71.0 66.8 1*1*.3 1*3.2 25.7 20.9 2.1* 57.0 1968 1*8.6 20.1* 11.5 37.6 71.2 67.8 1*6.9 1*3.9 25.0 19.2 2.6 57.1* 1969 1*7.8 21.6 11 .8 37.0 71.9 67.9 1*8.8 1*3.5 26.5 21.6 2.7 57.7 Source; Survey of Production (1966, Table 5; 1969, Tables 2, 5) o 51 • Table I I I shows B r i t i s h Columbia's intermediate p o s i t i o n i n Canada i n terms of the importance of manufacturing. While manufacturing i s much more dominant as a goods-producing i n d u s t r y i n Ontario and Quebec than i n B.C., i t i s much l e s s s i g n i f i c a n t i n Newfoundland, P r i n c e Edward I s l a n d , and i n a l l three P r a i r i e Provinces ( p a r t i c u l a r l y Saskatchewan and A l b e r t a ) . I t i s commonly f e l t t h a t Canada can be d i v i d e d i n t o a manufacturing h e a r t l a n d (Ontario and Quebec) and a resource o r i e n t e d p e r i p h e r y (the r e s t of the n a t i o n ) . The d i f f e r e n c e s i n the types of resources i n the p e r i p h e r a l p arts of the country, however, account i n l a r g e p a r t f o r the v a r i a t i o n i n the r e l a t i v e importance of manufacturing. In B r i t i s h Columbia products of the f o r e s t i n d u s t r y are subject to some processing before export, whereas i n the P r a i r i e r e g i o n , f o r example, such products as wheat and o i l are ex-ported i n l a r g e q u a n t i t i e s without undergoing any p r o c e s s i n g . In B r i t i s h Columbia as w e l l as i n Canada as a whole i t i s d i f f i c u l t t o d i s t i n g u i s h any tendency f o r a c o n s i s t e n t change over time i n the r e l a t i v e importance of manufacturing as a goods-producing i n d u s t r y during the 1960's. The r e l a t i v e d e c l i n e i n importance of manufacturing which was shown i n Table I I i s not at a l l evident when only the goods-producing p o r t i o n of the econ-omy i s considered. This i s because the most r a p i d l y growing parts of the economies of both B r i t i s h Columbia and Canada have been the s e c t o r s concerned w i t h the d i s t r i b u t i o n of goods and the p r o v i s i o n of s e r v i c e s . Importance of Manufacturing i n the Regions of B r i t i s h Columbia U n f o r t u n a t e l y the data which have been presented showing the importance of manufacturing i n B r i t i s h Columbia as compared w i t h the other provinces during the decade of the 1960's are not a v a i l a b l e f o r the s t a t i s t i c a l r e -gions (the census d i v i s i o n s ) i n t o which the province i s d i v i d e d . The l a t e s t 52 year f o r which data are a v a i l a b l e showing the r e l a t i v e importance of the manufacturing s e c t o r i n the o v e r a l l economies of the v a r i o u s census d i v i -s i o ns i s 196l. These data which p e r t a i n t o labour f o r c e composition by i n -d u s t r y group are presented i n Table IV. U n l i k e Tables I - I I I the " t o t a l " f i g u r e w i t h which the manufacturing s e c t o r i s being compared i n Table IV does not exclude any p a r t of the economy. For t h i s reason the B.C. manu-f a c t u r i n g labour f o r c e as a percentage of the t o t a l B.C. labour f o r c e i s smaller than the corresponding f i g u r e i n Table I I . ( I t should a l s o be noted t h a t the data i n Table IV r e f e r t o the whole labour f o r c e , i n c l u d i n g both persons who were employed and persons who were l o o k i n g f o r work. Persons i n the l a t t e r category were a l l o c a t e d t o the i n d u s t r y i n which they were l a s t employed.) For comparative purposes the other provinces and t e r r i -t o r i e s have been i n c l u d e d i n Table IV. As the r e l a t i v e importance of manufacturing v a r i e s from one province to another, so i t d i f f e r s among the regions of B.C. Map 1 shows the 12 regions i n t o which the province i s d i v i d e d f o r the purpose of the t h e s i s . These are the same regions used by Denike and Leigh (o£. c i t . ) , namely the 10 census d i v i s i o n s plus M e t r o p o l i t a n Vancouver and M e t r o p o l i t a n V i c t o r i a . Census D i v i s i o n 1 which i s the East Kootenay r e g i o n ( i n c l u d i n g such urban centres as Cranbrook, F e r n i e , Golden and Kimberley) had almost e x a c t l y the same p r o p o r t i o n of i t s labour f o r c e i n manufacturing i n 1961 as d i d the province as a whole. The West Kootenay r e g i o n (Census D i v i s i o n 2 ~ C a s t l e g a r , Nelson, Revelstoke, T r a i l ) , dominated by Cominco's m e t a l l u r g i c a l and chemi-c a l works at T r a i l , was c l e a r l y an area i n which manufacturing played a more important p a r t i n the t o t a l economy than i t d i d i n the p r o v i n c e . Region 3, the Okanagan-Similkameen-Boundary area, was, on the other hand, a r e l a t i v e l y u n i n d u s t r i a l i z e d p a r t of the province i n terms of labour 53 TABLE IV LABOUR FORCE IN MANUFACTURING EXPRESSED AS A PERCENTAGE OF LABOUR FORCE IN ALL INDUSTRIES, CENSUS DIVISIONS OF BRITISH COLUMBIA AND PROVINCES OF CANADA, 1961 Region Labour Force Labour Force % of T o t a l i n a l l i n Labour Force I n d u s t r i e s Manufacturing i n Manufacturing Census D i v i s i o n 1 12,131* 2,361 19.1*6 2 23,256 6,81*7 29.1*1* 3 31,531 1*,703 11*.92 1* 331,250 62,591 18.90 Me t r o p o l i t a n Vancouver 291*,759 57,1*85 19.50 Rest of Census D i v i s i o n 36,1*91 5,106 13.99 5 100,631 16,308 16.21 M e t r o p o l i t a n V i c t o r i a 55,1*50 5,960 10.75 Rest of Census D i v i s i o n 1*5,181 10,31*8 22.90 6 21,821 k,199 19.2U 7 7,601 3,1*93 1*5.95 8 2l*,830 7,330 29.52 9 1U,361 1*,537 31.59 10 10,233 650 6.35 B r i t i s h Columbia 577,61*8 113,019 19.57 A l b e r t a 1*89,511 1*2,217 8.62 Saskatchewan 325,589 15,177 1*.66 Manitoba 31*2,6U2 1*6,713 13.63 Ontario 2,393,015 61*3,281* 26.88 Quebec 1,768,119 1*66,1*1*3 26.38 New Brunswick 178,355 28,508 15.98 Nova S c o t i a 236,819 3l*,08l 11*.39 P r i n c e Edward I s l a n d 3U,lU8 3,0lU 8.83 Newfoundland 112,310 12,168 10.83 T e r r i t o r i e s 13,691* 21*1 1.76 Canada 6,1*71,850 l,lj0i*,865 21.71 Sources: Census of Canada, Labour Force, I n d u s t r i e s by Sex,  M e t r o p o l i t a n Areas (1961, Tables 2, 3), Census of Canada, Labour Force, I n d u s t r y D i v i s i o n s  by Sex, Counties and Incorporated Centres of 5,000 t o 10,000 (1961, Table 8) Map 1. The 10 Census Divisions and Two Census Metropolitan Areas of Br i t i s h Columbia 55 f o r c e composition. A g r i c u l t u r e , p a r t i c u l a r l y , accounted f o r a d i s p r o p o r -t i o n a t e l y l a r g e part of the labour f o r c e i n t h i s area. In 1961 more than one-half the labour f o r c e of B r i t i s h Columbia r e s i d e d i n M e t r o p o l i t a n Vancouver. The manufacturing p r o p o r t i o n of the labour f o r c e was almost the same i n the Greater Vancouver area as i n t h e province. The r e s i d u a l p a r t of Census D i v i s i o n U ( i . e . the Lower F r a s e r V a l l e y and the Squamish-Howe Sound area) was c h a r a c t e r i z e d by a r e l a t i v e l y low percentage of the t o t a l labour f o r c e engaged i n manufacturing. As i n the Okanagan a g r i c u l t u r e accounted f o r a h i g h p r o p o r t i o n of the labour f o r c e , while f o r e s t r y ( i . e . l ogging) was a l s o an important i n d u s t r y . In 1961 l e s s than 11$ of M e t r o p o l i t a n V i c t o r i a ' s labour f o r c e was i n manufacturing. This f i g u r e was only s l i g h t l y greater than h a l f the c o r -responding f i g u r e f o r the e n t i r e p r o v i n c e . A d i s p r o p o r t i o n a t e l y l a r g e p a r t of V i c t o r i a ' s labour f o r c e was, not s u r p r i s i n g l y , accounted f o r by the pub-l i c a d m i n i s t r a t i o n and defence s e c t o r . Manufacturing, however, was a r e l a -t i v e l y important part of the economy of the r e s t of Vancouver I s l a n d . Census D i v i s i o n 6 which i n c l u d e s the Thompson R i v e r b a s i n and the southern Cariboo r e g i o n was another area of the province where manufacturing was of average importance. On the other hand, i n Region 7, the mainland coast between Powell R i v e r and Ocean F a l l s , manufacturing assumed a very dominant r o l e , accounting f o r almost one-half the t o t a l labour f o r c e . In 1961 t h i s was a higher percentage than i n any other county or census d i v i -s i o n i n Canada. The region's manufacturing i s dominated by two pulp and paper m i l l s at P o w e l l R i v e r and Ocean F a l l s . Census D i v i s i o n 8, the Upper F r a s e r , B u l k l e y and Nechako R i v e r basins (the area i s centred on P r i n c e George) and Census D i v i s i o n 9, the North Coast area (dominated by the P r i n c e Rupert-Terrace-Kitimat t r i a n g l e ) are 56 two other areas where manufacturing accounted f o r a r e l a t i v e l y high propor-t i o n of the labour f o r c e i n comparison with the r e s t of the province. F i n a l l y Region 10, the Northeastern I n t e r i o r (the two l a r g e s t centres are Dawson Creek and F o r t S t . John), had a smaller p r o p o r t i o n of i t s labour f o r c e i n manufacturing than any other r e g i o n of the province. In f a c t the r e l a t i v e importance of manufacturing approximated the l e v e l of A l b e r t a and Saskatchewan where manufacturing assumed a sm a l l e r r6*le than i n any of the other p r o v i n c e s . Region 10 had a d i s p r o p o r t i o n a t e l y l a r g e p a r t of i t s l a -bour f o r c e i n the a g r i c u l t u r a l and mining sectors i n 1961. Thus i n 196l B r i t i s h Columbia contained regions where manufacturing jobs accounted f o r a d i s p r o p o r t i o n a t e l y l a r g e p a r t of the labour f o r c e — t h e West Kootenays, the C e n t r a l Coast, the P r i n c e George area, the North Coast and, t o a somewhat l e s s e r e x tent, Vancouver I s l a n d . On the other hand, there were a l s o regions of r e l a t i v e i n d u s t r i a l absence—the Okanagan, the non-metropolitan Lower Mainland, Greater V i c t o r i a and the Northeastern I n t e r i o r . CHAPTER IV NATURE OF MANUFACTURING IN BRITISH COLUMBIA What has been discussed up to now i s merely the manufacturing s e c t o r as a whole i n the province and the component census d i v i s i o n s . Yet the term "manufacturing" covers a v a s t v a r i e t y of processing and f a b r i c a t i n g indus-t r i e s , and as yet v i r t u a l l y nothing has been s a i d about the types of manu-f a c t u r i n g a c t i v i t y present i n the p r o v i n c e , how B r i t i s h Columbia's manufac-t u r i n g s t r u c t u r e d i f f e r s from t h a t of the r e s t of Canada, or how the s t r u c -t u r e of manufacturing v a r i e s from r e g i o n to r e g i o n w i t h i n the pr o v i n c e . The purpose of t h i s chapter i s to de s c r i b e i n d e t a i l the manufacturing s t r u c t u r e of the province as a whole. The next chapter compares and con-t r a s t s the s t r u c t u r e of manufacturing i n the v a r i o u s r e g i o n s . The approach i n both chapters i s a s t a t i c one. Data are presented f o r one year, 1967, the year f o r which a complete p i c t u r e of one measure of manufacturing ac-t i v i t y , shipments of goods of own manufacture, could be con s t r u c t e d . Be-f o r e d e a l i n g w i t h the s t r u c t u r e of manufacturing i t s e l f , problems of data c o l l e c t i o n and e s t i m a t i o n procedures w i l l be d i s c u s s e d . Data Sources The major source of i n f o r m a t i o n on d i s t r i b u t i o n of manufacturing i n -d u s t r i e s of Canada i s the f e d e r a l agency, Dominion Bureau of S t a t i s t i c s . Gilmour (1966, I4.O-U8) discusses many of the d e f i c i e n c i e s of the data pub-l i s h e d by the DBS i n the Census of Manufacturers. In t r y i n g t o determine the d i s t r i b u t i o n of manufacturing i n terms of any measurable c h a r a c t e r i s t i c other than number of establishments, t h e researcher i s faced w i t h incomplete i n f o r m a t i o n at the county or census d i v i s i o n l e v e l and even a t the p r o v i n c i a l 58 l e v e l . T h i s i s because of d i s c l o s u r e r u l e s which prevent the DBS from pub-l i s h i n g data "when any establishment i n any a r e a l u n i t and any i n d u s t r y accounts f o r 75 per cent of the t o t a l value of shipments i n th a t a r e a l u n i t or i n d u s t r y , or where two establishments account f o r 90 per cent of the t o t a l value of shipments" ( i b i d . , t i l ) . Thus although data were pu b l i s h e d at a l l l e v e l s of the Standard I n d u s t r i a l C l a s s i f i c a t i o n f o r Canada as a whole i n 1967, data could not be p u b l i s h e d f o r three i n d u s t r y groups ("two-d i g i t i n d u s t r i e s " ) which c a r r i e d on manufacturing a c t i v i t y i n B r i t i s h Co-lumbia, namely, rubber i n d u s t r i e s , k n i t t i n g m i l l s , and petroleum and c o a l products i n d u s t r i e s . Of the 165 t h r e e - and f o u r - d i g i t i n d u s t r i e s r e p o r t i n g manufacturing a c t i v i t y i n the province data could be r e l e a s e d f o r only 85 (Manufacturing I n d u s t r i e s of Canada: S e c t i o n F ( B r i t i s h Columbia, Yukon and  Northwest T e r r i t o r i e s ) , 1967, Table 7). At the s c a l e of the census d i v i -s i o ns the p r o p o r t i o n o f data w i t h h e l d from p u b l i c a t i o n was u s u a l l y much gr e a t e r . Thus, f o r example, the only data that could be re v e a l e d f o r D i v i -s i o n 10 were those p e r t a i n i n g t o the t w o - d i g i t i n d u s t r y group "wood indus-t r i e s " (Manufacturing I n d u s t r i e s of Canada: S e c t i o n G (Geographical D i s t r i -b u t i o n ) , 1967, Table 7). A l l other t w o - d i g i t i n d u s t r y groups were simply aggregated i n a s i n g l e category, "other major groups". No data were pub-l i s h e d at a l l at the t h r e e - or f o u r - d i g i t i n d u s t r y l e v e l . D i s c l o s u r e r u l e s prevented the p u b l i c a t i o n of even the data p e r t a i n i n g to a l l - i n d u s t r y t o t a l s f o r D i v i s i o n s 7 and 9. As a r e s u l t these two areas are t r e a t e d as one i n much of Chapter V, where the nature of manufacturing i n the re g i o n s i s d i s -cussed. I n 1967 each of the r e p o r t s f o r i n d i v i d u a l manufacturing i n d u s t r i e s p u b l i s h e d by the DBS (e.g. S h i p b u i l d i n g and Re p a i r , 1967) contained a l i s t of the addresses of a l l establishments c l a s s i f i e d t o the p a r t i c u l a r i n d u s t r y . 59 Although t h i s i n f o r m a t i o n i s s i g n i f i c a n t (and w i l l be used i n the next chap-t e r i n comparing regions on the b a s i s of presence or absence of i n d u s t r i e s ) i t was r e a l i z e d t h a t these data were f a r from s a t i s f a c t o r y i n d e s c r i b i n g , on the one hand, the d i s t r i b u t i o n of i n d u s t r i e s w i t h i n the province and, on the other hand, the s t r u c t u r e of manufacturing of the province and of the census d i v i s i o n s . This i s of course because establishments v a r y g r e a t l y i n s i z e , not o n l y from one i n d u s t r y t o another but a l s o w i t h i n the same indus-t r y . As a r e s u l t i t was thought d e s i r a b l e t o estimate the s i z e of a par-t i c u l a r manufacturing i n d u s t r y i n the province (and i n the census d i v i s i o n s of the province) f o r some q u a n t i f i a b l e c h a r a c t e r i s t i c of manufacturing ac-t i v i t y . Another p u b l i c a t i o n of the DBS, D e s t i n a t i o n of Shipments of Manufac-t u r e r s (op. c i t . ) , was found t o be very u s e f u l as an a i d i n the e s t i m a t i o n of shipments of goods of own manufacture f o r those i n d u s t r i e s whose s h i p -ments could not be r e v e a l e d s e p a r a t e l y f o r B.C. This p a r t i c u l a r document (discussed a l s o i n Chapter I ) , which so f a r has o n l y been published f o r one year, 1967, l i s t s f o r each i n d u s t r y f o r which s t a t i s t i c s are not w i t h h e l d , i n each p r o v i n c e , the shipments according to p r o v i n c i a l , t e r r i t o r i a l and f o r e i g n d e s t i n a t i o n s . I n a d d i t i o n other t a b l e s present the p r o v i n c i a l o r -i g i n of goods consumed w i t h i n a p r o v i n c e . Thus by using t h i s p u b l i c a t i o n i t i s p o s s i b l e , f o r example, to determine f o r B r i t i s h Columbia's wire and wire products manufacturers ( i n d u s t r y 305, according t o the S.I.C. c o d e -see Appendix B) the d o l l a r amount shipped t o each province ( i n c l u d i n g , of course, the amount which i s shipped w i t h i n B r i t i s h Columbia) and a l s o the amount of p r o d u c t i o n shipped outside of Canada (no country-by-country break-down i s g i v e n , however). In a d d i t i o n i t i s p o s s i b l e t o determine the s h i p -ments of the wire and wire products manufacturers of the other provinces t o 60 B r i t i s h Columbia. Estimation Methods for Value of Shipments by Industry The data provided i n Destination of Shipments are very useful i n them-selves in order, for example, to cl a s s i f y industries on the basis of the markets they serve, and they w i l l be used for such a purpose later i n the chapter. For the time being, however, attention i s paid to the usefulness of the publication in estimating t o t a l shipments of those industries which cannot be published by the DBS. Very simply stated, while Destination of  Shipments gives no more complete information as to the t o t a l value of ship-ments of goods of own manufacture than does the annual publication Manufac-turing Industries of Canada: Section F (op. c i t . ) i t does give many more clues as to the amounts of these industry shipments. An example w i l l i l -lustrate this. In 1967 the total shipments of goods of own manufacture of the fur-niture and fixture industries i n B r i t i s h Columbia were valued at $37,891,000 (ibid., Table 7). The Standard Industrial Classification divides this i n -dustry group into four three-digit industries: the household furniture i n -dustry (S.I.C. 261), the office furniture industry (S.I.C. 26U), miscel-laneous furniture industries (S.I.C. 266) and the electric lamp and shade industry (S.I.C. 268). Shipments figures for B.C. were only published for industries 261 ($20,793,000) and 266 ($l5,89l+,000). Subtracting these two figures from the total for the industry group leaves $1,20U,000 as the total shipments for industries 26U and 268. The problem i s now to estimate what proportion of this total should be estimated as the shipments of the office furniture industry and as a corollary what part should be allocated to the electric lamp and shade industry. The only other clue given as to the size 61 of either of these B.C. industries i n the Census of Manufacturers series i s found i n Manufacturing Industries of Canada: Section A (Summary for Canada) (1967, Table 8). It i s indicated there that B r i t i s h Columbia shipments i n industry 261* could not possibly have exceeded $725,000 because this i s the difference between Canadian production i n 1967 and production i n Quebec and Ontario, which are the only two provinces where figures were released for this particular industry. Turning to Destination of Shipments (op. c i t . , Table 2), although no dollar amounts are given i t i s indicated that a l l shipments of industry 268 i n 1967 remained within the province. Furthermore total shipments of a l l provinces to B.C. (including B.C.'s shipments to i t s e l f ) were $1,913,000, of which Quebec and Ontario accounted for $1,121;,000. This leaves $789,000 from Manitoba and B.C., the only other two provinces which shipped to B.C. By subtracting Manitoba's shipments to B.C. of the products of other three-digit furniture industries (figures which are them-selves f a i r l y simple to estimate) from the total shipments of a l l Manitoba furniture and fixture industries to B.C. (this figure was published), total shipments of Manitoba lamps and shades to B.C. are estimated as $132,000. Therefore B.C. shipments to i t s e l f are estimated to be $657,000, and total B.C. production in 1967 must have been the same. B.C. production of office furniture can now also be estimated by subtracting $657,000 from $1,201*,000 to yield $51*7,000. Procedures similar to the one just outlined were followed i n order to estimate provincial shipments for a l l industries (at the two-, three- and four-digit levels) which carried on manufacturing activity in the province in 1967 but for which data could not be published by the DBS. Value of Shipments by Industry 62 Table V, the f i n a l result of the estimation methods described above, presents for each industry i n B.C. the shipments of goods of own manufac-ture, the percentage which B.C. shipments in the particular activity are of the Canadian tot a l , and location quotients for each industry, calculated for any industry by dividing the B.C. percentage share of national produc-tion by the corresponding figure for the all-industry t o t a l . The computa-tion of location quotients is therefore a standardization procedure in which a value of greater than 1.0 indicates that the particular industry i s over-represented i n the province relative to the nation, and a value of less than 1.0 means that the industry i s underrepresented in the province. One of the uses of location quotients i s to suggest what the exporting or basic activities of a region are (Leigh, 1970, 202-205). The hypothesis i s that i f an industry i s relatively concentrated i n a region then i t w i l l export that proportion of product which results i n i t s location quotient being greater than 1.0. For example, i f an industry had a location quotient of 2.0 i t would be expected to export one-half of i t s product. This hypoth-esis rests on assumptions of a self-sufficient benchmark economy (usually the nation), identical consumption patterns in the region and the nation, and homogeneity of product produced by an industry, resulting in no cross-trading. This use of the location quotients is not, however, made here because the publication of Destination of Shipments of Manufacturers makes a method of estimating exported production unnecessary, at least for 1967. What the location quotients are used for i n this chapter i s a comparison of the i n -dustrial structure of British Columbia with that of Canada. Principles of location theory are used in attempting to explain the relative concentration 63 TABLE V STATISTICS PERTAINING TO THE VALUE OF SHIPMENTS OF GOODS OF OWN MANUFACTURE, BY INDUSTRY GROUP AND INDUSTRY, BRITISH COLUMBIA, 1967 • #3.I.C. Value of Shipments B.C. Shipments as % L o c a t i o n Code of B.C. Establishments of Canadian Shipments Quotient ($•000) T o t a l 3,189,977 8.19 1 581*, 1*28 7.87 0.96 101 89,908 5.19 O.63 1011 77,950 U.78 0.58 1012 (1,500) (7.29) (0.89) 1013 (io,U58) (12.52) (1.53) 103 23,118 9.86 1.20 105 77,621 6.80 0.83 107 - - -111 105,1*93 36.53 1*.1*6 112 5U,096 10.81* 1.32 123 35,733 6.92 0.8U 12U (150) (0.06) (0.01) 125 (300) (0.58) (0.07) 128 2,162 1.82 0.22 129 1*0,357 8.1*6 1.03 131 2,322 1.13 0.1U 133 (19,507) (13.59) (1.66) 135 - - -139 56,935 8.85 1.08 1391 (U35) (1.71) (0.21) 1392 (56,500) (9.15) (1.12) 11*1 18,351 6.36 0.78 1U3 (22,381) (7.96) (0.97) 1U5 30,221* 9.03 1.10 11*7 5,770 21.79 2.66 2 151 — - -153 - - -3 (1,333) (0.23) (0.03) 161 _ 163 - - -169 (1,333) (0.62) (0.08) 1* 3,U16 0.93 0.11 172 (329) (0.56) (0.07) 171* (907) (0.1*1) (0.05) 175 (616) (U.17) (0.51) TABLE V (continued) 61* S.I.C. Value of Shipments Code of B.C. Establishments ($•000) 179 (1,56U) 1792 1799 (1,5610 5 12,91*9 183 193 197 (2,271) 201 211 (557) 212 213 2,1+87 211* 215 (31*5) 216 (577) 218 (29) 219 221 2,753 223 (9010 229 3,026 2291 2292 (132) 2299 (2,8910 6 (U,660) 231 239 (U,660) 7 23,233 21*3 12,151 21*31 12,151 21*32 21*1* 10,509 21*1*1 10,509 21*1*2 21*5 (1*5) 21*6 (1*32) 21*7 (96) 21*8 21*9 21*91 21*99 B.C. Shipments as % L o c a t i o n of Canadian Shipments Quotient (2.06) (0.25) (2.58) (0.32) 0.92 0.11 (2.35) (0.29) (3.16) (0.39) 11.1*2 1.39 (3.51) (0.U3) (0.51*) (0.07) (0.08) (0.01) 9.83 1.20 (2.96) (0.36) 1.3U 0.16 (1.05) (0.13) (2.21) (0.27) (1.1*3) (0.17) (1.96) (0.210 1.97 0.21* 2.79 0.31* 2.97 0.36 2.2U 0.27 2.37 0.29 (O.OlO (0.00) (0.61*) (0.08) (0.38) (0.05) TABLE V (continued) S.I.C. Value of Shipments B.C. Shipments as % L o c a t i o n Code of B.C. Establishments of Canadian Shipments Quotient ($•000) 8 902,385 251 666,1*92 2511 27,120 2513 639,372 252 166,31*8 251* 1*3,317 251*1 U3,317 251*2 256 2,299 258 951 259 22,978 2591 (10,000) 2592 (1,000) 2599 (11,978) 9 37,891 26l 20,793 261* (51*7) 266 15,891* 268 (657) 10 553,171* 271 1*97,1*31* 272 (3,709) 273 (1*7,576) 2731 (13,089) 2732 (19,870) 2733 11*, 617 271* 1*,1*55 11 86,982 286 30,937 287 3,295 288 5,261* 289 1*7,1*86 12 216,673 291 22,803 292 (5,171) 291* 7,777 295 (11*7,957) 296 (13,000) 297 (13,795) 298 6,170 53.85 6.58 67.1*9 8.21* 97.76 11.91* 66.62 8.13 65.07 7.95 15.60 1.90 17.02 2-. 08 U.99 0.61 6.31* 0.77 2U.51 2.99 (29.38) (3.59) (7.30) (0.89) (26.01*) (3.18) 5.92 0.72 6.17 0.75 (0.76) (0.09) 7.1*8 0.91 (3.1*2) (0.1*2) 17.12 2.09 21.62 2.61* (6.23) (0.76) (8.68) (1.06) (8.10) (0.99) (8.66) (1.06) 9.31 1.11* 1.38 0.17 6.70 0.82 5.18 0.63 1*.17 0.51 U.73 0.58 9.31 1.11* 7.10 0.87 1.86 0.23 (2.1*6) (0.30) U.10 0.50 (17.16) (2.10) (6.91) (0.81*) (5.81*) (0.71) l * . 5 l 0.55 66 TABLE V (continued) S.I.C. Value of Shipments Code of B.C. Establishments ($•000) 13 171,369 301 2,91*0 302 38,513 303 12,970 301* 1*2,601 305 21,890 306 12,61*3 307 2,031* 308 21*, 358 309 13,1*20 11* 61,513 311 371* 315 60,059 316 (730) 318 (350) 15 107,051 321 1,730 323 29,288 321* 11,321 325 (1,350) 326 327 56,552 328 6,778 329 (32) 16 53,39k 331 (1,276) 332 331* (221) 335 (23,120) 336 (8,751*) 337 1,1*97 338 (11*,653) 339 (3,873) 17 71,023 31*1 (ll*,027) 31*3 31*5 (6,850) 31*7 6,985 31*8 30,1*1*8 B.C. Shipments as % L o c a t i o n of Canadian Shipments Quotient 6.27 0.77 2.13 0.26 10.36 1.26 5.77 0.70 5.99 0.73 5.96 0.73 5.66 0.69 1.89 0.23 12.78 1.56 3.39 O .Ul 1*.06 0.50 0.12 0.01 6.11 o.75 (1.30) (0.16) (0.23) (0.03) 2.27 0.28 0.28 0.03 1.18 o. iU 7.77 0.95 (0.15) (0.02) 19.76 2. ia 22.52 2.75 (o.oi*) (0.00) 2.31 0.28 (1.00) (0.12) (0.12) (0.01) (3.71*) (0.1*6) (2.01*) (0.25) 2.55 0.31 (l*.6l) (0.56) (1.1*9) (0.18) 6.56 0.80 (10.01*) (1.23) (1U.78) (1.80) 3.61 0.1*1* 13.1*1 1.61* TABLE V (continued) 67 S.I.C. Value of Shipments B.C. Shipments as % L o c a t i o n Code of B.C. Establishments of Canadian Shipments Quotient ($'000) 351 (6,191) (7.78) (0.95) 3511 (3,200) (7.25) (0.89) 3512 (2,991) (8.1*1*) (1.03) 352 (581*) (1.90) (0.23) 353 21*0 2.36 0.29 351* (881*) (2.78) (0.31*) 355 659 1.56 0.19 356 (3,318) (1.73) (0.21) 3561 (2,500) (2.1*1) (0.29) 3562 (818) (0.93) (0.11) 357 - _ 359 837 U.87 0.59 18 (158,287) (10.16) (1.21*) 365 (15U,81U) (10.05) (1.23) 3651 15**,766 10.27 1.25 3652 (1*8) (0.11*) (0.02) 369 (3,1*73) (19.53) (2.38) 19 116,753 5.15 0.63 371 (3,957) (U.06) (0.50) 372 2,101 2.08 0.25 373 8,208 5.08 0.62' 372; (808) (0.27) (0.03) 375 21,996 10.31 1.26 376 2,825 1.27 0.16 377 (35) (0.03) (0.00) 378 (69,500) (8.73) (1.07) 379 7,323 2.78 0.31* 3791 1,190 1*.1*8 0.55 3799 6,133 2.59 0.32 20 23,1*63 2.16 0.26 381 5,396 1.71 0.21 3811 (186) (0.08) (0.01) 3812 - - — 3813 231 U . o i 0.1*9 381U (1,969) (6.16) (0.75) 3815 3,010 11*. 03 1.71 382 2,089 2.08 0.25 383 651* 1.87 0.23 381* 299 11.22 1.37 385 1*,886 1.79 0.22 68 TABLE V (continued) S.I.C. Code Value of Shipments of B.C. Establishments ($•000) B.C. Shipments as % of Canadian Shipments L o c a t i o n Quotient 393 1,296 1.16 0.1U 3931 (1,250) (2.23) (0.27) 3932 (U6) (0.08) (0.01) 395 (50) (0.77) (0.09) 397 5,603 8.17 1.00 398 (1,366) (1.17) (0.1U) 3981 - - -3982 (20) (0.52) (0.06) 3983 (76) (3.59) (o.UU) 398U - - -3985 323 1.31 0.22 3986 (100) (0.31) (0.0U) 3988 (697) (5.77) (0.70) 3989 (150) (0.71) (0.09) 399 (1,82U) (3.35) (o.Ui) 3995 68U 6.95 0.85 3996 163 1.91 0.23 3997 (520) (18.29) (2.23) 3998 277 8.51 1.0U 3999 (180) (0.60) (0.07) Source: Adapted from Manufacturing I n d u s t r i e s of Canada: S e c t i o n A (Summary f o r Canada) (1967, Tables 7, 8) Note: F i g u r e s i n parentheses are estimates. # See Appendix B f o r l i s t of i n d u s t r i e s by Standard I n d u s t r i a l C l a s s i f i c a t i o n Code. 69 of specific industries, and a cla s s i f i c a t i o n of industries based particu-l a r l y on the criterion of the nature of the markets both in terms of type and location i s made. Market Area Orientation of Industries Table VI l i s t s industries i n order of their location quotients, begin-ning with those industries in which the province i s most highly specialized. Data from Destination of Shipments of Manufacturers have been included so that the market area orientation of each of the province's industries may be determined. The choice of the particular allocation of provinces to market areas has been based on variations i n the proportions of total Cana-dian manufactured shipments accounted for by British Columbia plants. These figures for the 10 Canadian provinces and the terr i t o r i e s are l i s t e d i n Table VII. Thus B.C. plants account for more than half of manufactured goods destined for B.C. markets, about Q% of goods for Alberta markets, 3.5-5% of goods for Manitoba and Saskatchewan markets, and roughly 1% of goods for the other provinces. Although B.C.'s "market penetration" of the Yukon and Northwest Territories i s much greater than i t s penetration of eastern Canada, i t was decided to include them with the east because in absolute terms they are only a minor market for B.C. manufacturing plants. For each industry the proportion of goods shipped to each market area is indicated in Table VI. Each percentage i s compared with the corres-ponding figure for the all-industry t o t a l . The last column of the table gives the market area orientation. Whenever an industry ships a greater proportion of i t s product to a non-B.C. market area than do a l l industries considered together, that industry i s considered to be oriented to the mar-ket area i n question, under the following conditions: If an industry ships 70 TABLE VI VALUE OF SHIPMENTS OF GOODS OF OWN MANUFACTURE BY FIRST GEOGRAPHICAL DESTINATION, EXPRESSED AS A PERCENTAGE OF TOTAL VALUE OF SHIPMENTS, BY 'THREE- AND FOUR-DIGIT INDUSTRIES, MARKET AREA ORIENTATION OF INDUSTRIES, BRITISH COLUMBIA, I967 S.I.C. L o c a t i o n B.C. A l b e r t a Sask.- Rest of Fore i g n Market Code Quotient Man. Canada O r i e n t a t i o n T o t a l 1*8.33 5.21 3.30 6.69 36.1*7 2511 11.91* 19.15 0.1*7 (0 .5D (2.78) 77.09 World 2513 8.13 22.83 2.59 2.08 1*.03 68.2*7 World 252 7.95 21.28 9.19 8.81 37.31* 23.38 N a t i o n a l 111 l*.l*6 26.96 2.19 l*.i*3 27.91 38.51 World 259 2.99 55.60 7.61* 3.39 16.90 16.1*7 N a t i o n a l #328 2.75 93.81 (0.86) (0.56) (1.77) 3.01 B.C. 1U7 2.66 78.11 (10.00) (7.89) l*.oo — Western 271 2.61* 13.28 2.98 1.50 2.95 79.28 World #327 2.1*1 91.1*0 - - 7.95 0.65 B.C. 369 (2.38) (69.91) (0.11*) _ — (29.95) B.C. 3997 (2.23) (96.15) (2.88) (0.96) — B.C. 295 (2.10) (27.25) (0.03) - (0.00) (72.72) World 251*1 2.08 61.79 10.30 12.32 11.1*5 1*.13 N a t i o n a l 32*5 (1.80) 100.00 - — — B.C. 3815 1.71 100.00 _ _ _ B.C. 133 (1.66) (72.60) (16.77) (9.W*) _ (1.18) Western 3U8 1.61* (99.81*) - - - (0.16) B.C. 308 1.56 90.89 0.25 (0.11) (1.92) 6.83 B.C. 213 1.39 59.1*3 8.56 (3.82) (19.58) (8.60) N a t i o n a l 381* 1.37 (99.67) - - (0.33) — B.C. 112 1.32 I*l*.l5 22.17 15.75 12.98 1*.95 N a t i o n a l 302 1.26 79.58 15.80 - (1.50) (3.12) Far Western 375 1.26 63.33 22.53 (9.23) (3.77) l . l l * Western 3651 1.25 98.1*1* (0.30) - (1.17) (0.08) B.C. 31*1 (1.23) (95.32) - - (1.1*8) (3.21) B.C. 103 1.20 87.62 5.68 (0.56) (0.03) 6.10 Far Western 221 1.20 100.00 - — _ _ B.C. 2733 l . l l * 71*. 1*1 16.73 7.79 (0.1*7) (0.60) Western #289 l . l i * 99.91* (0.03) (0.01) (0.02) (0.01) B.C. 1392 (1.12) (58.75) (28.61*) (8.09) (1*.5D (0.01) Western 11*5 1.10 99.02 - - (0.65) (0.33) 3.C. 378 (1.07) (39.51*) (13.77) (16.56) (0.23) (29.90) Western 2732 (1.06) (76.1*0) (13.01*) (8.91*) (1.60) (0.03) Western 3998 1.01* 100.00 - _ _ _ B.C. 129 1.03 95.1*9 2.10 (0.90) (0.1*5) 1.06 B.C. 3512 (1.03) (38.1*5) (18.05) (18.76) (2U.71*) - N a t i o n a l 397 1.00 83.12 11*. 92 (0.89) (0.89) (0.18) Far Western 2731 (0.99) (92.19) (3.13) (1*.68) — — B.C. 11*3 (0.97) (26.36) (U.91) (5.1*6) (9.95) (53.32) World 71 TABLE VI (continued) S.I.C. L o c a t i o n B.C. A l b e r t a Sask.- Rest of Fo r e i g n Market Code Quotient Man. Canada O r i e n t a t i o n #321* 0.95 59.38 10.89 (9.55) (10.69) 9.50 N a t i o n a l 266 0.91 92.51 (U.3U) (2.35) (0.70) (0.09) B.C. 3511 (0.89) (72.28) (0.25) (0.19) (6.75) (20.53) B.C. 3995 0.85 (97.95) (1.61) (0.29) (0.15) - 3.C. 123 0.8U 96.39 2.21* (0.16) (1.21) - B.C. 296 (0.81*) (55.78) (19.1*1) (6.51*) (2.88) (15.38) Western 105 0.83 97.03 (0.80) (1.61*) (0.01) 0.53 B.C. 11*1 0.78 (99.U6) - - (0.51*) - B.C. 258 0.77 100.00 - - - - B.C. 272 (0.76) 0.75 (9U.88) (1.61*) (1.32) (1.35) (0.81) B.C. 261 90.79 2.98 (0.1*2) (U.52) (1.29) B.C. #315 0.75 1*5.91* U . 7 2 (2.11) (17.12) 30.11 N a t i o n a l 381U (0.75) 100.00 - - - - B.C. #301* 0.73 93.33 6.23 (0.1*3) (0.02) - Far Western 305 0.73 61*.87 16.11 3.90 9.19 5.93 N a t i o n a l 297 (0.71) (36.1*3) (13.00) (9.80) - (1*0.76) World #303 0.70 95.21 (0.71*) (U.oo) (0.05) _ B.C. 3988 (0 . 7 0 ) (1*5.19) (17.79) (ll * . 20 ) (22.81) - N a t i o n a l #306 0.69 32.63 (8.81) (5.03) (1*2.56) 10.97 N a t i o n a l 101 0.63 87.35 2.55 1.1*3 3.51 5.16 B.C. 286 0.63 88.88 1*.68 3.10 (2.95) (0.39) B.C. 373 0.62 (99.55) (0.1*5) - - - B.C. 256 0.61 100.00 - - - _ B.C. 359 0.59 (95.58) (1*.1*2) - - B.C. #288 0.58 95.15 (2.32) (1.19) (0.81) (0.51*) B.C. 338 0.56 (68.62) (13.65) (3.75) (6.11*) (7.83) Western 298 0.55 93.31* (0.1*9) (0.08) (5.77) (0.32) B.C. 3791 0.55 83.19 5.1*6 10.59 0.76 — Western 175 (o.5D 100.00 - — - _ B.C. 287 o.5i 98.12 (0.36) (0.82) (0.61*) (0.06) B.C. #291* o.5o 92.91 3.00 (3.99) (0.09) - B.C. 371 (o.5o) 100.00 - - — — B.C. 3813 0.1*9 9U.37 (1.73) (1.73) (2.16) - B.C. #335 (o.l*6) (29.00) (12.60) (16.00) (26.82) (15.58) N a t i o n a l 31*7 0.1*1* 99.33 - - (0.63) (0.01*) B.C. 3983 (0.1*1*) 100.00 - - - B.C. 215 (0.1*3) 100.00 - - _ B.C. 268 (0.1*2) 100.00 - - - B.C. #309 0.1*1 88.22 1*.95 1.37 (U.83) (0.63) B.C. 211 (0.39) (89.05) (10.95) - - - Far Western 223 (0.36) (51.99) (1*2.70) (5.09) (0.22) — Western 21*31 0.36 72.78 17.33 3.79 5.1*2 0.68 Western 351* 0.3U (83.03) (11.31) (5.66) - - Western 1799 (0.32) 100.00 - - - - B.C. 3799 0.32 55.73 (8.97) (1.66) (0.60) (33.03) Far Western TABLE VI (continued) 72 S.I.C. L o c a t i o n B.C. A l b e r t a Sask.- Rest of Fore i g n Market Code Quotient Mari. Canada O r i e n t a t i o n 337 0.31 100.00 _ B.C. 292 (0.30) (90.89) (9.11) - - - Far Western 197 (0.29) (32.78) (11.1*1*) (9.33) (1*6.1*6) - N a t i o n a l 21*1*1 0.29 1*6.1*6 9.31 7.16 21.37 15.71 N a t i o n a l 353 0.29 (95.83) (U.17) - - - B.C. 3561 (0.29) (99.92) - - (0.08) - B.C. 2299 (0.27) (96.31*) (2.25) (0.86) (0.55) - B.C. 3931 (0.27) (67.68) (U.08) (6.80) (12.61*) (8.80) N a t i o n a l #301 0.26 95.58 (2.35) (2.00) ( - ) (0.07) B.C. 336 (0.25) (51.31) (18.09) (15.08) (3.19) (12.33) Western 372 0.25 (95.10) - - - (i*.90) B.C. 382 0.25 (81*.Ui) (6.32) (U.07) (5.17) - Western 239 (0.21*) (21.39) (16.66) (1U.52) (U7.U2) - • N a t i o n a l 291 0.23 80.1*9 U.61* (0.06) (10.07) l*.7i* B.C. 307 0.23 81*.27 (13.18) - (2.1*6) (0.10) Far Western 352 (0.23) 100.00 - - - - B.C. 383 0.23 100.00 - - - - B.C. 3996 0.23 100.00 - - - - B.C. 128 0.22 63.92 (20.81) (10.18) (3.70) (1.39) Western 335 0.22 89.03 1.1*5 (1.71*) (3.32) U.U6 B.C. 3985 0.22 100.00 - - - - B.C. 1391 (0.21) (89.66) (7.36) (1.38) (1.38) (0.23) Far Western 355 0.19 (93.78) - - - (6.22) B.C. 339 (0.18) 100.00 - - - - B.C. 271* 0.17 87.81 5.30 (0.90) (0.07) 5.93 Far Western 316 (0.16) 100.00 - - - - B.C. 376 0.16 (88.71) 6.62 (1*.67) - - Western 131 0.1U (86.13) (8.61) (5.25) - - Western #323 o.m (1*2.UO) (16.77) (5.58) (13.38) (21.87) N a t i o n a l 2292 (0.13) (89.39) - - (10.61) - B.C. 331 (0.12) (51*.86) (39.89) (3.13) (2.12) - Far Western 3562 (0.11) (61.37) (38.63) - - - Far Western 261* (0.09) (91.76) (6.01*) (1.83) (0.37) - Far Western 395 (0.09) 100.00 - - - - B.C. 3989 (0.09) 100.00 - - - - B.C. 169 (0.08) 100.00 - - - - B.C. 21*6 (0.08) 100.00 - - - - B.C. 125 (0.07) (96.67) - - - (3.33) B.C. 172 (0.07) (58.66) (18.21*) (13.21*) (i*.86) - Western 216 (0.07) 100.00 - - - - B.C. 3999 (0.07) (83.33) - - (2.22) (11*.1*1*) B.C. 3982 (0.06) 100.00 - - - - B.C. 171* (o.o5) (81*.56) (11.03) (1*.1*D - - Western 21*7 (o.o5) 100.00 - - - - B.C. TABLE VI (continued) 73 S.I.C. L o c a t i o n B.C. A l b e r t a Sask.- Rest of Fo r e i g n Market Code Quotient Man. Canada O r i e n t a t i o n 3986 (O.Oi*) 100.00 — - - B.C. 318 (0.03) (8U.86) (6.00) (3.71) - (5.1*3) Western #321 0.03 100.00 - - - - B.C. 371* (0.03) (78.09) (7.1*3) (6.93) (7.55) - N a t i o n a l #325 (0.02) (95.18) (0.80) (0.80) - (3.22) B.C. 3652 (0.02) 100.00 - - - - B.C. 121* (0.01) 100.00 - - - - B.C. 218 (0.01) 100.00 - - - - B.C. 311 0.01 100.00 - - - - B.C. 331* (0.01) (99.10) - - (0.90) - B.C. 3811 (0.01) 100.00 - - - - B.C. 3932 (0.01) 100.00 - - - - B.C. 21*5 (0.00) 100.00 - - - B.C. 329 (0.00) 100.00 - - - - B.C. 377 (0.00) 100.00 - - - - B.C. Source: Adapted from D e s t i n a t i o n of Shipments of Manufacturers (1967, Table T) Note: F i g u r e s i n parentheses are estimates. # The d e s t i n a t i o n of shipments data exclude a d v e r t i s i n g revenue from the f o l l o w i n g i n d u s t r i e s : (1) S.I.C.288, 1,856/5,26U=35.26* of t o t a l value of production accounted f o r i n above t a b l e ; (2) S.I.C.289, 15,l463/U7,U86-32.56* The d e s t i n a t i o n of shipments data exclude revenue r e c e i v e d from r e p a i r work from the f o l l o w i n g i n d u s t r i e s : (1) S.I.C.291*, 7,593/ 7,777=97.63*; (2) S.I.C.301, 2,89l*/2,91*0=98.1*1$; (3) S.I.C.303, 12,962/12,970=99.91**; (1*) S.I.C.301*, 1*2,51*7/1*2,601=99.87*; (5) S.I.C.306, 12,526/12,61*3=99.07*; (6) S.I.C.309, 13,1*07/ 13,1*20=99.90*; (7) S.I.C.315, 58,550/60,059=97.1*9*; (8) S.I.C.321, 563/1,730=32.51**; (9) S.I.C.323, 27,850/29,288=95.09*; (10) S.I.C.321*, 10,233/11,321=90.39*; (11) S.I.C.325, (1,21*1*)/ (1,350)=(92.15*); (12) S.I.C.327, 39,388/56,552=69.65*; (13) S.I.C.328, 5,378/6,778=79.3U*; ( l l * ) S.I.C.335, (23,089)/ (23,120)=(99.87*) 71* TABLE V I I TOTAL VALUE OF SHIPMENTS OF GOODS OF OWN MANUFACTURE OF ALL BRITISH COLUMBIA ESTABLISHMENTS BY FIRST GEOGRAPHICAL DESTINATION, EXPRESSED AS A PERCENTAGE OF TOTAL VALUE OF SHIPMENTS OF ALL CANADIAN MANUFACTURING ESTABLISHMENTS BY FIRST GEOGRAPHICAL DESTINATION, 1967 Province or T e r r i t o r y B.C. Shipments A l l Canadian B.C. Shipments Shipments as a % of Canadian Shipments ($'000) B r i t i s h Columbia 1,512,9U8 2,750,958 55.00 A l b e r t a 163,092 1,967,71*2 8.29 Saskatchewan 52,919 l ,03l*,939 5.11 Manitoba 50,351 1,1*08,991 3.57 Ontario 121,370 l l i , l 6 9 , 803 0.86 Quebec 63,U75 8,878,035 0.71 New Brunswick 1*,970 689,195 0.72 Nova S c o t i a 8,251* 739,968 1.12 P r i n c e Edward I s l a n d 1,192 112,268 1.06 Newfoundland i*,380 31*1,031* 1.28 Yukon and Northwest T e r r i t o r i e s 5,669 1*8,01*1 11.80 Source: Adapted from D e s t i n a t i o n o f Shipments of Manufacturers (1967, Table I) 75 a disproportionately large amount of i t s product to Alberta ( i . e . more than 5.21$) i t s market area orientation i s considered to be "far western", pro-vided that shipments to each of the other three non-B.C. market areas are a l l below average. An industry with a disporportionately large part of shipments destined for Manitoba and Saskatchewan, but with below average shipments to the eastern Canadian and foreign markets, is considered to have a "western" orientation i f the sum of shipments to a l l Prairie Prov-inces ( i . e . including Alberta) is above average (more than 8.51$). Simi-l a r l y an industry has a "national" orientation i f the proportion of goods shipped to foreign markets is below average, the proportion of goods shipped to eastern Canadian markets (including the territories) i s above average, and the sum of goods shipped to a l l of Canada, with the exception of B.C., i s more than average (more than 15*20$). In order for an industry to be considered "world" oriented i t s shipments to foreign markets must be above average and i t s shipments within B.C. below average. A l l industries which do not satisfy any of the above conditions are classified as B.C. oriented. Analysis of the Structure of B.C. Manufacturing Judging by the values of the location quotients i t i s quite evident that the structure of B.C. manufacturing i s unlike that of Canada as a whole. In this section an attempt w i l l be made to explain why, relative to the nation as a whole, B r i t i s h Columbia i s overrepresented i n some manufac-turing industries and underrepresented in others. Industries w i l l , for the time being, be grouped according to the value of their location quotients. F i r s t of a l l the industries i n which B.C. is very specialized (location quotients greater than 2.0) w i l l be discussed. Next w i l l be an analysis of the underrepresented industries (location quotients less than 0.5). F i n a l l y 76 the industries with f a i r l y average location quotients (between 0.5 and 2.0) w i l l be discussed. Within these three groups other c r i t e r i a of the indus-tri e s such as absolute size, market area orientation, and type of market (business, household, other manufacturing industry) w i l l be used to further subdivide the industries for easier examination. Industries with Location Quotients of Greater than 2.0 Large industries with world or national markets. In terms of three c r i t e r i a — h i g h degree of specialization (location quotient of more than 2.0), large absolute size (annual shipments i n excess of $100,000,000) and "world" or "national" market area orientation, five British Columbia indus-tries distinguish themselves from a l l others. These are the f i s h products industry (S.I.C. I l l ) , sawmills and planing mills (S.I.C. 2513), veneer and plywood mills (S.I.C. 252), pulp and paper mills (S.I.C. 271) and smelting and refining (S.I.C. 295). Together these industries account for almost exactly one-half the shipments of a l l manufacturing industries i n the prov-ince and one-third of the shipments of a l l Canadian establishments clas-s i f i e d to these five industries. In addition these industries account for more than 75* of B.C. manufactured products sent out of the province and almost 90* of B.C. manufactured goods sent to foreign markets. The domi-nance of B r i t i s h Columbia manufacturing by these five industries i s the characteristic which differentiates the province's structure most clearly from that of Canada as a whole. A l l five of these industries are alike i n nature in being primary pro-cessing industries. They are what Hoover (op_. c i t . , 31-35) classifies as "material-oriented industries". The raw materials received from the prov-ince's major extractive industries—forestry, mining and fishing—are either subject to relatively large weight losses in i n i t i a l processing or, on the 77 other hand, to perishability. The degree to which the raw materials of the aforementioned extractive industries are subject to manufacturing activity before export from the province varies from one industry to another. Almost a l l the timber harvest of the province i s subject to some degree of processing. Thus the Bri t i s h  Columbia Financial and Economic Review (1968, 1*3) estimates that in 1967, 75* of timber cut i n the province was used for lumber, shingles and millwork, 15% for wood pulp, and 1% for veneer and plywood. Only 3% was used for other primary wood products such as poles, posts, p i l i n g , etc. or was exported i n the form of logs. As regards raw materials derived from the mining sector (excluding fuels and non-metallic minerals) manufacturing plays a much less significant role. The value of metals produced i n Bri t i s h Columbia in 1967 was $235,932,000 (ibid., 1*7, Table 28). Well over 90* of the value was ac-counted for by six metals: copper ($88,135,000), zinc ($39,21*9,000), lead ($31,U32,000), molybdenum ($31,250,000), iron concentrates ($20,821,000) and silver ($10,329,000). Of these only zinc, lead and silver are prima-r i l y exported i n a refined form. The weight-reducing process of concentra-ting minerals, which usually takes place at or near the mine, i s not con-sidered a manufacturing activity. There are two smelters located in Br i t i s h Columbia. The metallurgical works at T r a i l (CD. '2) is concerned primarily with the production of refined zinc, lead and si l v e r . The other smelter, Alcan, at Kitimat (CD. 9) which produces aluminum ingots i s not located in Bri t i s h Columbia because of nearness to the raw material: no bauxite i s mined in the province. Here the major locational factor i s a v a i l a b i l i t y of low-cost hydro-electric power, used in vast quantities in the electrolytic process of converting alumina into aluminum. 78 As for the fishing industry, by far the most important species caught i s salmon, accounting for 80% of the wholesale marketed value of f i s h prod-ucts i n Bri t i s h Columbia i n 1967 (ibid., 50). As with timber, almost a l l salmon i s subject to some degree of processing, only k% being marketed fresh in 1967 (British Columbia Facts and Statistics , 1968, i*6). Of the t o t a l value of a l l f i s h products only about Q-9% was sold i n fresh form i n 1967 (Fisheries S t a t i s t i c s : B r i t i s h Columbia and Yukon, 1967, Table 5) . As with smelting and refining, although to a much more limited extent, the f i s h products industry i s pa r t i a l l y concerned with the processing of imported raw materials. Specifically imported tuna i s canned i n Br i t i s h Columbia, but the value of production i s less than 5% of the f i s h processing indus-try's shipments (i b i d . ) . Other industries with location quotients of greater than 2.0. Besides the five major primary processing industries of the province there are eight other manufacturing activities in which British Columbia i s very special-ized. One of these industries, shingle milling (S.I.C. 2511) is another raw material oriented adjunct of the province's forest industry. B.C. ac-counts for almost a l l Canada's production of shingles and shakes. Miscel-laneous wood industries (S.I.C. 259) consist of the wood preservation i n -dustry (S.I.C. 2^91), the wood turning industry (S.I.C. 2592—producing handles of a l l kinds) and miscellaneous wood industries, n.e.s. (not else-where specified) (S.I.C. 2599). These four-digit industries have not been reported separately i n Table VI because i t was only possible to calculate the destination of shipments ratios for the three-digit industry. The wood preservation industry produces treated lumber for such uses as poles, r a i l -way ties , dock p i l i n g , and signs and fence posts. Miscellaneous wood indus-t r i e s , n.e.s. produce such things as cooperage, sidewall- shakes, wood cas-79 ings, particle board, crossarms, pulp wood chips and pressed sawdust logs. These industries would appear to gain advantages by locating close to their material supply, but they are distinctly less concentrated i n B.C. (relative to the rest of Canada) than the sawmills which supply their raw materials. This i s because the major weight- and bulk-reducing part of wood conversion takes place at the sawmilling stage (Cohn, op. c i t . , 76). Sash, door and other millwork plants (S.I.C. 2£Ul) are relatively mar-ket oriented compared with the other wood industries so far considered (most provinces manufacture at least one-half of their demand for the products of this industry). According to Munro (op. c i t . , 93) "the industry [in B . c J is to a very considerable degree independent of the primary forest indus-tries " because i t relies on imported hardwoods as well as some l o c a l l y produced lumber for i t s raw material. Customization i s quite an important characteristic of the industry, a factor which obviously makes market o r i -entation an advantage. Unfortunately i t has not been possible to obtain a breakdown of the types of vessels constructed by the province's shipbuilding and repair (S.I.C. 327) and boatbuilding and repair (S.I.C. 328) industries. The DBS defines the shipbuilding industry as consisting of those establishments "primarily engaged in building and repairing a l l types of ships of more than 5 tons displacement" (Shipbuilding and Repair, op. c i t . , introduction). Boatbuilding establishments are primarily engaged i n building smaller ves-sels. The impression gained from the examination of l i s t s of suppliers i n -cluded in professional forestry and fishing journals (British Columbia For-est Industries Yearbook, 1967, Section G; Canadian Fisherman & Ocean S c i -ence, February, 1972, 1972 Buyers' Guide) as well as the B r i t i s h Columbia  Manufacturers' Directory (1966) and the British Columbia Trade Directory 80 (1971) is that the shipbuilding industry has strong linkages with the p r i -mary sector i n terms of building log and chip barges, tug boats and larger fishing vessels. Moreover some of the larger shipbuilding establishments also manufacture, as a sideline, machinery for use by the forest products industries. It would appear, however, that while the boatbuilding industry constructs smaller fishing vessels, i t s major activity i n the province as a whole i s the building of pleasure craft. The other three specialized industries are small i n size. Wineries (S.I.C. 1U7) tend to be material oriented. The Canadian wine industry is very concentrated i n the two grape growing provinces of Ontario and B.C. Some wineries i n B.C. also use as raw materials l o c a l l y grown berries. Considering the high location quotient, relatively l i t t l e B.C. produced wine i s shipped out of the province. B r i t i s h Columbians, presumably largely because of government pricing policies, are large consumers of domestic wine. Other petroleum and coal products industries (S.I.C. 369) produce such things as asphalt paving materials, but the largest establishment in the province i s a coking plant i n Michel (CD. 1), associated with the Crowsnest Pass coal deposits. According to the Regional Index of Br i t i s h  Columbia (1966, l£) this i s "the only producer of coke in the western part of North America". Final l y umbrella manufacturers (S.I.C. 3997) f i t well into the category of industries which i n Cohn's (op_. c i t . , 1U8) words are "inspired by special local features of climate". Industries with Location Quotients of Less than 0.5 Industries with western, far western or B.C. markets. In direct con-trast to the five leading primary processing industries which dominate Br i t i s h Columbia manufacturing both i n terms of production and exports (to both Canadian and foreign markets), are those industries which are very 81 underrepresented i n the province, having l o c a t i o n q u o t i e n t s of under 0.5, and which are o r i e n t e d t o western, f a r western or B.C. markets. These 65 underrepresented i n d u s t r i e s , not s u r p r i s i n g l y , d i f f e r i n nature one from another, and t h e r e f o r e a s i n g l e l o c a t i o n f a c t o r cannot be chosen t o e x p l a i n t h e i r r e l a t i v e unimportance i n the province's manufacturing s t r u c t u r e . Nevertheless, some g e n e r a l i z a t i o n s can be made. Two-thirds of these indus-t r i e s produce consumer goods or goods which are purchased by commercial or i n d u s t r i a l f i r m s , where B.C. demand i s f a i r l y p r o p o r t i o n a l t o i t s s i z e r e l a -t i v e t o the r e s t of Canada. The major i n d u s t r i e s (where "major" i s defined i n terms of n a t i o n a l shipments i n excess of $100,000,000 i n 1967) i n the consumer goods category are b i s c u i t manufacturers (S.I.C. 128), c o n f e c t i o n e r y manufacturers (S.I.C. 131), shoe f a c t o r i e s (S.I.C. 171*), the ca r p e t , mat and rug i n d u s t r y (S.I.C. 216), the miscellaneous t e x t i l e s i n d u s t r y , n.e.s. (S.I.C. 2299—this i n d u s t r y i n c l u d e s establishments making c u r t a i n s , d r a -p e r i e s , bedspreads, e t c . ) , men's c l o t h i n g f a c t o r i e s (S.I.C. 21*31), c h i l d r e n ' s c l o t h i n g f a c t o r i e s (S.I.C. 21*5), miscellaneous paper converters (S.I.C. 271*— waxed paper, t i s s u e s , paper towe l s , napkins, e t c . ) , manufacturers of s m a l l e l e c t r i c a l appliances (S.I.C. 331), manufacturers of household r a d i o and t e l e v i s i o n r e c e i v e r s (S.I.C. 331*), manufacturers of soap and c l e a n i n g com-pounds (S.I.C. 376), manufacturers of t o i l e t p r eparations (S.I.C. 377) and j e w e l l e r y and s i l v e r w a r e manufacturers (S.I.C. 382). In the second category (producing goods mainly f o r business use) f i t the f o l l o w i n g major i n d u s t r i e s : other rubber i n d u s t r i e s (S.I.C. 169—rubber-i z e d f a b r i c s , mechanical rubber goods, rubber f l o o r i n g , e t c . ) , b o i l e r and p l a t e works (S.I.C. 301), miscellaneous metal f a b r i c a t i n g i n d u s t r i e s (S.I.C. 309—"weather s t r i p p i n g , guns, c o l l a p s i b l e tubes, machinery f i t t i n g s , plumb-er's goods, safes and v a u l t s , and f o r g i n g s such as chains, anchors and ax-82 les"—Miscellaneous Metal Fabricating Industries, 1967, introduction), office and store machinery (S.I.C. 318), manufacturers of e l e c t r i c a l industrial equipment (S.I.C. 336), manufacturers of miscellaneous e l e c t r i c a l products (S.I.C. 339—commercial, industrial, residential lighting fixtures, electric l i g h t bulbs and tubes, wiring devices, etc.), glass manufacturers (S.I.C. 3561), other chemical industries, n.e.s. (S.I.C. 3799—this industry pro-duces such things as polishes, pesticides, matches and adhesives), instru-ments and related products manufacturers (S.I.C. 3811), and plastic f a b r i -cators, n.e.s. (S.I.C. 385--plastic shapes and forms, plastic automobile accessories, plastic bottles, etc.). In general these aforementioned industries can be described as pro-ducing non-customized products for a national market, where production is subject to significant economies of scale or external economies. As such they tend to concentrate i n the area of highest market potential i n the country (southern Ontario and Quebec), where they are situated near a max-imum number of potential customers. Peripheral parts of the country ( i n -cluding B.C.) are then supplied from the centrally located manufacturing • firms. Almost without exception production i n these industries i s very concentrated i n the two central provinces (90-95* of national production i s common), and these two provinces supply v i r t u a l l y a l l of what B.C. buys from the rest of Canada. The only exceptions to this rule are three con-sumer oriented industries (biscuits, miscellaneous paper products and men's clothing) i n which relatively centrally located Winnipeg is a secondary production centre and a significant B.C. supplier, and one other industry, glass, in which Alberta is a major source of B.C. purchases. Attention, which has been b r i e f l y focussed on why B.C. i s underrep-resented in industries producing goods the demand for which i s f a i r l y 83 average i n the province, must now sh i f t to an examination of how B.C. firms can exist at a l l i n these sectors. Firms i n these industries i n B.C., l o -cated as they are i n an area which, relative to central Canada, has a low market potential, are much smaller than the national average (one-third to one-tenth the size i s common, based on value of shipments per establish-ment). They are therefore presumably faced with higher unit production costs, a factor which could account for the limitation of their markets to western Canada (in many cases only to B.C.). Moreover B.C. firms also must compete against central Canadian firms i n terras of advertising, which plays a large role i n selling the products of many of these industries. Rather than examine a l l of these underrepresented industries individ-ually certain ones w i l l be considered which illustrate some of the factors helping to account for these industries 1 presence in B.C. High transport costs can sometimes protect a regional industry. Miscellaneous paper con-verters i n B.C. receive some protection from large eastern firms because of distance (Munro, og. c i t . , 121). Presumably the cost of transporting paper products from central Canada to B.C. i s a f a i r l y significant propor-tion of total costs. The factor of distance protection may also help ac-count for the presence i n B.C. of a food industry such as biscuits, as well as the industry making glass containers and some of the chemical industries, producing such things as soaps, t o i l e t preparations and adhesives. Market segmentation may also allow regional production. For miscel-laneous metal fabricating industries, Munro (ibid., li+9) explains their operation i n the province by examining one activity, the production of chains, bolts and related products. This i s an industry which i s largely engaged i n providing customized products for the province's primary activ-i t i e s . As Munro states, "the changing and uncertain needs of the buyers make close contact with the buyers strongly desirable" (ibid ., 150). As w i l l be shown later, catering to the needs of a specific market may also help account for the presence of shoe manufacturing and the e l e c t r i c a l i n -dustrial equipment industry i n B.C. The men's clothing industry in B.C. i s described as "small but viable (ibid., 163). Unlike the miscellaneous paper industry clothing producers in B.C. probably receive no protection from eastern manufacturers because of distance, transportation costs being very low relative to the value of the good. Munro (ibid., 161-163) feels that regional variations i n tastes have helped a small clothing industry to locate i n B.C. A similar factor may help explain the presence of the jewellery industry i n B.C., together with the fact that some jewellery i s custom made. Turning to the other industries which are both underrepresented i n B.C. and oriented to provincial or western markets (i . e . those whose prod-ucts are consumed in relatively low quantities i n B.C.), one finds eight large national industries: flour mills (S.I.C. 121*), iron and steel mills (S.I.C. 291), steel pipe and tube mills (S.I.C. 292), agricultural imple-ment industry (S.I.C. 311), aircraft and parts manufacturers (S.I.C. 321), motor vehicle parts and accessories manufacturers (S.I.C. 325), concrete products manufacturers (S.I.C. 3U7) and mixed f e r t i l i z e r s (S.I.C. 372). In the case of aircraft and parts manufacturing, production i s very highly concentrated in Ontario and Quebec (roughly 97$ of Canada's produc-tion). In the rest of the nation (including B.C.) activity i n this indus-try i s primarily concerned with aircraft repair. Flour milling appears to be a moderately material oriented activity (weight loss i n milling i s about 25$--Cohn, op_. c i t . , 96). In Canada a l l three Prairie Provinces are surplus producers of flour, and as well as 85 supplying their local markets they ship the product to other parts of Canada and export roughly one-quarter of production. Nevertheless flour milling i s also characterized by f a i r l y large economies of scale, and as a result market oriented mills i n Ontario and Quebec supply most of the requirements of those provinces. B.C.'s lack of a significant flour milling industry would appear to be a result of the facts that f i r s t l y the province grows very l i t t l e wheat, and second the market i s too small to support an opera-tion that could compete with Prairie mills which at present meet almost a l l B.C.'s demand. Concrete products being relatively bulky and of low value are rarely transported from one province to another. The B.C. industry is relatively small, but i t nevertheless supplies about 90% of the province's consumption of concrete products of Canadian origin. The other five industries can perhaps best be classified as forwardly linked to primary or industrial sectors which are themselves underrepre-sented i n B.C. Thus, for example, the extremely small size of the agri-cultural implement industry i n B.C. is partly a reflection of the lack of large scale mechanized agriculture i n the province. Agricultural machinery is bought from manufacturers i n Ontario and Manitoba, the provinces which dominate the Canadian industry, but B.C. i s the destination of less than 1% of total Canadian production which is sold within Canada. That the i n -dustry i s present i n the province at a l l appears to be a reflection of spe-c i a l farming conditions. The industry i s limited to three small firms i n the Okanagan Valley (CD. 3) producing mainly orchard spraying equipment. There i s l i t t l e cross provincial trade i n mixed f e r t i l i z e r s (this i n -dustry excludes the production of those types of f e r t i l i z e r s which also have important industrial uses). B.C. is a small producer, but being a 86 small consumer as well, i t imports very l i t t l e (between 5 and 10* of demand) from other Canadian manufacturers. The motor vehicle parts and accessories industry, an obvious example of a sa t e l l i t e industry, i s not surprisingly very highly concentrated in Ontario, where the motor vehicle industry i t s e l f i s largely found. The relatively low value i n relation to weight of product has resulted in the decentralization of the production of steel pipe and tube. While Ontario i s the largest producer, Saskatchewan and Alberta produce between them about one-quarter of national production, indicating the importance of the manufacture of pipe for petroleum and natural gas transmission. There i s only one establishment i n B.C. primarily engaged in producing steel pipe and tube, and i t supplies approximately 35* of the provincial market. Presumably B.C.'s below average per capita demand can be met more cheaply by importing steel pipe from more optimally sized producers in Alberta and Ontario than by expanding local production. The largest industry of the five currently under consideration both in B.C. and Canada i s iron and steel. The B.C. industry is dominated by two plants owned by the same company. One is at Kimberley (CD. 1 ) , an example of a material oriented m i l l . Producing pig iron and steel ingots, i t s ex-istence i s based on iron tailings, a residual material from the Sullivan lead-zinc mine (Kerr, 1967, l i i l i ) . The other large iron and steel m i l l i s at Vancouver (CD. ii). It uses lo c a l supplies of scrap as well as some steel ingots from Kimberley as raw materials and overcomes the effect of higher production costs than t hose of the large integrated iron and steel works of eastern Canada by specializing in products for the local construc-tion industry which tend to be expensive to transport relative to their value (Munro, og. c i t . , 1U0). 87 Industries with national markets. The underrepresented industries in B.C. which have not yet been discussed are those which when they are present are nationally oriented i n terms of markets. These include wool cloth mills (S.I.C. 197), other knitting mills (S.I.C. 239—those mills producing knit-wear other than hosiery), women's clothing factories (S.I.C. 2UU1), motor vehicle manufacturers (S.I.C. 323) and communications equipment manufac-turers (S.I.C. 335)• The wool cloth industry i s dominated by one firm which approximates the national average i n size (in terms of value of shipments). It therefore would not appear to suffer from high production costs resulting from insufficient economies of scale. Moreover high quality cloth i s pro-duced, and the cost of transporting the product relative to i t s value is low (Munro, ibi d . , l 6 l ) . The v i a b i l i t y of one firm can perhaps be explained i n these terms, but the lack of the industry in general i s probably a ref l e c -tion of the fact that B.C. has no wool yarn industry to supply the raw ma-t e r i a l and only a limited garment industry to buy the cloth. The presence of two other industries i n B.C. seems to be the result of chance occurrences. The province's knitting m i l l industry i s dominated by one firm, a subsidiary of a Portland, Oregon company, which produces mainly swimwear for the national market. Cohn (op_. c i t . , 165), i n explaining the location of the factory i n Portland, and more particularly the decision of the owners not to move from that city, argues that "the preference of the owners for l i v i n g i n Oregon" is perhaps the most important factor, although the presence of a trained labour force may also have played a role. Pre-sumably Vancouver was chosen as the location for a Canadian subsidiary be-cause of i t s proximity to Portland. The explanation of a nationally o r i -ented communications equipment industry i n the province is similar. The products of the industry are relatively inexpensive to transport relative 88 to their value, a factor which makes the industry rather footloose. Once again production in B.C. is dominated by one firm, a subsidiary of a C a l i -fornia company. The reason for the B.C. women's clothing industry being relatively nationally oriented (and even selling some of i t s product in foreign mar-kets), whereas the men's clothing industry is oriented to western Canadian markets i s not immediately obvious. Part of the explanation may, however, l i e i n the fact that while B.C. men's wear plants are definitely smaller than the national average, women's clothing factories are closer to average size throughout Canada, and therefore they may be slightly more competitive on a national basis. Br i t i s h Columbia's motor Vehicle manufacturing industry is very small in national terms but i s nevertheless nationally oriented in terms of mar-kets because i t i s very different i n nature from the Canadian industry as a whole. In Ontario, which i n 1967 accounted for 90* of the value of ship-ments, the industry is dominated by a few companies mass producing mostly passenger automobiles, but also trucks. In British Columbia, on the other hand, the establishments classified to this industry are much smaller than their Ontario counterparts and are almost wholly concerned with the assem-bling of custom-built trucks. Three of the five companies, including the two largest, produce logging trucks; a l l five produce on-highway vehicles. As pointed out by Munro (op_. c i t . , 150) the logging trucks produced are designed for conditions of terrain type and tree-size found in Canada only in B r i t i s h Columbia. It would appear that while the highway trucks received their impetus for production in B.C. from the mountainous terrain, diversi-fication has occurred to the degree that export from the province to other parts of Canada has become a r e a l i t y . 89 Industries with Location Quotients Between 0.5 and 2.0 Industries characterized by l i t t l e interprovincial trade. The indus-tries which remain to be discussed are those which have location quotients ranging from 0.5 to 2.0—those industries in which the province i s neither particularly specialized or unspecialized. Of the 58 industries which are in this category, 31 can be considered to be relatively strongly oriented to local markets. In terms of destination of shipments these are industries which are characterized by relatively l i t t l e interprovincial trade. Thus for B.C. manufacturers the market orientation is to the province i t s e l f , or in some cases to far western (B.C.-Alberta) or western markets. The spe-c i f i c factors which account for the orientation of these industries to mar-kets which are i n relatively close proximity are several, although i n gen-eral terms high distribution costs are characteristic (Cohn, op_. c i t . , 11+9-150). Several of these l o c a l l y oriented (or localized) industries are in the food and beverage group. Breweries (S.I.C. 11+5) and soft drink manufac-turers (S.I.C. lUl) carry on notably weight-adding operations. Although some dairy products such as butter, cheese and powdered and evaporated milk can be transported over long distances, dairy factories (S.I.C. 105) are dominated in B.C. (75-80* of production—Munro, o£. c i t . , 132) by the pas-teurization and packaging of f l u i d milk, a highly market oriented process because i t i s considerably cheaper to transport raw milk than the finished product. Bakeries (S.I.C. 129) are extremely market oriented because of the perishability of their product. Their distribution pattern typically resembles that of the population as a whole, as indicated by Hoover (op. c i t . , 37) for the United States. Feed manufacturers (S.I.C. 123) also pro-duce a commodity which i s not important in interprovincial trade. 90 The explanation for the strong local market orientation of poultry processors (S.I.C. 103) i s perhaps less obvious than for the other food and beverage industries. Poultry processing i s a weight-reducing operation, but Kerr (1966, 35) suggests that because consumers generally prefer chilled to frozen poultry, market orientation of the industry i s necessary. Such small secondary wood industries as wooden box factories (S.I.C. 256) and the coffin and casket industry (S.I.C. 258) tend to be highly l o -cally market oriented because they are volume-adding operations and,,in the case of coffins, customized as well. The wooden box industry appears to be largely involved i n producing containers for shipping f r u i t . The two largest industries within the furniture and fixture group seem also to show some characteristics of l o c a l market orientation, although on a provincial scale more so i n the case of the miscellaneous furniture i n -dustries (S.I.C. 266) than the household furniture industry (S.I.C. 261). The miscellaneous furniture industries produce such things as special pur-pose furniture and fixtures of wood or metal, mainly for churches, schools, laboratories, hospitals, hotels, restaurants and stores, as well as springs and mattresses, and such items as picture and mirror frames and drapery hardware (Miscellaneous Furniture Industries, 1967, Table 8) . Furniture in general i s subject to moderately high distribution costs in relation to i t s value (Munro, op_. c i t . , 16U). Special purpose furniture would appear to be slightly more market oriented than average because of the importance of cus-tomizing. Mattresses, being bulky products, would be quite sensitive to transportation over long distances. The household furniture industry seems to be one i n which a certain provincial market threshold i s important be-fore production becomes significant. In Canada, B r i t i s h Columbia and Man-itoba are major suppliers within their own markets, with Ontario and Quebec 91 manufacturers clearly dominating the rest of the country. Although B.C., Manitoba, Ontario and Quebec s e l l most of what they produce within their provincial boundaries, B.C. shipments to destinations outside the province are much less i n percentage terms than those of the other three provinces. This may be p a r t i a l l y due to the unusually small size of B.C. plants (Table VIII) which may make them less competitive in selling their products in the rest of Canada than they would otherwise be. Printing and publishing industries are on the whole very l o c a l l y mar-ket oriented, although once again there are intra-industry group variations. The publishing and printing industry (S.I.C. 289), dominated by newspaper production, is a very market oriented industry because i t s product i s highly perishable and usually of interest only to readers who live within a rela-tively short distance of the point of production. Commercial printing (S.I.C. 286), on the other hand, i s market oriented because i t i s concerned largely with doing work on a custom basis. Nevertheless some of i t s prod-ucts are non-customized (e.g. greeting cards, playing cards, bank notes), and as a result interprovincial trade is quite significant, and production is concentrated in Ontario and Quebec (to a degree even greater than would be expected, given that business firms demanding printing services are con-centrated in those two provinces). As a result B.C.'s location quotient in this industry i s considerably less than 1.0. The publishing only industry (S.I.C. 288) i s concerned largely with the production of books and period-i c a l s . Concentration i s i n the two major ci t i e s of the country, Montreal and Toronto, with Ontario and Quebec dominating sales in every province (in-cluding B.C.). Platemaking, typesetting and trade bindery plants (S.I.C. 28?) provide specialized services to firms in the other printing and pub-lishing industries. Local market orientation i s the case (B.C.'s purchases TABLE V I I I AVERAGE VALUE OF SHIPMENTS PER ESTABLISHMENT IN THE HOUSEHOLD FURNITURE INDUSTRY, BRITISH COLUMBIA, MANITOBA, ONTARIO AND QUEBEC, 1967 Province Number of Establishments Value of Shipments Average Value of Shipments/Establishment B r i t i s h Columbia Manitoba Ontario Quebec ($•000) 215 89 696 5U6 20,793 15,588 163,035 127,182 97 175 23U 233 Source: Household F u r n i t u r e I n d u s t r y (1967, Table l ) 93 from, or sales to, other provinces account for considerably less than 1 0 * of provincial production.)* The location quotient (0.51) for the province i s low because the printing and publishing industry i n general i s under-represented. Several primary metal and metal fabricating industries are character-ized by relative dispersion of production. Three industries, iron foundries (S.I.C. 2 9 U ) , the fabricated structural metal industry (S.I.C. 3 0 2 ) and machine shops (S.I.C. 3 0 8 ) , particularly the la t t e r , are service i n nature in that much of their work is customized (Cohn, op_. c i t . , 1 5 0 ; Munro, op. c i t . , l l | 0 , 1 1 + 5 ) . The same is true for ornamental metal products, but for the "architectural" portion of the ornamental and architectural metal indus-try (S.I.C. 3 0 3 ) , which is concerned largely with the production of aluminum doors and windows, "the products are non-customized, the scale factor i s of significant importance, and the costs of transporting the finished products relative to the value of the products are modest" (Munro, op_. c i t . , l i + 6 ) . Presumably because of these factors, for the industry as a whole, Ontario firms supply 1 * 0 * of the market in each of the Prairie Provinces. In B.C., however, more than three-quarters of provincial demand supplied by Canadian factories i s met by provincial production. The localized nature of the B.C. industry has been explained i n terms of climatic conditions which have re-sulted in differences i n the B.C. product from that manufactured elsewhere i n Canada (ibid., l l + 6 n , l l + 7 n ) . Within the non-metallic mineral products industry group, the most im-portant industries in B.C. which have location quotients between 0 . 5 and 2 . 0 are cement manufacturers (S.I.C. 31+1), gypsum products manufacturers (mostly gypsum wallboard) (S.I.C. 3 l i 5 ) , and ready-mix concrete manufacturers (S.I.C. 3 U 8 ) . Ready-mix concrete manufacturers are particularly localized 9k because of the nature of their product. A l l three industries produce com-modities which are of relatively low value relative to their weight or bulk, and moreover the raw materials used are widely scattered. Petroleum refining (S.I.C. 3651), in terms of i t s current distribution pattern among the provinces of Canada, i s very l o c a l l y market oriented, l i t t l e refined petroleum being transported interprovincially. This i s true despite the facts that large economies of scale are typical of the industry ( a l l refineries i n B r i t i s h Columbia are well below optimum scale—Munro, op. c i t . , 157), and crude o i l is no longer cheaper to transport long dis-tances than i s refined o i l where large volumes (over 100,000 barrels per day) are being shipped. This localization of petroleum refining i s presum-ably due to factors of inertia and government regulations of the industry. In terms of value of shipments, petroleum refining i s by far the largest i n B.C. which i s oriented to the local market. Of this group of industries, however, the petroleum industry would appear to have one of the most un-certain futures i n terms of occupying the position i n the provincial econ-omy which i t presently holds. Munro (ibid., 156) discusses some of the characteristics which make the paint and varnish industry (S.I.C. 375) market oriented, such as the ubiq-uity of the material inputs and the limited economies of scale. In exam-ining the provincial production and distribution patterns, i t would seem that the industry occupies an intermediate position (somewhat like the household furniture industry) between those industries which are very l o -calized and in which l i t t l e interprovincial trade i s carried on (e.g. soft drink bottling) and those industries which, because of the importance of scale economies, minimize distribution costs by concentrating i n central Canada where market potential i s highest (e.g. manufacturers of household 95 radio and television receivers). In the Canadian paint and varnish indus-try i n 1967 five-sixths of the value of shipments was accounted for by On-tario and Quebec. B.C., however, produced most of the balance, and as a result i t had a location quotient in the industry of 1.26, and i t was a significant supplier in the Prairie Provinces. Some industries which are cl a s s i f i e d to the miscellaneous group are of the localized variety. Ophthalmic goods manufacturers (S.I.C. 38lU), dental laboratories (S.I.C. 3815) and the signs and displays industry (S.I.C. 397) a l l produce customized products. F i n a l l y a r t i f i c i a l ice manufacturers (S.I.C. 3998), perhaps the classic example of an extremely localized activ-ity,,ruse a ubiquitous raw material to make a perishable product. Industries which tend to be supply oriented. Among the remaining B.C. industries which had location quotients between 0.5 and 2.0 i n 1967, a few have tr a i t s which make them supply oriented. In the case of the f i r s t i n -dustry i n this group, slaughtering and meat processors (S.I.C. 101), the process i s clearly a weight-reducing one (Munro, ojo. c i t . , 123-12U). B.C. which has a livestock d e f i c i t thus has a low location quotient i n the i n -dustry (O.63). B.C. plants supply about half the provincial demand met by a l l Canadian meat processors. Most of the rest of the market i s met by Alberta plants. The relatively small meat processing industry that i s present in B.C. tends to be more the result of market than material factors, however. From 196U to 1966 i t i s estimated that hZ% of the finished cattle and calves, 83$ of the finished hogs and k3% of the sheep and lambs slaughtered in i n -spected abattoirs i n B.C. were imported (from the Prairies or the U.S.) (ibid., 12U). The second material oriented industry, f r u i t and-vegetable canners and preservers (S.I.C. 112) i s overrepresented i n the province because of the 96 relative importance of f r u i t and vegetable growing. Material orientation of canning and preserving is mainly a result of the perishability of the raw materials. There i s considerable cross-trading i n canned and frozen fr u i t s and vegetables. While the B.C. industry i s nationally oriented, large quantities of canned and frozen fr u i t s and vegetables consumed in B.C. are bought from other Canadian plants (not to mention the important part of the market which i s met by foreign producers). The third material oriented industry i s a special case. The bulk (in excess of two-thirds, in terms of value of shipments) of the province's i n -dustrial chemical industry (S.I.C. 378) is accounted for by two plants (one in Trail^and one i n Kimberley) owned by Cominco. These establishments pro-duce chemicals such as ammonia, sulphuric acid, chlorine and caustic soda, and such chemical f e r t i l i z e r s as ammonium sulphate, ammonium phosphate and ammonium nitrate as by-products of the smelting and refining of lead and zinc and the roasting of iron concentrates. Most of the production of these plants i s sold i n the Prairie Provinces or on international markets. This portion of the industrial chemical industry is similar to the five major primary processing industries of the province i n terms of the nature of markets. The other establishments of the industry produce mainly inputs for the province's pulp and paper industry. This portion of the industrial chemical industry w i l l be referred to later. The three industries making up the paper box and bag industry a l l have location quotients of approximately 1.0. Although these industries purchase inputs from the province's primary pulp and paper industry, they are by no means examples of obvious material orientation i n terms of locational char-acteristics. Manufacturers of corrugated boxes (S.I.C. 2732) produce a bulky product which does not enter into interprovincial trade to any great 97 extent. Although B.C. plants do ship between 20 and 2$% of their output to the Prairie Provinces, these three provinces supply at least three-quar-ters of their own demand. That B.C. has been able to penetrate the Prairie market may be due to lower costs of raw materials and larger and more op-timally sized plants. (In 1967 the average value of shipments of B.C. plants was roughly $5,000,000, whereas Prairie plants averaged about $2,500,000.) Manufacturers of folding cartons and set-up boxes (S.I.C. 2731) make items which are less sensitive to costs of transportation than the products of the previous industry. Nevertheless market orientation i s typical of this industry, probably because of the wide variety of containers made to the specifications of particular l o c a l buyers. The most material oriented industry i n the group appears to be paper and plastic bag manu-facturers (S.I.C. 2733)• the distribution of production by provinces re-sembles that of the primary pulp and paper industry somewhat more closely than that of the other two industries. B.C. producers supply most of the provincial market and one-third the Alberta demand. However, Prairie pro-duction i s by no means insignificant. In short a l l three of these paper converting industries produce relatively inexpensive products, relatively sensitive to transportation costs, and therefore more correctly regarded as market than material oriented. Another industry which uses as a raw material the product of one of the province's primary processing industries (and which therefore might be thought to be located i n the province because of material orientation) i s aluminum r o l l i n g , casting and extruding (S.I.C. 296). The largest estab-lishment i n this industry i s owned by Alcan and transforms aluminum ingots from Kitimat into such products as extrusions for the manufacture of alumi-num windows, doors and signs. The plant i s also a major producer of elec-98 t r i c a l conductor cable. Serving markets in western Canada, the plant's l o -cation i n Vancouver would appear to be a balance between assembly and dis-tribution costs. B.C. firms i n this industry would not appear to suffer any disadvantage relative to those i n Ontario and Quebec in terms of scale economies. Other industries with location quotients between 0 . 5 and 2 . 0 . The dis-tribution of the copper and alloy r o l l i n g , casting and extruding industry (S.I.C. 297 ) among the provinces is similar to that of the aluminum products industry just discussed. Production i s limited to the two central provinces and B r i t i s h Columbia. The B.C. industry which i s dominated by one establish-ment producing copper pipe and tubing i s an important supplier for the west-ern Canadian market. A relatively large proportion of production is ex-ported, particularly to the United States. The presence of three large industries i n the food and beverage cate-gory has not yet been accounted for. These are sugar refineries (S.I.C. 1 3 3 ) , miscellaneous food manufacturers (S.I.C. 1392 ) and d i s t i l l e r i e s (S.I.C. ll+ 3 ) . The sugar refining industry i n B r i t i s h Columbia consists of one establishment, situated on Vancouver harbour, which refines raw cane sugar. Protected by distance from competition from eastern Canadian re-fineries, the Vancouver sugar refinery would appear to il l u s t r a t e well the type of industry which, as described by Hoover (op_. c i t . , 2210 tends to l o -cate at major transshipment points which usually also provide important l o -cal markets for the product. The B.C. refinery as well as serving the needs of B.C., supplies Alberta with roughly one-third of i t s sugar demand and Manitoba and Saskatchewan with about one-sixth of their requirements. Major products of the miscellaneous food manufacturers are coffee, tea, jams, j e l l i e s , peanut butter, food extracts, puddings and pie f i l l i n g s 99 (Munro, op_. c i t . , 136). As with the sugar refineries, the relative impor-tance of this activity i n the province would appear to be a result of an intermediate location between materials (some, such as berries and, quite importantly, sugar, are grown or manufactured locally, while other materials such as coffee, tea and peanuts are imported) and markets which are, as with sugar, i n western Canada. The d i s t i l l i n g industry is an interesting case in that i t is more de-pendent on foreign markets than any other industry in the province except the primary processing sectors. According to Munro (op_. c i t . , 139) an im-portant reason for the establishment of the two d i s t i l l e r i e s which account for more than 9$% of total B.C. shipments was "the opportunity to exploit the market for Canadian whisky in the western United States". B.C. d i s t i l -leries are smaller than their counterparts i n Ontario, but the reduced economies of scale are apparently more than compensated for by lower d i s t r i -bution costs which are significant because d i s t i l l i n g operations are weight-adding, and the product i s fr a g i l e . Nevertheless, d i s t i l l i n g , because of the relatively high value of i t s product, i s a distinctly less, locally mar-ket oriented activity than other beverage industries such as soft drink bottling and brewing (Estall and Buchanan, 1966, 1U3). As a result consid-erable cross-trading i s possible i n the industry. Thus, for example, while B.C. exports to other provinces and to the U.S. almost three-quarters of i t s production, the province's consumption of Canadian s p i r i t s i s supplied largely by Ontario and Quebec. Hardware, tool and cutlery manufacturers (S.I.C. 306) are very highly concentrated i n Ontario and Quebec (about 91$ of Canadian production i n terms of value of shipments). The only other significant activity in the industry i s i n B r i t i s h Columbia. Two firms producing locks dominate produc-1 0 0 tion (although several other firms exist, as well) and s e l l their products across Canada. Both lock companies are subsidiaries of California firms, and Munro (op_. c i t . , I l f 7 ) regards their location i n Br i t i s h Columbia as "an historical accident": "At the time when the firms were established (circa 1 9 5 5 ) , the parent firms f e l t that i t was desirable to have the subsidiaries closer to California than Ontario/Quebec, which otherwise presumably would have been the optimum location.". Truck body and t r a i l e r manufacturers (S.I.C. 32U) produce mobile homes in addition to truck bodies and recreational and commercial t r a i l e r s . The annual publication Truck Body and Trailer Manufacturers ( 1 9 6 7 , Tables 8 , 9 ) l i s t s the value of the principal products for the entire Canadian industry. No figures, however, are given regarding shipments of specific products by province. By using the British Columbia Manufacturers' Directory (op_. c i t . ) , supplemented by the B r i t i s h Columbia Trade Directory (op. c i t . ) , both of which for manufacturing establishments i n the province l i s t the principal products and the employment within a certain range (e.g. under 15 employees, 15-21 ; employees, etc.), i t was possible to estimate that roughly two-thirds of the B.C. truck body and t r a i l e r manufacturing industry was engaged in the production of commercial truck bodies and t r a i l e r s and the remaining one-third i n products such as recreational tr a i l e r s and campers, and mobile homes. This estimation would appear to agree with Munro (op_. c i t . , 95 ) who claims that the truck body and t r a i l e r industry "consists to a large degree of firms that are satellites of the 0*«C.) truck assemblers". Nevertheless more than U 0 * of the production of the industry is shipped out of the prov-ince. Manufacturers of electric wire and cable (S.I.C. 338) appear to f i t into the group of industries whose products are demanded i n approximate 101 p r o p o r t i o n t o p o p u l a t i o n across the country, but which are h i g h l y concen-t r a t e d i n terras of production i n Ontario and Quebec. B.C. p l a n t s , smaller than the n a t i o n a l average, must compete w i t h eastern establishments w i t h i n the p r o v i n c i a l market. The remaining manufacturing i n d u s t r i e s whose l o c a t i o n q u o t i e n t s range between 0.5 and 2 . 0 are s i m i l a r t o one another i n t h a t they are important s u p p l i e r s of inputs t o the province's major resource a c t i v i t i e s ( f o r e s t r y , mining, f i s h i n g , f r u i t growing) and the corresponding resource o r i e n t e d manufacturing a c t i v i t i e s (saw, shingle,veneer, plywood, pulp and paper m i l l s , s melters, f i s h p r o c e s s i n g p l a n t s , and f r u i t and vegetable canners and p r e -s e r v e r s ) . Two r e l a t i v e l y minor i n d u s t r i e s which f i t i n t o t h i s category are l e a t h -er glove f a c t o r i e s (S.I.C. 175), and the cordage and twine i n d u s t r y (S.I.C. 213). I n the case of the f i r s t a c t i v i t y , one f i r m dominates production i n the province and manufactures work gloves. As f o r the second a c t i v i t y , the f i s h i n g i n d u s t r y i s an important consumer of nylon and dacron rope and twine. Metal stamping, p r e s s i n g and c o a t i n g (S.I.C. 30U) i s an a c t i v i t y which shows a r e l a t i v e l y h i g h degree of market o r i e n t a t i o n ( f o r example each of the f o u r western provinces i s a major s u p p l i e r w i t h i n i t s own boundaries). Sheet metal works are, l i k e other metal working i n d u s t r i e s such as i r o n f o u n d r i e s , s t r u c t u r a l metal works and machine shops, u s u a l l y l o c a t e d c l o s e t o t h e i r purchasers because products tend t o be customized. One p a r t of the i n d u s t r y i n B r i t i s h Columbia, however, i s not concerned w i t h manufac-t u r i n g a customized product. This i s the manufacture of t i n cans, c h i e f l y used by the f i s h , and f r u i t and vegetable p r o c e s s i n g i n d u s t r i e s . Two f i r m s producing cans account f o r perhaps one-quarter of employment i n the metal stamping, p r e s s i n g and c o a t i n g i n d u s t r y . The manufacturing of cans, being 102 a volume-adding operation, i s highly l o c a l l y market oriented despite the fact that economies of scale may be significant (Munro, op_. c i t . , lU5). Wire and wire products manufacturers (S.I.C. 305) in Bri t i s h Columbia produce many goods which are not chiefly consumed by the major primary i n -dustries such as bolts, nuts, rivets, nails, staples, screws, cages, wire fencing and screens. Nevertheless by referring to the Bri t i s h Columbia  Manufacturers' Directory (op. c i t . ) i t would appear that the major product of the industry in the province i s wire rope, largely for use by the logging and mining industries. In addition two small establishments produce brass wire cloth for pulp and paper mills, and one firm makes shingle bands. The largest industry of those presently under consideration is miscel-laneous machinery and equipment manufacturers (S.I.C. 315), a category which is defined as comprising "establishments primarily engaged in manufactur-ing ... special industry machinery except agricultural machinery [and] es-tablishments primarily engaged in manufacturing machinery and equipment not designed for use i n any particular industry" (Miscellaneous Machinery and  Equipment Manufacturers, 1967, 1) . In 1967 Ontario accounted for roughly 70* of the value of shipments of goods of own manufacture in this industry, and Quebec produced an additional 20*. While the B.C. industry only ac-counted for 6* of the national total, i t nevertheless far outranked any of the seven other provinces, and perhaps more significantly accounted for 12* of Canadian shipments to foreign countries. While i t has not been possible to obtain the value of specific types of machinery produced, i t is quite clear in examining the l i s t s of commodities produced by the firms classified to the industry i n B.C. that activity i s dominated by production of machin-ery for the province's primary industries, particularly for the forest-based industries, and to a smaller extent, for the mining and fishing industries. 103 (Some other types of machinery are, however, produced on a small scale in the province, for example, airline ground support equipment, printing ma-chinery, packaging machinery, fire-fighting equipment, and building con-tractors 1 equipment. Some of these items are the major products of the firms making them. Others are, however, produced by firms which are also engaged in manufacturing machinery and equipment for the primary industries;) Types of equipment produced for the forest industries include such things as spar-yarder units for logging, saws, barkers, edgers and dry kilns for sawmills, veneer lathes for plywood mills, and chippers and rotary chip screens for pulp mills. D r i l l i n g equipment i s produced for the mining i n -dustry, and winches and hydraulic gear drives for the fishing industry. Both Cohn (op_. c i t . , 86), in speaking of the forest-based machinery indus-try of the U.S. Pacific Northwest, which appears to be similar in nature to that of B.C., and Munro (o£. c i t . , 11*1-11*2) state that machinery production i s a customized activity, although Munro adds that "a small proportion jjof machinery manufacture} is accounted for by the production of equipment that is customized only i n the sense that i t is designed for primary industries on the west coast of the continent". Nevertheless, as shown by Table VI, the B.C. industry has been successful i n marketing quite a significant part of i t s output in the rest of Canada and in foreign countries. (According to the Preliminary Statement of External Trade (196?, Table 7), which l i s t s value of commodities shipped through B r i t i s h Columbia customs ports, without giving the province of origin, the major types of machinery shipped to for-eign destinations in 1967 were cranes, winches, hoists and parts, saws and sawmill machinery and parts, and rock d r i l l i n g machinery and parts. The U.S. was the destination of over 90% of cranes, winches and hoists, over $0% of saws and sawmill machinery, but less than 30$ of rock d r i l l i n g equip-I O U ment.) Three industries i n the chemicals group have strong linkages with the primary industries of the province. Explosives and ammunition manufacturers (S.I.C. 371) serve the mining industry. The province's pulp mills and ply-wood mills are respectively the major users of industrial chemicals (other than those produced by Cominco), specifically chlorine, caustic soda and sodium chlorate, and synthetic resins for plywood glue, which is the major product of the manufacturers of plastics and synthetic resins (S.I.C. 373) i n the province. Besides the eight industries just discussed there are others which are primarily or p a r t i a l l y engaged in supplying inputs to the province's re-source industries. (For the most part the industries to be mentioned in this paragraph have location quotients of less than 0.5.) The wooden box factories, the miscellaneous metal fabricating industry, the agricultural implement industry, the motor vehicle manufacturers and the shipbuilding and repair industry have already been discussed. The province's few shoe factories (S.I.C. 17h) are largely engaged i n making boots for use by log-gers and miners, and manufacturers of e l e c t r i c a l industrial equipment (S.I.C. 336) are suppliers to the forestry and mining industries of such products as e l e c t r i c a l control systems, c i r c u i t breakers and switchgear. Finally some metal using industries, while not mainly concerned with supplying inputs to the primary industries are composed of some establish-ments which do have important linkages to these industries. Thus three medium-sized firms classified to the iron and steel industry produce cas-tings for mining and forestry related a c t i v i t i e s . Several firms i n the hard-ware, tool and cutlery category manufacture saws and other lumbering and log-ging tools. Many machine shops produce logging and m i l l machinery parts. 105 Classification of Industries Based on the theoretical framework presented i n Chapter II, which rec-ognized the presence of different types of manufacturing in a region, i t is now possible using the quantitative or qualitative characteristics of spe-c i f i c industries i n B.C., discussed in this chapter, to formalize the i n -dustry classification and to determine the class to which a particular i n -dustry belongs. The theoretical framework in discussing the evolution of a region suggested that as the region passes through successive "stages" of development, additional types of manufacturing become established. In this sense the framework i s somewhat analogous to central place theory, which as-sumes different orders of r e t a i l establishments determined by the size of the market area necessary to make them profitable, and different orders of urban centres determined by the range of activities present. A certain centre w i l l be of a higher order than another i f i t possesses a l l the same types of establishments as the other as well as additional higher-order services (see discussion of Christaller's urban hierarchies i n Berry, 1967, 63-68). Primary Processing Industries According to the framework the region at stage 1 would have only one type of manufacturing present—the processing of raw materials. This type of manufacturing can therefore be considered to be of the lowest order. For purposes of the formal classification of B.C. industries, primary pro-cessing consists of those manufacturing act i v i t i e s which are present i n the province mainly because the resources themselves are present. These are the industries i n which minimization of assembly costs is the c r i t i c a l factor in location. The l i s t of industries classified to this group appears i n 106 Table IX. The smelting and refining industry i s included i n this group even though the Alcan aluminum reduction plant, classified to this industry, uses an imported raw material. This is because large quantities of relatively cheap hydro-electric power, a c r i t i c a l input, i s the factor that attracted the plant to B.C. Also included i n the primary processing group of indus-tries are the miscellaneous wood industries. The input of these industries i s largely a p a r t i a l l y processed material ( i . e . lumber), unlike the inputs of the other industries of the group which are unprocessed. This industry was, however, the only one which could clearly be described as a forwardly linked s a t e l l i t e industry (Hirschman, op_. c i t . , 102) and whose presence i n the province seemed to be the result primarily of access to p a r t i a l l y pro-cessed materials. As such i t was considered most feasible to leave the i n -dustry i n the primary processing category. Localized Industries The second stage of the region's development was differentiated from the f i r s t stage by the appearance of manufacturing sectors supplying mainly the local market. These localized industries produce goods which are not important items i n interregional trade. The reasons for certain industries having this particular characteristic have been discussed e a r l i e r i n the chapter. In brief these industries produce goods which relative to the raw materials used are d i f f i c u l t to transport because of weight, volume or per-ishability, or goods which are customized and generally must be produced near the f i n a l buyer. A l i s t of the industries which can be considered as localized i n the context of B.C. appears in Table IX. The localized indus-tr i e s are further subdivided into those which s e l l mainly to households and those which s e l l largely to business customers. This particular information w i l l not be used, however, u n t i l the next chapter. 107 TABLE IX CLASSIFICATION OF BRITISH COLUMBIA MANUFACTURING INDUSTRIES INTO FOUR GROUPS BASED ON THE THEORETICAL FRAMEWORK Industry S.I.C. Industry S.I.C. In d u s t r y S.I.C. S.I.C. Group Code Group Code Group Code Code Primary (B) 301* Import (3) 318 Processing (B) 308 S u b s t i t u t i n g y (B) 321 I n d u s t r i e s (H) 328 I n d u s t r i e s (B) 321* 111 (B) 31*1 (H) 101 (B) 325 112 (B) 31*5 (B) 121* (H) 329 1U7 (B) 31*7 (H) 125 (3) 331 2511 (B) 31*8 (H) 128 (H) 331* 2513 (B) 3511 (H) 131 (3) 335 252 (H) 353 (H) 1391 (B) 337 259 (B) 359 (H) 1392 (3) 338 271 (B) 3651 (H) ll*3 (B) 339 295 (B) 369 (B) 169 (B) 3512 378 (B) 372 (B) 172 (B) 352 (B) 375 (H) 179 (B) 351* L o c a l i z e d (B) 3791 (B) 197 (B) 355 3561 I n d u s t r i e s (H) 38ll* (B) 211 (B) (H) 103 (H) 3815 (B) 215 (B) 3562 (H) 105 (H) 38U (H) 216 (B) 3652 (B) 123 (B) 397 (B) 218 (H) 31k (H) 129 (H) 3983 (H) 2292 (H) 376 (3) 133 (B) 3995 (H) 2299 (H) 377 (H) 1U1 (H) 3997 (H) 239 (B) 3799 (H) 11*5 (3) 3998 (H) 21*3 (B) 3811 (H) 221 (H) 2UU (H) 3813 (B) 223 Backwardly (H) 21*5 (H) 382 (B) 251*1 Linked (H) 2U6 (H) 383 (H) 258 I n d u s t r i e s (H) 2i*7 (B) 385 (H) 261 171* (3) 26U (H) 3931 (H) (B) 266 175 (H) 268 (H) 3932 272 213 (H) 271; (3) 395 (B) 2731 256 '(H) 288 (H) 3982 (B) 2732 305 (3) 291 (B) 3985 (B) 2733 311 (B) 292 (H) 3986 (B) 286 315 (B) 296 (B) 3938 (B) 287 323 (B) 297 (H) 3989 (H) 289 327 (3) 301 (H) 3996 (B) 29k 336 (B) 306 (H) 3999 (B) 298 371 (B) 307 (3) 302 373 (3) 309 (B) 303 (3) 316 ( 3 ) , (H) l o c a l i z e d or import s u b s t i t u t i n g i n d u s t r i e s producing goods mainly f o r business (B) or household (H) use 108 Localized industries have been defined on the basis of their trade patterns using data drawn or estimated from Destination of Shipments of Manufacturers (op. c i t . ) . For a l l industries in the province except those which process raw materials or which provide inputs to the primary or re-source processing activities (this latter group of industries, which is characteristic of stage 3, w i l l be discussed below), B.C. shipments which were destined for markets within the province were divided by, on the one hand, total B.C. production and, on the other hand, total B.C. consumption met by a l l Canadian manufacturers. For each industry these two ratios were compared with the corresponding figures for the all-industry totals. If, for an industry, both ratios exceeded the all-industry ratios, the industry was considered to be relatively localized. If only one ratio exceeded the corresponding all-industry ratio, or i f both ratios were less, the industry was classified as relatively non-localized. Two examples are used to ill u s t r a t e the procedure. In 1967 the value of shipments of a l l B.C. industries destined for provincial markets was $1,512,9U8,000. Total shipments were valued at $3,130,280,000. Thus U8.33$ of the shipments of B.C. manufacturing industries, by value, were for local ( i . e . provincial) markets. At the same time B.C.'s consumption of Canadian manufactured goods in 1967 was $2,750,958,000. B.C. establishments there-fore accounted for 55.00$ of a l l Canadian shipments consumed in the province. For slaughtering and meat processors, local shipments of B.C. producers amounted to $78,537,000, total production was $89,908,000 and total con-sumption, $151,186,000. Thus 87.35$ of B.C. production was consumed in the province. B.C. producers, however, met only 51.95$ of provincial consump-tion. Since a smaller proportion of local consumption was met by local pro-duction than i s true for the all-industry total the industry i s classified 109 as non-localized. For poultry processors, local shipments of B.C. products were $20,257,000, total production was $23,118,000 and total consumption, $21,1*08,000. B.C. establishments therefore shipped 87.62* of production to the local market and i n doing so met 9U.62* of local consumption. Since both percentages are greater than the corresponding all-industry figures, the poultry processing industry i s classified as localized. Table X presents data on the percentage of provincial production sold within the province, and the percentage of provincial consumption which i s met by local manufacturers for a l l industries other than those that are re-source processing or engaged i n producing inputs for the primary industries. Backwardly Linked Industries As was stated i n Chapter II, i n stage 3 the region develops a range of industries linked to the primary processing a c t i v i t i e s . As has already been mentioned only one industry seems to be a clear example of a forward linkage. The group of linked industries i s therefore defined i n terms of being backward linkages ( i . e . input suppliers) of the resource exploitative and primary processing activities of the province. Included also are those industries such as miscellaneous machinery and motor vehicles which, while exporting more than half their production outside of the province, neverthe-less give the impression of diversification of markets and products from an i n i t i a l position of purely sa t e l l i t e status. The linked industries are li s t e d i n Table IX. Import Substituting Industries In stage U, for reasons outlined i n Chapter II, a large number of mar-ket oriented industries appear i n the region. While some of the expansion of these market oriented industries w i l l be i n the localized and backwardly 110 TABLE X VALUE OF SHIPMENTS OF BRITISH COLUMBIA MANUFACTURERS DESTINED FOR BRITISH COLUMBIA, BY THREE- AND FOUR-DIGIT INDUSTRIES^, 196? (expressed i n column (1) as a percentage of the t o t a l value of shipments of B r i t i s h Columbia manufacturers, and i n column (2) as a percentage of the t o t a l value of shipments of a l l Canadian manufacturers destined f o r B r i t i s h Columbia) S.I.C. (1) (2) S.I.C. (1) (2) S.I.C. (1) (2) Code % % Code % % Code % % T o t a l 1*8.33 55.00 21*5 100.00 (0.65) 308 90.89 91*. 86 21*6 100.00 (10.13) 309 88.22 36.70 101 87.35 51.95 21*7 100.00 (5.89) 103 87.62 91*. 62 316 100.00 (25.98) 105 97.03 90.92 251* 61.79 86.78 318 (8U.86) (3.87) 123 96.39 87.73 251*1 61.79 87.91 121* 100.00 (1.63) 256 100.00 96.80 321 100.00 16.71 125 (96.67) (5.10) 258 100.00 89.96 321* 59.38 1*2.07 128 63.92 16.19 325 (95.18) (3.72) 129 95.h9 96.08 261 90.79 59.83 328 93.81 83.09 131 (86.13) (11.92) 261* (91.76) (11.11*) 329 100.00 (2.91*) 133 (72.60) (98.1*6) 266 92.51 7U.81* 139 58.99 (52.21) 268 100.00 (3U.29) 331 (5U.86) (6.1*0) 1391 (89.66) (32.18) 331* (99.10) (1.1*0) 1392 (58.75) (52.60) 272 (9U.88) (59.61*) 335 (29.00) (23.1*2) 11*1 (99.1*6) (83.30) 273 (80.13) (89.78) 337 100.00 32.90 1U3 (26.36) (36.71*) 2731 (92.19) (89.96) 338 (68.62) (32.36) 11*5 99.02 99.60 2732 (76.1*0) (96.31) 339 100.00 (16.05) 2733 71*. 1*1 81.86 169 100.00 (10.31) 271* 87.81 27.35 31*1 (95.32) (8U.02) 31*5 100.00 (98.73) 172 (58.66) (33.39) 286 88.88 68.68 31*7 99.33 89.80 179 100.00 (30.67) 287 98.12 91.98 31*8 (99.81*) (97.56) 288 95.15 38.87 351 (55.91*) (5U.56) 197 (32.78) ( l l * . l * l * ) 289 99.91* 79.11* 3511 (72.28) (82.25) 211 (89.05) (1*!*.85) 3512 (38.1*5) (32.53) 215 100.00 (1*2.65) 291 80.1*9 39.78 352 100.00 (35.18) 216 100.00 (5.05) 292 (90.89) (37.28) 353 (95.83) (95.01*) 218 100.00 (10.82) 291* 92.91 58.81* 351* (83.03) (19.90) 221 100.00 81.09 296 (55.78) (1*9.1*5) 355 (93.78) (1U.59) 223 (51.99) (82.1*6) 297 (36.1*3) (1*1*.1*9) 356 (90.1*2) (28.98) 229 96.03 25.85 298 93.31* 81.99 3561 (99.92) (35.11) 2292 (89.39) (36.53) 3562 (61.37) (15.51) 2299 (96.31*) (26.07) 301 95.58 18.68 359 (95.58) (71.36) 302 79.58 83.66 239 (21.39) (7.1*8) 303 95.21 75.90 365 (98.1*1*) (90.21*) 301* 93.33 60.98 3651 98.1*1* 90.56 21*3 72.78 22.88 306 32.63 26.81* 3652 100.00 (7.32) 21*1* 1*6.1*6 12.87 307 81*.27 32.71* 369 (69.91) (97.1*3) TABLE X (continued) 111 S.I.C. (1) (2) S.I.C. ( 1 ) (2) S.I.C. (1) (2) Code % % Code % % Code % % 372 (95.10) (93.50) 381U 100.00 ( 7 1 . 1 6 ) 3982 100.00 ( 1 6 . 2 6 ) 37k 375 (78.09) (2.55) 3815 100.00 98.11 3983 100.00 ( 6 2.81) 63.33 75.88 382 ( 8 U . W 0 ( 2 3.29) 3985 100.00 33.86 376 (88.71) (11.77) 383 100.00 2 1 * .28 3986 100.00 (3.88) 377 100.00 ( 0 . 3 0 ) 38U (99.67) 100.00 3988 ( 1 * 5 . 1 9 ) ( 3 3 . 2 6 ) 379 6 0.19 28.77 385 3 9 . 0 3 2 6 . 8 9 3989 100.00 ( 9 . 0 6 ) 3791 8 3 . 1 9 6o.kk 393 68.83 10. OU 399 (96.k9) (50.97) 3799 55.73 21* .98 3931 (67.68) (13.69) 3995 (97.95) ( 9 0.17) 3 9 3 2 100.00 ( 1 . 0 6 ) 3996 100.00 3 2 . 8 6 381 99.76 2 6 . 9 2 395 100.00 (26.010 3997 (96.15) ( 8 U . 1 8 ) 3811 100.00 ( 1 . 6 1 ) 397 83.12 9 2 . 7 9 3998 100.00 100.00 3813 9U.37 37.85 398 (72.OU) ( 1 3 . 610 3999 (83.33) ( 1 1.17) Source: Adapted from D e s t i n a t i o n of Shipments of Manufacturers (1967, Tables 1, 2) Note: F i g u r e s i n parentheses are e s t i m a t e s . # Primary processing and backwardly l i n k e d i n d u s t r i e s are not reported i n d i v i d u a l l y i n the above t a b l e . They are, however, in c l u d e d i n the t o t a l of a l l i n d u s t r i e s . 112 linked groups of industries already present, stage h is distinguished from the preceding stages by the presence of a group of industries with charac-t e r i s t i c s not yet described i n formal terms. These are import substituting industries which relative to the localized industries are c haracterized by such things as (1) the relative importance of economies of scale, which limits the number of establishments and therefore regions possessing the i n -dustry; (2) external economies, which may encourage many small plants to l o -cate i n close proximity to one another i n one or a few regions; or (3) the particular importance of labour as an input (either i n general terms or a labour force possessing specific s k i l l s ) , which would tend to concentrate plants in areas of low labour cost relative to labour productivity. As a result the types of industry i n the import substituting category tend to be much more concentrated i n the most highly developed regions, and as a corollary these industries tend to produce goods which are important items in interregional trade. For the purpose of the classification, import substituting industries i n B.C. are defined as those i n which the proportion of total B.C. consump-tion met by manufacturers within the province i s below average ( i . e . indus-tries i n which B.C. manufacturers face strong competition from "imports" originating i n other parts of Canada). In other words import substituting means import competing. The industry i n B.C. has not necessarily grown to replace the market previously held by external firms. The data that were used to assign industries to the import substituting category, the same that were used i n defining localized industries, are presented i n Table X. For example the biscuit industry (S.I.C. 128) i s an import substituting activ-i t y because B.C. establishments only account for 16.19$ of provincial con-sumption, whereas the average for a l l industries i s 55.00$. A l l industries 113 i n Table X which are not of the localized household or business type are found to f i t the above criterion and are therefore classified as import substituting. The industries assigned to the import;substituting group are lis t e d i n Table IX. Note i s also made of the household or business nature of the market of each of these industries. It should be stated here that, given the definitions used for localized and import substituting industries, i t would be possible for an individual industry to have f i t t e d into one of the two categories when i t f i r s t came into operation i n B.C. and into the other category i n 1967. Since data on interprovincial shipments are at present only available for 1967, this pos-s i b i l i t y cannot be comprehensively tested. It i s f e l t , however, that since the model i s being used as a classification device of point-in-time data that this i s not too serious a problem. The difference between localized and import substituting industries i s one of degree. It was therefore f e l t nec-essary to impose some kind of quantitatively determined boundary between the two, even i f this boundary is somewhat arbitrary. The theoretical framework recognized the existence of a stage 5, in which some of the formerly import substituting activities or linked indus-tries had grown to the point where they not only supplied the local market but had become the major part of the region's export sector i n manufactur-ing. An industry peculiar to this stage of development, which was the f i n a l one considered, would, using the data i n Table X have the following two characteristics: (1) less than U8.33$ of shipments would remain within B.C., i.e. the industry would be more export-oriented than average; and (2) more than 55.00$ of provincial consumption would be met by B.C. establishments, i.e. the industry would supply a greater than average share of the local market. No non resource processing activity i n the province has these 11U characteristics, and the province therefore has no a c t i v i t i e s which could be regarded as typical of this advanced state of manufacturing development. (While i t i s true that some non resource processing a c t i v i t i e s do export a higher than average proportion of their product, these are i n every case also industries i n which a less than average proportion of total B.C. con-sumption i s met by provincial plants. As such these industries are simply a special type of the import substituting activities or the backwardly linked industries.) If data had been available at a finer industry scale ( i f the data, for example, consistently were for four-digit industries) an industry might have been found to meet the c r i t e r i a of a stage ? industry.* In other words, for a particular activity within an import substituting i n -dustry, for example, B.C. establishments may supply most of the provincial demand while at the same time exporting a disproportionately large amount. Similarly the localized-import substituting distinction i s dependent on the fineness of the industry breakdown. This point w i l l be raised i n Chapter VI, where the data used are in some cases at a less disaggregated level than in this chapter. In summary four industry types are recognized i n B.C. Arranged in the order i n which the theoretical framework would suggest that they would ap-pear, these are (1) primary processing industries; (2) localized industries;: (3) suppliers of inputs to primary processing industries, i.e. backwardly linked industries; and (k) import substituting industries. Industry Structure Diagram of British Columbia With the industrial classification formalized i t is now possible to construct an industry structure diagram of B.C. i n 1967 (Figure 6) similar to those which were used to il l u s t r a t e the hypothetical region at various "stages" of manufacturing development in Chapter II. Industry groups have 115 Figure 6. The Industrial Structure of Br i t i s h Columbia in 1967 -Export Sector-Primary Processing ->•<—Local Sector-a DJD « .5 5 • ^  -p 3 +s I H W •3 CO Localized 20 U0 60 80 of Value of Shipments in Manufacturing Primary Processing 100 116, been assigned to the export or local sector or both depending on the char-acteristics of the component industries. Total industry shipments reported in the province i n 1967 were $3,130,280,000, of which 1*8.33* were destined for B.C. and 51.67* for export from the province. Of the 10 industries en-gaged in primary processing eight, accounting for shipments of $1,707,321,000 (5U.51** of the all-industry total), each exported more than 51.67* of i t s product and were a l l thus assigned to the export sector; the other two i n -dustries with combined shipments of $28,71*8,000 (0.92* of the all-industry total) each exported less than 51.67* of i t s product and were both allocated to the local sector. Of the 1*7 localized industries every one by definition exported less than 51.67* of i t s product, and thus the entire group is part of the local sector. Shipments of the localized industries were valued at $826,617,000, which was 26.1*1* of the value of shipments of a l l industries. Two backwardly linked industries, accounting for shipments of $86,1*00,000 (2 .76* of the shipments of a l l manufacturing industries), are export-ori-ented; the other 10 producing $88,882,000 worth of goods (2.81**) are l o c a l l y oriented. Fina l l y in the import substituting group nine industries with combined shipments of $92,936,000 (2 .97*) are export-oriented, and 65 i n -dustries shipping products valued at $299,376,000 (9.56*) are oriented to the local market. "Stage" of Br i t i s h Columbia's Manufacturing Development In the theoretical framework the "stages" were identified in qualita-tive terms, more specifically by the presence of types of industries. No quantitative measures were given such as the proportion of total manufac-turing shipments accounted for, for example, by backwardly linked industries before the region could be said to be i n stage 3. In the case of B.C. the provincial industrial structure diagram would appear to be that of the 117 hypothetical region i n stage k since import substituting a c t i v i t i e s are f a i r l y significant, accounting for about one-eighth of manufacturing ship-ments. On the other hand, the impression is that the province i s at a relatively early phase of this stage because of two factors: (1) processing of raw materials accounts for over half of productionj and (2) given that import substituting industries are defined as those non resource processing, non backwardly linked industries which account for a less than average share of total provincial consumption (under 55.00$), there i s s t i l l very great room for growth i n these particular industries. As an indication of this fact, total provincial consumption (met by a l l Canadian manufacturers) i n 1967 of the products of the 7k import substituting industries was $927,911,000, of which B.C. establishments accounted for $261,873,000 or 28.22$. Moreover the import substituting group of industries can grow by the establishment of entirely new industries as well as by the expansion of already existing ones. In 1967 shipments of goods valued at $11+2,009,000 from 25 industries entirely absent from B.C. were destined for the province. CHAPTER V REGIONAL DIFFERENCES IN MANUFACTURING STRUCTURE IN BRITISH COLUMBIA The preceding chapter was concerned mainly with describing and ex-plaining differences between the manufacturing structure of Br i t i s h Colum-bia and that of Canada. Virtually nothing was said pertaining to the dis-tribution pattern of individual industries within the province. In Chapter III labour force figures were used to i l l u s t r a t e the varying importance of manufacturing among the census divisions of the province. The purpose of this chapter i s to describe variations from one region to another in terms of the types of industries present. In other words, the geographical scale of the description and, necessarily, the interpretation of the patterns de-tected i n the data are changed. Distribution of Industries Among Regions Data Sources As has already been stated i n Chapter IV each annual manufacturing industry bulletin published by the DBS contains a l i s t of the names and addresses of a l l establishments classified to the particular industry (un-fortunately, though, this practice was discontinued after 1°67). These l i s t s were used for a preliminary comparison of industrial structure and complexity of B r i t i s h Columbia's 12 regions (the 10 census divisions and the two census metropolitan areas in the province discussed i n Chapter III). At this stage attention i s only being paid to the presence or absence of an industry i n a region. The size of the regional industry i s not considered for the moment. 119 G r a p h i c a l P r e s e n t a t i o n of the D i s t r i b u t i o n of I n d u s t r i e s Among Regions The s t r u c t u r e o f manufacturing i n each r e g i o n i s shown i n diagramatic form i n Graphs 2-13. Graph 1 i s the key t o a l l of these p i e graphs. The Standard I n d u s t r i a l C l a s s i f i c a t i o n used i n Canada d i s t i n g u i s h e s 20 s o - c a l l e d " t w o - d i g i t " manufacturing i n d u s t r y groups, which are i n t u r n broken down i n t o lUO " t h r e e - d i g i t " i n d u s t r i e s . Each of the p i e graphs i s d i v i d e d i n t o 20 " s e c t o r s " r e p r e s e n t i n g the S.I.C. i n d u s t r y groups. The s i z e of each sector i s p r o p o r t i o n a l t o the number of t h r e e - d i g i t i n d u s t r i e s composing the p a r t i c u l a r i n d u s t r y group. Thus, f o r example, the t r a n s p o r t a t i o n equip-ment i n d u s t r i e s s e c t o r i s twice as l a r g e as the paper and a l l i e d i n d u s t r i e s s e c t o r because the former i n d u s t r y group i s composed of e i g h t t h r e e - d i g i t i n d u s t r i e s , whereas the l a t t e r group i s composed of f o u r . Each s e c t o r i s then d i v i d e d r a d i a l l y i n t o the number of equal area " p i e c e s " e q u i v a l e n t t o the number of t h r e e - d i g i t i n d u s t r i e s composing the i n d u s t r y group. The r e -s u l t i s a c i r c l e made up of lUO pie c e s of equal s i z e . The arrangement of i n d u s t r y groups and i n d u s t r i e s noted i n Graph 1 was determined by the number of regions i n which each i n d u s t r y group or indus-t r y was present i n 1967. The arrangement of i n d u s t r y groups ( s e c t o r s ) w i l l be explained f i r s t . Beginning a t the "south" of the graph and moving i n a counterclockwise d i r e c t i o n , the i n d u s t r y group s e c t o r s are plac e d i n the order determined by t h e i r decreasing u b i q u i t y . The f i r s t seven i n d u s t r y groups (food and beverages, wood, f u r n i t u r e , p r i n t i n g and p u b l i s h i n g , metal f a b r i c a t i n g , n o n - m e t a l l i c m i n e r a l products, and miscellaneous manufacturing) operate i n a l l 12 re g i o n s . (Where two or more i n d u s t r y groups or i n d u s t r i e s w i t h i n a p a r t i c u l a r i n d u s t r y group are present i n the same number of^r e g i o n s the order of arrangement i s determined by the numerical order o f the S.I.C. code.) A f t e r the seven i n d u s t r y groups present i n a l l 12 r e g i o n s , come the 120 Graph 1. Arrangement of Two- and Three-Digit Industries i n Graphs (See Appendix B for l i s t of industries by Standard Industrial Classification Code.) Graph 2. Manufacturing I n d u s t r i e s Operating i n Census D i v i s i o n 1 i n 1967 121 Graph 3. Manufacturing Industries Operating in Census Division 2 i n 1967 122 123 Graph i | . Manufacturing Industries Operating in Census Division 3 i n 1967 Graph 5. Manufacturing Industries Operating in Metropolitan Vancouver i n 196 7 Graph 6. Manufacturing Industries Operating in the Rest of Census Division h i n 1967 126 Graph 7. Manufacturing Industries Operating in Metropolitan Victoria i n 1967 Graph 8. Manufacturing Industries Operating in the Rest of Census Division 5 i n 1967 Graph 9« Manufacturing Industries Operating in Census Division 6 in 1967 129 Graph 10. Manufacturing Industries Operating i n Census Division 7 i n 1967 130 Graph 11. Manufacturing Industries Operating in Census Division 8 i n 1967 Graph 12. Manufacturing Industries Operating in Census Division 9 i n 1967 131 Graph 13. Manufacturing Industries Operating in Census Division 10 i n 1 ° 6 7 133 chemical industries represented in 11 regions, the paper and a l l i e d indus-tries and the transportation equipment industries found in eight regions and so on. The tobacco industries, placed las t , are found in none of B.C.'s regions, the only industry group absent from the province. Within each industry group sector the arrangement of the radial pieces was done in a similar manner. In this case in any sector the more distant a piece i s found from the centre of the c i r c l e , the fewer the number of re-gions in which the corresponding industry i s present. Thus, for example, within the food and beverage group, dairy factories and bakeries are found in a l l 12 regions, soft drink manufacturers are located in 11, and so on. In Graphs 2-13 the pieces corresponding to the industries which were present in 1967 are shaded. The arrangement of industry groups and industries is the same on a l l graphs. Interpretation of Graphs The number of industries present i n a region is a crude measure of the diversification of the region's manufacturing economy. In this sense Cen-sus Division 7 i s least diversified, having manufacturing a c t i v i t y i n only 13 industries. On the other hand, in Metropolitan Vancouver 115 of the 11*0 three-digit industries are present. A Spearman rank correlation was calculated between the number of i n -dustries present i n a region and the employment in manufacturing, and be-tween the number of industries and the population of the region (Table XI). As indicated by the correlation coefficients the number of industries i s more highly correlated with population. This indicates that two regions having the same population should have representation i n approximately the same number of industries, regardless of the fact that total manufacturing employment may differ quite markedly between the two regions. Thus, for TABLE XI NUMBER OF MANUFACTURING INDUSTRIES, MANUFACTURING EMPLOYMENT AND POPULATION, FOR REGIONS OF BRITISH COLUMBIA, 1967 Region No. of I n d u s t r i e s Manufacturing Employment Pop u l a t i o n ( A p r i l 1, 1967) Rank Rank D D ('000) Rank D D Census D i v i s i o n 1 19 10 1,711 11 1 1 37.6 11 1 1 2 23 8 6,017 3,697 1* -1* 16 80.1 8 0 0 3 1*0 3 8 5 25 108.9 6 3 9 M e t r o p o l i t a n Vancouver 115 1 61,766 1 0 0 920.5 1 0 0 Rest of Census D i v i s i o n 1* Uo 3 5,1*95 6 3 9 133.1 1* 1 1 M e t r o p o l i t a n V i c t o r i a 51* 2 5,915 5 3 9 173.9 2 0 0 Rest of Census D i v i s i o n 5 35 5 12,033 3,3?i* 2 -3 9 166.1* 3 -2 1* 6 21* 7 9 2 U 81*.7 7 0 0 7 13 12 3,111 10 -2 1* 23.6 12 0 0 8 30 6 7,180 3 -3 9 110.0 5 -1 1 9 20 9 7 -2 1* 50.5 9 0 0 10 17 11 680 12 1 1 91 1*3.6 10 -1 1 17 Sources: F i n a n c i a l Post Survey of Markets and Business Year Book (1967/1968, 1*7, 55, 58), Growth Patterns i n Manufacturing Employment (1961-1967, Table 2), Manufacturing I n d u s t r i e s of Canada: S e c t i o n G (1967, Tables 7, 8) Spearman's formula f o r rank c o r r e l a t i o n ( S p i e g e l , 1961, 21*6) i s given by: r (rank) =: 1 - N(N - 1) , where D i s equal to the d i f f e r e n c e between ranks of corresponding values of X and Y ( i n t h i s case X i s manufacturing employment or p o p u l a t i o n and Y i s the number of i n d u s t r i e s ) and N i s equal t o the number of p a i r s of values (X, Y) i n the data ( i n t h i s case N i s equal to 12). Using the above formula, the c o e f f i c i e n t of rank c o r r e l a t i o n between manufacturing employment and the number of i n d u s t r i e s i n the regions of B.C. i s 0.6818, whereas the c o e f f i c i e n t of rank c o r r e l a t i o n between p o p u l a t i o n and the number of i n d u s t r i e s i s 0.91*06, i n d i c a t i n g a c l o s e r r e l a t i o n s h i p between p o p u l a t i o n and the number of i n d u s t r i e s . 135 example, whereas Census Division 9 had eight times the manufacturing employ-ment of Census Division 10 in 1967, both regions had roughly the same pop-ulation and number of manufacturing industries. The correlation between population and number of manufacturing indus-tries would appear to be related to the fact that, as indicated by the i n -dustrial classification presented at the end of the l a s t chapter, so many industries are oriented to local markets and tend to have distributions similar to the population as a whole. Market orientation i s a relative concept, and as has already been suggested i t varies from one industry to another due to such things as transportability of the finished product and the importance of economies of scale or external economies in production. What this suggests i s that two regions of about the same population should not only have about the same number of manufacturing industries, but that there should be a great deal of overlap as regards the specific industries present. Moreover, i n comparing two regions having different numbers of industries present, the more diversified region should possess most of the industries present i n the less diversified region. Returning to Graphs 2-13, one of the major reasons for constructing these was to determine to what degree regions having a similar diversity of industry (in terms of actual number of industries present) have in fact a similar industry mix. A l l regions have a "core" of eight industries i n common which on the graphs appears as a cluster radiating outwards a short distance from the centre on the "east" side. This group of industries i n -cludes dairy factories; bakeries; sawmills, planing mills and shingle mills; the household furniture industry; publishing and printing; machine shops; ready-mix concrete; and scientific and professional equipment manufacturers. Six of these industries, for reasons already discussed (such as perishability 136 of product, low value of product i n relation to weight or bulk, ubiquity of raw material inputs, lack of significant economies of scale or customization of product), f i t into the category of extreme market orientation to consum-ers (dairy factories, bakeries, publishing and printing, machine shops, ready-mix concrete manufacturers and sci e n t i f i c and professional equipment manufacturers--the ubiquitous branch of this industry being dental labora-tories). As was discussed in Chapter IV interprovincial trade in the prod-ucts of these industries i s very low. It would appear now also to be the case that interregional trade in Br i t i s h Columbia is low, although unfor-tunately no comprehensive data are as yet available on trade flows among the regions of the province to directly confirm this inference. Of the other two ubiquitous industries, sawmills, planing mills and shingle mills are raw material oriented. Their presence i n every region of the province would appear to be a result of the relative ubiquity of the resource and the apparently limited importance of economies of scale. It was found that in Canada as a whole the household furniture industry was, in terms of distribution of value of production, intermediate between very market oriented and very highly concentrated, although the industry was classified as localized (see Table IX in the preceding chapter). The fact that the industry i s present i n every region of B.C. would suggest a highly lo c a l l y market oriented industry. Although every region has at least one establishment classified to this industry, two-thirds of the plants are found i n Metropolitan Vancouver, and as w i l l be shown later a much higher proportion of shipments originate there. Moreover an examination of the types of activities carried on by the household furniture industry (House-hold Furniture Industry, op. c i t . , 20-21) shows that outside Metropolitan Vancouver the industry i s much more a custom business (e.g. concerned with 137 re-upholstering furniture) than within the metropolis. In addition to the core of eight ubiquitous industries, regions which have a relatively small number of industries have similar graphs of indus-t r i a l structure. Those census divisions which have a relatively small num-ber of industries, 20 or less (C.D.'s 1, 7, 9, 10), have industrial struc-ture graphs which tend to be shaded on the "east" and, to a lesser extent, the "northwest" sides. Industry pieces shaded are generally located towards the centre of the c i r c l e . Exceptions to these generalizations seem to be industries which are attracted to a region because of access to non-ubiqui-tous natural resources. These industries are relatively few in number and thus do not distort the industrial structure graphs to a large degree, but nevertheless this type of industry looms very large i n the overall manufac-turing economies of many B.C. regions, a fact which w i l l be shown in tables of industry shipments by region later i n the chapter. Thus while there i s a great deal of overlap i n terms of industries present in the four regions currently under consideration, Census Division 1 i s unique (among the four regions) i n having an iron and steel m i l l and a coking coal plant (other petroleum and coal products industries), only Census Division 9 has any smelting and refining of metals, and Census Division 10 i s alone in having a petroleum refinery. The census divisions having slightly more diversified industrial struc-tures (C.D.'s 2 and 6) tend to di f f e r from the previous four i n having rep-resentation i n a wider variety of industries within the same industry groups (the only industry group added i s textiles). Both of these regions have such localized business industries as feed manufacturersj sash, door and other millwork plants; concrete products manufacturers; and signs and dis-plays makers, each found in no more than two of the previous four regions. 138 The next group of regions (C.D.'s 3 and 8, and the non-metropolitan parts of C.D.'s k and $) have industrial structure graphs whose shaded por-tions extend outwards within the relatively ubiquitous industrial sectors. Industries such as wooden box factories, publishing only, ornamental and architectural metal industry, and plastic fabricators, n.e.s. are typical of these regions but not of the six less diversified census divisions. Two of these four regions, non-metropolitan CD. U and CD. 8 have a wide v a r i -ety of metal fabricating industries. The other major difference between these four moderately diversified regions and the six least diversified areas i s the presence of a wider range of industry groups. Three out of four regions have at least one establishment engaged in a textile industry. The important backwardly linked industry, miscellaneous machinery and equip-ment manufacturers, i s also located in three of these areas and is at the. same time absent from a l l the less diversified census divisions. The elec-t r i c a l , knitting, clothing and leather industry groups are a l l present in at least one region. The two metropolitan areas of Vancouver and Victoria are the most heav-i l y populated and most industrially diversified regions of the province. There are several B.C. industries found only i n Vancouver and Victoria, or in only one of the moderately diversified regions plus the metropolitan areas (and thus perhaps best thought of i n terms of a metropolitan manufac-turing a c t i v i t y ) . The fact that many of these industries are very small in Metropolitan Victoria i s not a concern at this time. Many of these indus-tries are consumer oriented: poultry processing, confectionery, knitting mills other than hosiery mills, m e n ' s clothing, electric lamps and shades, p h a r m a c e u t i c a l s and m e d i c i n e s , jewellery and silverware, and V e n e t i a n blinds. Some manufacture products mainly for use by other businesses: 139 platemaking, typesetting and trade binderyj aircraft and parts; motor vehi-cle parts and accessories; batteries; paint and varnish; and other chemical industries. Fina l l y one industry has important linkages to primary indus-tries i n the province: shipbuilding and repair. Of the 115 three-digit manufacturing industries represented i n Van-couver i n 1967, Ul were found nowhere else in the province. Of these, 31 industries are very non-specialized, having location quotients in the prov-ince of less than 0.5. One could add to this group 10".other metropolitan industries which are also represented i n Victoria. As was stated in Chapter IV, the industries that are underrepresented i n B.C. are almost always, in fact, very concentrated in Ontario and Quebec because of such factors as market potential being sufficiently high there for the firms to achieve adequate scale economies, external economies being more highly developed i n major cities of the central region than elsewhere in the nation, and skilled workers being available for a wide variety of industries. Presumably these same locational forces which tend to concentrate these industries i n Ontario and Quebec have the effect of concentrating the small amount of ac t i v i t y which does exist in British Columbia i n the metropolitan areas of the prov-ince, particularly i n Vancouver. Of the 10 other industries limited in B.C. to Metropolitan Vancouver, such industries as sugar refining; asphalt roofing; aluminum r o l l i n g , cast-ing and extruding; and gypsum products have no more than three or four es-tablishments (production may be dominated by one). Presumably therefore economies of scale are sufficient to make Vancouver the feasible location for serving the provincial market. The three-digit industry, paper box and bag manufacturers, is composed of three four-digit industries, two of which (manufacturers of folding cartons and set-up boxes, and manufacturers of iko corrugated boxes) o n l y have f o u r establishments each i n the p r o v i n c e . On the other hand, there are t e n paper and p l a s t i c bag manufacturers i n B.C., and i t i s not immediately obvious why a l l of these should be i n Vancouver. McGovern (o£. c i t . , 197), i n h i s study of i n d u s t r i a l development i n Van-couver, notes t h a t w i t h i n B r i t i s h Columbia, Vancouver i s an i d e a l s i t e f o r paper conversion p a r t l y because of the r e l a t i v e ease of access t o in p u t s such as paper r o l l s , i n k s , wax, gl u e s , a s p h a l t , f e l t and f i b r e s . With the exception of paper r o l l s these products come from Vancouver p l a n t s . D i s t r i b u t i o n of I n d u s t r i e s Among Regions Measured by Value of Shipments Although the c r i t e r i o n of presence or absence of an i n d u s t r y i s a use-f u l f i r s t step i n comparing the manufacturing s t r u c t u r e s of regions of B r i t i s h Columbia, the weaknesses of t h i s method are q u i t e e v i d e n t . A given i n d u s t r y may be represented i n two regions but may be much l a r g e r i n one r e g i o n than i n another i n terms of a measurable c h a r a c t e r i s t i c such as value of shipments. The d i f f e r e n c e i n s i z e may be i n absolute terms or i n r e l a t i v e terms ( i . e . the i n d u s t r y may account f o r a much greater p r o p o r t i o n of t o t a l manufacturing a c t i v i t y i n one r e g i o n than i n another) or both. I n s h o r t a measure of the amount of a c t i v i t y f o r each i n d u s t r y i n each r e -gion i s needed so as t o describe q u a n t i t a t i v e l y the d i s t r i b u t i o n of a c t i v i -t i e s among regions and the s t r u c t u r e of manufacturing i n a s i n g l e r e g i o n . Data Sources and Methods of E s t i m a t i o n The l i m i t a t i o n s of published data sources, p a r t i c u l a r l y the one compre-hensive and d e t a i l e d p u b l i c a t i o n of the DBS which deals w i t h the d i s t r i b u t i o n of manufacturing on a s u b p r o v i n c i a l s c a l e , Manufacturing I n d u s t r i e s of Can-ada: S e c t i o n G (Geographical D i s t r i b u t i o n ) (1967, Tables 7, 8), have been pointed out i n the preceding chapter. As a r e s u l t i t was necessary t o 11*1 estimate the sizes of many industry groups and industries within regions by turning to a variety of sources which gave some clues as to the size of the establishments classified to these industries. Since value of shipments figures had been previously collected for a l l industries i n the province as a whole (Table V), i t was decided that this would be the measure of manufac-turing activity to be used at the regional level as well. In addition to the value of shipments data which were available for individual industries in the entire province, data on shipments for a l l - i n -dustry totals were available for each of the province's 12 regions, with the exception of Census Divisions 7 and 9. These two census divisions are ag-gregated into one region. In addition to the provincial shipments by indus-try and the all-industry shipments by region, some individual industry data were published for each region. Even for Metropolitan Vancouver, however, the region of the province for which the highest proportion of industry data could be revealed, figures had to be estimated for 69 out of 115 three-digit industries. In the other regions the proportion of three-digit industries for which data could not be published was two-thirds or more. In fact i n the region composed of Census Divisions 7 and 9 estimates of shipments were required for a l l but one of the 20 three-digit industries present, and in Census Divisions 1 and 10 a l l three-digit industry shipments had to be e s t i -mated. In the cases where an industry was present i n only one region and where no st a t i s t i c s were published (or where an industry was present in, say, two regions, where statistics were published for one region but not for the province) shipments of the region were of course equal to the estimated figure for the province as a whole (or the estimated figure for the province as a whole minus the figure for the region for which statistics were av a i l -11*2 able), determined by methods outlined i n the last chapter. This situation applied i n a relatively large number (30) of Metropolitan Vancouver's three-digit industries and for one industry each in Census Division 3, the resid-ual part of Census Division 1* and Metropolitan Victoria. For a l l other i n -dustries i t was necessary to allocate total provincial shipments among two or more regions of the province. Because a higher proportion of data was published at the two-digit i n -dustry group level than at the three-digit level, the estimation procedure began at the more aggregated l e v e l . A matrix was constructed with regions as columns and industry groups as rows. For certain industry groups, sta-t i s t i c s were published by the DBS for a l l but a few regions. These indus-try groups were food and beverage, furniture and fixtures, printing and pub-lishing, metal fabricating, transportation equipment, non-metallic minerals, and miscellaneous manufacturing; for the wood industries, s t a t i s t i c s were published for a l l 11 regions, and therefore no estimation procedure was necessary. Taking the food and beverage industry as an example, no value of ship-ments figures were provided for Census Divisions 1, 7+9, or 10. It was known, however, that total food and beverage shipments for the province i n 1967 were $581*, 1*28,000, of which the eight other regions accounted for $51*0,795,000. This l e f t $1*3,633,000 to be allocated among the three regions l i s t e d above. It was next necessary to examine the three-digit industries within the food and beverage category present i n the three regions. These industries are dairy factories (in a l l three regions), the f i s h products industry (only in C.D.'s 7 and 9), feed manufacturers (in CD. 10), bakeries (in a l l three regions) and soft drink manufacturers (in a l l three regions). It was known that the f i s h products industry i n Census Divisions 7 and 9 had 11*3 shipments of $38,599,000. Subtracting this from the industry group total for the three regions combined yields $5,031*,000. In addition i t was known that total shipments of bakeries i n the three regions totalled $1,1*80,000. Thus dairy factories, feed manufacturers and soft drink manufacturers com-bined must have accounted for shipments of $3,551*,000. Feed manufacturers' shipments i n the province of $35,733,000 were distributed among the regions of the province as follows: Metropolitan Vancouver, $21,07l*,000; remainder of Census Division 1*, $8,512,OOOj Census Division 5 (figures were not pub-lished for Metropolitan Victoria separately), $3,951,000; remainder of the province (in six establishments i n C.D.'s 2, 3, 6 and 10), $2,196,000. For the purpose of the industry group matrix, which was considered preliminary, i t was f e l t justifiable to allocate one-sixth of the latter shipments figure ( i . e . $366,000) to CD. 10 because that region had one feed manufacturer. Soft drink manufacturers' shipments were allocated among the residual re-gions according to number of establishments and population (since the i n -dustry i s very consumer oriented). It was estimated that total shipments in the industry i n the three regions were $600,000, of which shipments worth $150,000 were allocated to CD. 1, $270,000 to C.D.'s 7 and 9 and $180,000 to CD. 10. Total dairy factory shipments of $2,588,000 could now be e s t i -mated. It was now a question of dividing dairy factory and bakery shipments among the three regions. As with soft drink manufacturers this was done on the basis of number of establishments and regional population estimates. With a l l component industry shipments estimated, food and beverage industry group totals were calculated by addition. A similar process of estimation was carried out for the other industry groups, and a l l non-zero cells i n the regional industry group matrix were f i l l e d i n . As has already been mentioned this matrix was regarded as pre-lkh liminary and subject to change as a result of the more detailed estimation procedures at the less aggregated industry l e v e l . In order to estimate regional shipments at the three- and four-digit level the major sources used were the DBS annual industry reports for 1967, for names and addresses of establishments classified to particular indus-t r i e s , and two publications of the provincial government (which have already been referred to i n Chapter IV): the Br i t i s h Columbia Manufacturers' Direc-tory (1966) which for manufacturing firms i n the province l i s t s names, ad-dresses, products and employment size groups, and the Br i t i s h Columbia Trade  Directory (1971), a similar publication which also includes wholesalers, importers and exporters (unfortunately no corresponding index was available for the years between 1966 and 1971). The estimation procedure was basically one of allocating shipments among regions of the province i n proportion to employment. For example shipments of shingle mills in the province were valued at $27,120,000. Total employment was l,k7h» The only two regions for which shingle mil l s t a t i s t i c s were revealed were Metropolitan Vancouver and the remainder of CD. U. With employment of 1,281 these two areas together shipped products worth $2i|,621,000. Thus in the remainder of the province employment was 193 and shipments $2,1+99,000. Based on the two provincial government direc-tories, an employment estimate was made for each establishment i n the re-mainder of the province. An employment figure i n the shingle m i l l industry in each region was arrived at by adding the estimated number of employees for individual establishments, and a shipments figure was then based on em-ployment. Following are the employment and shipments estimates: CD. 2 (eight employees, $100,000), CD. 3 (18 employees, $230,000), Metropolitan Victoria (ll£ employees, $l,50l+,000), remainder of CD. 3> (31 employees, 1 1 * 5 $ 1 * 0 0 , 0 0 0 ) , C D . 6 ( 1 5 employees, $ 1 9 0 , 0 0 0 ) and C.D.'s 7 and 9 ( s i x employ-ees, $ 7 5 , 0 0 0 ) . U n f o r t u n a t e l y there were some i n d u s t r i e s where the d i r e c t o r i e s were not u s e f u l . The r e p o r t i n g u n i t i n the d i r e c t o r i e s i s the f i r m r a t h e r than the establishment (the u n i t used i n the DBS manufacturing p u b l i c a t i o n s ) . Thus the d i r e c t o r i e s do not give the employment s i z e groups of i n d i v i d u a l establishments f o r m u l t i - p l a n t f i r m s (these establishments may be i n more than one r e g i o n , i n more than one i n d u s t r y , or b o t h ) . Most pulp and paper m i l l s i n the p r o v i n c e , f o r example, are owned by i n t e g r a t e d (companies which a l s o own sawmills and i n some cases s h i n g l e m i l l s , veneer and plywood m i l l s and other types of wood processing establishments as w e l l . As a r e s u l t f o r most pulp m i l l s no employment estimate could be made usin g the d i r e c t o r i e s . One measure of s i z e t h a t i s a v a i l a b l e f o r a l l pulp and paper m i l l s i n the province i s annual c a p a c i t y of p r o d u c t i o n i n tons, published each year i n the B r i t i s h Columbia F i n a n c i a l and Economic Review (e.g. 1967, 1*7, Table 27). For the areas of the province f o r which pulp and paper m i l l s t a t i s t i c s c o u l d not be p u b l i s h e d ( a l l except M e t r o p o l i t a n Vancouver and Vancouver I s l a n d ) , shipments were a l l o c a t e d i n approximate p r o p o r t i o n t o the annual c a p a c i t i e s of the pulp and paper m i l l s . Another p u b l i c a t i o n of the DBS, Growth Patt e r n s i n Manufacturing Em-ployment by Counties and Census D i v i s i o n s (1961-1967) was a l s o found u s e f u l i n e s t i m a t i n g shipments f o r those i n d u s t r i e s i n which f i r m s operate estab-lishments i n more than one r e g i o n . Employment f i g u r e s f o r manufacturers of e l e c t r i c wire and cable i n C D . 8 and f o r manufacturers of p l a s t i c s and s y n t h e t i c r e s i n s i n C D . 6, f o r example, were able t o be c a l c u l a t e d u s i n g t h i s p u b l i c a t i o n ( i b i d . , Table 1 * ) . These are two i n d u s t r i e s i n which ac-t i v i t y i s found o n l y i n Vancouver pl u s one r e g i o n i n the i n t e r i o r of the 11*6 p r o v i n c e . Furthermore i n both cases the i n t e r i o r p l a n t s are owned by the same f i r m s that a l s o operate establishments i n M e t r o p o l i t a n Vancouver. As t o t a l employment i n the f i r m s w i t h more than one establishment c o u l d be es-timated u s i n g the d i r e c t o r i e s of manufacturing f i r m s , the knowledge of em-ployment i n the establishments outside of Vancouver permitted r e g i o n a l es-timates of shipments. As a means of checking the v a l i d i t y of some of the estimates of s h i p -ments by r e g i o n , the p u b l i c a t i o n Manufacturing I n d u s t r i e s of Canada: S e c t i o n G (Geographical D i s t r i b u t i o n ) (196U, 1965, 1966, Tables 7, 8) was examined f o r years p r i o r t o 1967 (the most recent year f o r which the p u b l i c a t i o n i s a v a i l a b l e ) . I n c e r t a i n cases s t a t i s t i c s f o r p a r t i c u l a r i n d u s t r i e s by r e g i o n could be revealed i n one year but not i n another. M o d i f i c a t i o n s t o the ma-t r i x of i n d u s t r i a l shipments by r e g i o n were considered necessary i n a few cases. Value of Shipments by Industry and Region Table X I I ( t h i s t a b l e as w e l l as Tables X I I I and XIV, because of l e n g t h , have been placed i n Appendix A ) , the f i n a l r e s u l t of the e s t i m a t i o n proce-dures j u s t d i s c u s s e d , g i v e s a complete i n v e n t o r y of a l l i n d u s t r y groups and i n d u s t r i e s i n terms of value o f shipments of goods of own manufacture among the 11 regions of the pr o v i n c e . These data have been used t o c o n s t r u c t Tables X I I I and XIV. In Table X I I I the shipments of each i n d u s t r y i n each r e g i o n are d i v i d e d by t o t a l p r o v i n c i a l shipments i n the i n d u s t r y , thus en-a b l i n g comparisons of r e g i o n a l d i s t r i b u t i o n s of i n d u s t r i e s t o be made. I n Table XIV the shipments of each i n d u s t r y i n each r e g i o n are d i v i d e d by t o t a l r e g i o n a l shipments i n a l l manufacturing i n d u s t r i e s . This enables comparisons of the r e l a t i v e importance of a p a r t i c u l a r i n d u s t r y i n the o v e r a l l i n d u s t r i a l s t r u c t u r e from one r e g i o n t o another. 1U7 Interpretation of Data Much of the remainder of the chapter i s devoted to discussing the data presented in these three tables. Industries are examined in the groups that were established i n the preceding chapter. The order in which the industry-groups are discussed i s determined by the order in which the theoretical framework suggested they would appear in a developing region. The discus-sion involves both an examination of distribution patterns of the industries and the relative importance of industries or groups of industries in the regions' overall manufacturing structures. The discussion is also concerned with differences in the nature of particular industries' products from re-gion to region (where these have been found to exist). In addition the ap-p l i c a b i l i t y of the assignment of particular industries to groups made at the provincial level i s examined at the regional level. After the examination of the regional distribution of industries and regional differences i n the importance of particular industries i n the over-a l l manufacturing structure, block diagrams portraying industry structures of the individual regions are presented as was done for the province as a whole at the end of Chapter IV. Primary processing industries. Ten industries were classified i n the preceding chapter as being engaged in processing raw materials of the prov-ince; their presence i n B.C. can be explained i n terms of minimization of assembly costs of raw materials. Table XV gives a breakdown by region of shipments in these industries. Total shipments ($1,718,£27,000) do not agree exactly with the figure given in Chapter IV ($1,736,069,000). This is because for two industries the group to which the industry has been classified i n particular regions is different from the group to which the industry i s classified for the province as a whole. In the province the 11*8 TABLE XV VALUE OF SHIPMENTS OF PRIMARY PROCESSING INDUSTRIES, BRITISH COLUMBIA AND REGIONS, 1967 Region Value of % of P r o v i n c i a l % of Shipments Value of Regional Value ($•000) Shipments of Shipments i n a l l I n d u s t r i e s Census D i v i s i o n 1 2 3 M e t r o p o l i t a n Vancouver Rest of Census D i v i s i o n 1* M e t r o p o l i t a n V i c t o r i a Rest of Census D i v i s i o n 5 6 7 + 9 8 10 1*6,716 102,317 50,539 1*31*, 975 103,688 1*3,210 l*Oi*,666 71,1*17 289,037 163,1*62 8,1*50 2.72 5.95 2.91* 25.31 6.03 2.51 23.55 1*.16 16.82 9.51 0.1*9 92.32 93.50 61*. 03 26.32 66.1*2 35.20 92.95 82.26 97.83 91.21 36.90 B r i t i s h Columbia 1,718,527 100.00 53.87 Ik9 i n d u s t r i a l chemical i n d u s t r y (S.I.C. 378), dominated by pro d u c t i o n a t Cominco's p l a n t s i n Kimberley ( C D . 1) and T r a i l ( C D . 2 ) , i s c l a s s i f i e d as primary p r o c e s s i n g . I n other regions of the province the i n d u s t r i a l chem-i c a l i n d u s t r y , however, i s mainly engaged i n p r o v i d i n g i n p u t s f o r primary processing a c t i v i t i e s and i s c l a s s i f i e d as backwardly l i n k e d . Thus i n Table XV only i n d u s t r i a l chemical shipments i n C.D.'s 1 and 2 are i n c l u d e d . A l s o i n c l u d e d are shipments of the i r o n and s t e e l m i l l (S.I.C. 291) at Kimberley. This operation i s c l e a r l y raw m a t e r i a l o r i e n t e d , based as i t i s on i r o n t a i l i n g s from the l e a d - z i n c mine. On the other hand, i n M e t r o p o l i t a n Van-couver the i r o n and s t e e l i n d u s t r y i s c l a s s i f i e d as import s u b s t i t u t i n g , as i t i s f o r the province as a whole. Because primary processing i s important i n every region of the prov-ince the ran k i n g of regions i n terms of shipments of these i n d u s t r i e s i s ve r y s i m i l a r t o t h a t of re g i o n s i n terms of t o t a l manufacturing shipments. Nevertheless the r e l a t i v e importance of primary p r o c e s s i n g v a r i e s c o n s i d e r -a b l y from one r e g i o n t o another. These i n d u s t r i e s are not s u r p r i s i n g l y l e a s t important i n r e l a t i v e terms i n the two m e t r o p o l i t a n areas of the prov-i n c e . I n the r e s t of the province there appears t o be a r e l a t i o n s h i p be-tween the p r o p o r t i o n of the t o t a l r e g i o n a l labour f o r c e employed i n manufac-t u r i n g (Table IV) and the p r o p o r t i o n of manufacturing accounted f o r by the primary p r o c e s s i n g group. (The f a c t t h a t the two percentages being com-pared are f o r d i f f e r e n t years suggests t h a t the r e l a t i o n s h i p should only be considered as a rough g e n e r a l i z a t i o n . ) S p e c i f i c a l l y a h i g h p r o p o r t i o n of the labour f o r c e i n manufacturing i s a s s o c i a t e d w i t h a high degree of primary p r o c e s s i n g . Thus i n C D . 10, w i t h by f a r the lowest p r o p o r t i o n of the t o t a l labour f o r c e i n manufacturing, primary processing accounts f o r o n l y 36.90* of a l l manufacturing shipments. I n C D . 3 and non-metropolitan i5o C D . kf where manufacturing a c t i v i t y accounts f o r a smaller p r o p o r t i o n of the labour f o r c e than i n the province as a whole, primary p r o c e s s i n g r e p -resents 60-70$ of a l l manufacturing shipments. I n C D . 6, where manufac-t u r i n g i s of average importance, primary processing accounts f o r s l i g h t l y more than 80$. F i n a l l y i n the regions where manufacturing i s of above av-erage importance primary processing i s v e r y dominant, accounting f o r more than 90$ of a l l manufacturing shipments. The only exception t o t h i s p a t t e r n appears t o be C D . 1, where manufacturing i s only of average importance, but primary p r o c e s s i n g a c t i v i t i e s account f o r over 90$ of manufacturing shipments. This apparent r e l a t i o n s h i p s i m p l y s t a t e s t h a t i f manufacturing i s an important a c t i v i t y i n the non-metropolitan p a r t s of the p r o v i n c e , i t i s o n l y because the manufacturing i s of a low-order type. I n terms of value of shipments the l a r g e s t primary processing i n d u s t r y i s sawmills and p l a n i n g m i l l s (S.I.C. 2513). P r i m a r i l y engaged i n con-v e r t i n g softwood lumber ( o f the 518 establishments c l a s s i f i e d t o t h i s i n -d u s t r y o nly 13, w i t h the exception of one, a l l south of 51° l a t i t u d e , pro-duced hardwood lumber—Sawmills and P l a n i n g M i l l s , 1967, 31-35), the saw-m i l l and p l a n i n g m i l l i n d u s t r y i s the most u b i q u i t o u s primary processing i n d u s t r y , the only one i n f a c t which i s found i n a l l r e g i o ns of the prov-i n c e . As s t a t e d by F a r l e y (1972, 100) "From the coast t o the I n t e r i o r P l a i n s and from m e t r o p o l i t a n areas to r u r a l hamlets, i t would be d i f f i c u l t t o f i n d a community i n the province whose economic base i s not to some ex-t e n t dependent upon s a w m i l l i n g . " . Nevertheless, as i n d i c a t e d by the value of shipments f i g u r e s the i n d u s t r y i s not e v e n l y d i s t r i b u t e d i n the p r o v i n c e . Looking at the three regions of the mainland coast, M e t r o p o l i t a n Van-couver, the remainder of the Lower Mainland and the C e n t r a l and North Coast r e g i o n (C.D.'s 7 and 9), the p a t t e r n i s one of c o n c e n t r a t i o n of a c t i v i t y 151 in the Vancouver area. Farley (ibid., 101) discusses the reasons behind this areal concentration i n terras of Vancouver's particular advantages: "the comparative ease with which logs can be rafted in the Strait of Georgia and in the semitidal reaches of the lower Fraser River and i t s north-side tributaries [and] t n e a v a i l a b i l i t y of suitable m i l l sites i n Vancouver's commodious harbour and i n sheltered waters nearby". On the other hand, the Central sand North Coast region has particular disadvantages for sawmilling: '•the limited resource hinterland, and the absence of opportunity for inte-gration of r a i l and sea exports there" (ibid.). Besides Vancouver i t s e l f the most important sawmilling area of coastal British Columbia i s Vancouver Island excepting Metropolitan Victoria. With-in this region centralization i s less than on the mainland coast, but there are nevertheless important concentrations in the Cowichan-Chemainus and Port Alberni areas (ibid., 102). In the interior the distribution of sawmills i s also more decentralized than on the mainland coast. In terms of value of shipments two areas ( C D . 6—the Kamloops area and C D . 8—the Prince George area) dominate. Interior sawmills tend to be located along the major railway routes: "the CNR lines from Yellowhead Pass to Prince Rupert and to Kamloops, the PGE (British Columbia Railway) from Fort St. John to Squamish, and the CPR route from Revelstoke to Vancouver" (ibid., 105). These r a i l routes traverse C.D.'s 6 and 8 . The discussion w i l l now turn from the regional distribution pattern of sawmills to regional differences i n the relative importance of the industry (Table XIV). Within the province as a whole 20.0k% of manufacturing ship-ments are accounted for by sawmills and planing mills . Based on this aver-age figure the regions of the province can be grouped i n terms of the degree 152 to which the industry dominates their respective manufacturing economies. Differences of course not only reflect absolute locational advantages pos-sessed by particular areas for the industry, but also variations i n the success of regions i n attracting other manufacturing activity. Clearly i n a group by themselves are C.D.'s 6 and 8 where in 1967 this industry ac-counted for 65.89$ and 61+.31$ of their respective manufacturing shipments. The industry i s also dominant i n other interior areas (C.D.'s 1—East Kootenay, 3—Okanagan and 10—Northeast) and on Vancouver Island. Sawmills and planing mills are of moderate significance i n terms of total manufac-turing activity i n CD. 2 (West Kootenays), the Lower Mainland (excluding Metropolitan Vancouver) and Metropolitan Victoria. In Metropolitan Van-couver sawmills and planing mills account for only 10.72$ of total manu-facturing shipments. Clearly this i s a result of the advantages the prov-ince's largest urban area offers to a wide variety of manufacturing a c t i v i -ties, rather than to any inherent disadvantages of the area for sawmilling i t s e l f . On the other hand, in the Central and North Coast region (C.D.'s 7 and 9) the very low contribution sawmills and planing mills make to total manufacturing shipments (3.UU$) i s a result not only of the unusual impor-tance of other manufacturing (specifically other primary processing) a c t i v i -ties i n the area, but i s also due to actual locational disadvantages of the area to the industry, discussed above. As well as regional variations i n the relative importance of the saw-m i l l : and planing m i l l industry,' there are differences i n the average ship-ments per establishment as indicated by Table XVI. In the southwestern part of the province (in Metropolitan Vancouver and on Vancouver Island) the average mil l had shipments of $l+-$5,000,000, whereas in a l l interior census divisions average shipments were under $1,000,000 in 1967. The d i f -153 TABLE XVI AVERAGE VALUE OF SHIPMENTS PER ESTABLISHMENT IN THE SAWMILL AND PLANING MILL INDUSTRY, BRITISH COLUMBIA AND REGIONS, 1967 Region No. of Establishments Value of Shipments Average Value of Shipments/ Establishment ($•000) Census D i v i s i o n 1 2 3 M e t r o p o l i t a n Vancouver Rest of Census D i v i s i o n 1* M e t r o p o l i t a n V i c t o r i a Rest of Census D i v i s i o n 5 6 7 + 9 8 10 30 21* 61* 1*1 21 5 27 93 10 180 23 21,531* 22,017 29,253 177,060 39,315 20,159 138,961 57,206 10,171* 115,21*3 8,1*50 718 917 1*57 1*,319 1,872 1*,032 5,11*7 615 1,017 61*0 367 B r i t i s h Columbia 518 639,372 1,231* Sources: Adapted from Manufacturing I n d u s t r i e s of Canada: S e c t i o n A (Summary f o r Canada) (1967, Table 8), Manufacturing I n d u s t r i e s of Canada: S e c t i o n G (Geographical  D i s t r i b u t i o n ) (1967, Tables 7, 8), Sawmills and P l a n i n g M i l l s (1967, 31-35) 15U ference i n size would appear to be a result of two major factors—the nature and distribution of the forest resource and the relative ease with which the raw material can be transported to the s i t e . Interior forests are charac-terized by smaller-sized trees and lower volumes of usable timber per acre, but much larger forested areas, than the coast. These factors alone would help account for the smaller-sized mills in the interior? within a given radius interior mills would have on the average less usable timber a v a i l -able than those on the coast. The second factor (transportation costs) also favours the larger size of coastal mills. Transporting logs by water, either in rafts (in sheltered coastal waters) or i n barges (in the more exposed waters) is relatively inexpensive, and as a result coastal mills can effec-tively draw logs from greater distances than those i n the interior. The distribution pattern of shingle mills (S.I.C. 2511) i n British Columbia is one of much greater areal concentration than i s the case of sawmills. As indicated by Table XIII more than 90% of shipments origina-ted i n Metropolitan Vancouver and the rest of the Lower Mainland. Interior production i s very small. This appears to be largely the result of the distribution of the raw material resource, western red cedar. As stated in the British Columbia Forest Industries Yearbook (1965-1966, B13), "While cedar i s found widely dispersed over the southerly half of British Columbia i t i s essentially a coastal species growing west of the Cascades.". More-over mills have long been established i n the Lower Fraser Valley where, ac-cording to Bustard (1972, 31), "the best cedar i n the province was located". In relative terms shingle milling i s most important i n the non-metro-politan Lower Mainland where i t accounts for 3.91* of manufacturing ship-ments. Veneer and plywood mills (S.I.C. 252) are, lik e shingle m i l l s x largely 155 dependent on one tree species for raw material. The large-diameter and straight-grain Douglas f i r peeler logs are the basis of the veneer and ply-wood industry.,(Farley, op_. c i t . , 116). In 1967 production was concentrated i n Metropolitan Vancouver and on Vancouver Island. Interior regions pro-duced less than of 15$ of total output, by value, handicapped as they are by smaller-diameter Douglas f i r trees than are found on the coast. Of the 26 veneer and plywood plants i n the province seven produce ve-neer only. Five of these plants are found in the interior, one on Vancouver Island and one i n Vancouver. Typically these plants are owned by companies which transport the veneer to their own plywood mills located closer to the market. This procedure greatly reduces the volume of raw material shipped. Thus a veneer plant in Youbou i n Vancouver Island's Cowichan Valley ships i t s production to a plywood plant owned by the same company in Victoria. In eastern B.C., plants i n Golden (CD. 1), Creston (CD. 2) and McBride (CD. 8) ship veneer to plywood factories i n the Alberta centres of Calgary, Fort Macleod and Edmonton, respectively (British Columbia Forest Industries  Yearbook, 1967, B13j Industrial Expansion in British Columbia by Census  Divisions, 1963, 1). In the province as a whole veneer and plywood mills account for 5.21$ of manufacturing shipments. The relative importance of the industry does not vary a great deal from one region to another where the industry is present, except i n the case of Victoria where more than 13$ of total manu-facturing shipments are i n this industry. The miscellaneous wood industries (S.I.C. 259) were also classified as primary processing. In Chapter IV i t was noted that closeness to raw mate-r i a l s was less essential for these industries than for sawmills. As a re-sult production tends to concentrate i n Metropolitan Vancouver (86.06$ of 156 provincial shipments), although the wood preservation industry i s quite significant in the interior of the province. Besides the wood industries the other raw material oriented industry based on the province's forest resources i s pulp and paper mills (S.I.C. 271), in 1967 the second largest manufacturing industry in the province in terms of shipments. Before discussing the factors which help explain the distribution of pulp and paper production among the regions of the province, i t i s perhaps useful to consider the regional implication of the size of es-tablishments i n the industry. Pulp and paper mills i n B.C. are far larger in terms of average value of shipments per establishment than are sawmills. Thus in 1967 18 pulp and paper mills produced more than three-quarters the value of shipments of 518 sawmills. This implies that presence or absence of the pulp and paper industry in a particular region of the province may well be the result of locational decisions of one or two firms, clearly not the case as far as the sawmilling industry i s concerned. Unlike the saw-milling industry the pulp and paper industry tends to be either a major part of a region's economic base or non-existent. As indicated by Tables XII and XIII pulp and paper production i s con-centrated i n coastal regions. In 1967 three-quarters of the value of ship-ments were accounted for by Vancouver Island (CD. 5) and the Central and North Coast region (C.D.'s 7 and 9). A further 13% originated in the Lower Mainland (including Metropolitan Vancouver). Farley (op_. c i t . , I l l ) has ac-counted for this heavy concentration of the pulp and paper industry i n coastal B.C. i n terms of three major factors, raw material supplies (coastal tree species are well suited to the production of high quality pulpj water, used in very large quantities i n the manufacture of pulp and paper is read-i l y available), low-cost water transport (particularly significant i n the 157 Georgia S t r a i t r e g i o n i n the movement of wood chi p s from sawmills and p l y -wood p l a n t s by barge t o the pulp m i l l s ) , and comparative ease of e f f l u e n t d i s p o s a l i n comparison w i t h i n t e r i o r m i l l s . Expansion i n t o the i n t e r i o r i s a recent occurrence. The f i r s t i n t e r i o r m i l l a t C a s t l e g a r (C.D. 2) was completed i n I960. L o c a t i o n of pulp m i l l s i n the i n t e r i o r of the province i s l a r g e l y a r e s u l t of the f a c t that "wood costs are the most important s i n g l e f a c t o r i n determining the p r o f i t a b i l i t y of a pulp m i l l " (The Pulp and Paper Industry of B r i t i s h Columbia, 1970, 8). Pulp and paper m i l l s have l o c a t e d i n centres i n the i n t e r i o r where assembly of raw m a t e r i a l s , l a r g e l y wood chi p s from surrounding sa w m i l l s , i s r e l a -t i v e l y inexpensive. The C a s t l e g a r m i l l b e n e f i t s from i t s l o c a t i o n on Arrow Lake i n terms of raw m a t e r i a l assembly, w h i l e Kamloops (C.D. 6) and p a r t i c -u l a r l y P r i n c e George (C.D. 8) are the centres of important s a w m i l l i n g areas. As suggested b e f o r e , i n every r e g i o n except M e t r o p o l i t a n Vancouver where i t i s present, pulp and paper m i l l i n g i s a major economic a c t i v i t y , ac-counting f o r at l e a s t 10% of manufacturing shipments. Indeed i n C.D. 7 (whose shipments f i g u r e s have been aggregated w i t h those of C.D. 9) perhaps 90% of manufacturing shipments are accounted f o r by two pulp and paper m i l l s i n Powell R i v e r and Ocean F a l l s . W e l l over h a l f of manufacturing a c t i v i t y i n C.D. 5 (minus V i c t o r i a ) i s i n the pulp and paper i n d u s t r y , and i n C.D. h (minus Vancouver) the i n d u s t r y ranks second i n s i z e t o s a w m i l l i n g . In r e l -a t i v e as w e l l as i n absolute terms the pulp and paper i n d u s t r y i n the i n t e -r i o r i s most s i g n i f i c a n t i n C.D. 8. The nature of products manufactured by pulp and paper m i l l s v a r i e s r e -g i o n a l l y . The three M e t r o p o l i t a n Vancouver m i l l s produce book paper, f i n e paper, wrapping paper, t i s s u e paper, b u i l d i n g paper and paperboard. Pulp and newsprint and i n some cases other paper products such as wrapping paper 158 and paperboard were produced i n 1Q67 by the Vancouver Island mills at Port Alberni, Campbell River and Crofton and the Central Coast centres of Powell River and Ocean F a l l s . The other 10;mills i n the province produced pulp (one at Prince George also manufactured wrapping paper) (Pulp and Paper  M i l l s , 1967, 16) . Cohn (op_. c i t . ) has discussed how the importance of locational proxi-mity to raw materials varies depending on the product manufactured. For pulp mills nearness to raw materials i s very significant because weight loss may be as much as $0% (ibid., 61+). No further loss of weight occurs, however, in the conversion of pulp to paper, and i n fact substantial weight gain may occur with the addition of non-fibrous materials such as clay (ibid., 82-83). In the manufacture of relatively cheap grades such as newsprint and wrapping paper, which use only one or two kinds of pulp, the advantage gained by locating close to pulp mills i s that "It is' ... possible to transfer the wet pulp to the beaters of the paper plant, thus obviating the expense of drying i t , " (ibid., 82) . Cohn states, however, that the manufacture of finer grades of paper, which uses many types and grades of pulp i s attracted to markets rather than materials. Thus while B.C. is a major producer of wood pulp and newsprint i t is much less significant in the production of fine papers (in 1967 more than 90% of national production (by weight) was in Ontario and Quebec—Pulp and Paper M i l l s , op. c i t . , Table 13). The market orientation of this part of the industry is further emphasized by the fact that i n 1967 B.C.'s one plant producing book paper and other fine papers was i n Metropolitan Vancouver. The smelting and refining industry (S.I.C. 295), f i f t h largest in the province, i s composed of only two establishments, one i n T r a i l (C.D. 2) which processes a variety of minerals (although principally lead and zinc), 159 i n c l u d i n g ores mined i n the southeastern p a r t of the p r o v i n c e , and the other i n K i t i m a t ( C D . 9) which converts alumina imported l a r g e l y from Jamaica i n t o aluminum i n g o t s , and which, as has a l r e a d y been s t a t e d i n Chapter IV, has l o c a t e d i n the North Coast area on a deep-water s i t e which has v a s t q u a n t i t i e s of low-cost h y d r o - e l e c t r i c power a v a i l a b l e . Smelting and r e f i n i n g accounted f o r o n l y 1+.61+* of p r o v i n c i a l manufac-t u r i n g shipments i n 1967, but i n the two regions where establishments are l o c a t e d i t i s of e x c e p t i o n a l importance, accounting f o r 60-70* of the value of shipments i n C D . 9 and more than o n e - t h i r d of shipments i n C D . 2 . As has been s t a t e d e a r l i e r the two establishments i n C.D.'s 1 and 2 i n the i n d u s t r i a l chemical i n d u s t r y (S.I.C. 378), and the i r o n and s t e e l m i l l (S.I.C. 291) i n C D . 1 have been c l a s s i f i e d to primary processing be-cause t h e i r products are manufactured i n c o n j u n c t i o n w i t h the mining or smelting of l e a d , z i n c and other metals. Not o n l y do these areas produce the bulk of the province's i n d u s t r i a l chemical output, but w i t h i n the two regions the i n d u s t r y i s of great r e l a t i v e importance, ranking second i n C D . 1 t o s a w m i l l i n g and second i n C D . 2 t o smelting and r e f i n i n g . The i r o n and s t e e l i n d u s t r y ranks t h i r d i n terms of v a l u e of shipments i n C D . 1. The other raw m a t e r i a l o r i e n t e d i n d u s t r i e s are i n the food and beverage s e c t o r . About 95* of B.C.'s f i s h products i n d u s t r y (S.I.C. I l l ) i s found i n M e t r o p o l i t a n Vancouver and C.D.'s 7 and 9. As has a l r e a d y been mentioned the i n d u s t r y i s dominated by the p r o c e s s i n g of salmon. The l o c a t i o n of f i s h p r o c e s sing p l a n t s i s r e l a t e d t o the salmon migrations i n the l a t e sum-mer when the f i s h enter the r i v e r mouths heading f o r spawning waters i n the i n t e r i o r l a k e s (Robinson, 1972, 5 ) . F i s h p r o c e ssing p l a n t s concentrate around the mouths of the two p r i n c i p a l r i v e r s of the B.C. coast, the F r a s e r 160 and Skeena. There are some canneries between these two r i v e r mouths, but much of the f i s h harvested along the coast i s transported t o the F r a s e r and Skeena canneries. The f i s h p r o c e s sing i n d u s t r y i n r e l a t i v e terms i s most s i g n i f i c a n t t o the economy of C.D.'s 7 and 9. In another c o a s t a l census d i v i s i o n (C.D. S>), however, i t p l a y s a very s m a l l r o l e i n the manufacturing s t r u c t u r e . The second l a r g e m a t e r i a l o r i e n t e d i n d u s t r y i n the food and beverage group i s f r u i t and vegetable canners and preservers (S.I.C. 112). The i n -d u s t r y i s found only i n the province's two l a r g e s t f r u i t and vegetable growing d i s t r i c t s — t h e Lower Fr a s e r V a l l e y ( p l u s the a d j o i n i n g M e t r o p o l i t a n Vancouver area) and the Okanagan V a l l e y (C.D. 3). The canning and p r e -s e r v i n g i n d u s t r y i s i n r e l a t i v e terms p a r t i c u l a r l y important i n C.D. 3, where i t accounts f o r 18.12$ of manufacturing shipments, making i t the sec-ond l a r g e s t i n d u s t r y . I n non-metropolitan C.D. U i t accounts f o r lU.20$ of shipments and i s the t h i r d l a r g e s t i n d u s t r y . On the other hand, i n M e t r o p o l i t a n Vancouver i t only accounts f o r s l i g h t l y i n excess of 1% of manufacturing output. The d i s t r i b u t i o n p a t t e r n of w i n e r i e s (S.I.C. l!+7) at the i n t r a p r o v i n -c i a l s c a l e seems to show aspects of both m a t e r i a l and market o r i e n t a t i o n . Grapes are grown commercially i n the province i n the Okanagan and S i m i l -kameen V a l l e y s i n C.D. 3, but much of the wine production i s l o c a t e d i n the m e t r o p o l i t a n areas (although as was mentioned i n Chapter IV some w i n e r i e s use b e r r i e s grown both i n the Lower Fraser V a l l e y and the Saanich P e n i n s u l a , a p a r t of M e t r o p o l i t a n V i c t o r i a ) . Non resource p r o c e s s i n g i n d u s t r i e s . In 1967 t o t a l shipments of a l l manufacturing i n d u s t r i e s not c l a s s i f i e d as p r o cessing raw m a t e r i a l s were almost $1,500,000,000. Most of these i n d u s t r i e s which are not a t t r a c t e d 161 to raw m a t e r i a l s l o c a t e i n or near M e t r o p o l i t a n Vancouver o r , t o a much l e s s e r e xtent, i n M e t r o p o l i t a n V i c t o r i a . This i s i n d i c a t e d i n Table XVII which breaks down the value of shipments of non resource processing indus-t r i e s by r e g i o n . Cohn (op_. c i t . , hh), i n d i s c u s s i n g the d i s t r i b u t i o n of i n d u s t r y i n the s t a t e s of Washington and Oregon, found a s i m i l a r p a t t e r n i n which "Of the i n d u s t r y not based on n a t u r a l resources ... approximately 75 percent i s l o c a t e d i n [ P o r t l a n d and S e a t t l e ^ w i t h an a d d i t i o n a l 5 per-cent i n S e a t t l e ' s near neighbour, Tacoma, and an equal amount i n Spokane.". (The i n d u s t r i e s which Cohn c l a s s i f i e s as " r e s o u r c e - o r i e n t e d " do not c o r r e -spond e x a c t l y w i t h the primary processing i n d u s t r i e s discussed i n the pre-ceding p a r t of t h i s chapter, but nevertheless the comparison w i t h B.C. seems v a l i d . ) Cohn ( i b i d . , 1*6-50) discusses a number of l o c a t i o n f a c t o r s which a t t r a c t non resource processing manufacturing t o l a r g e urban c e n t r e s , s p e c i f i c a l l y w i t h reference t o the c i t i e s of the P a c i f i c Northwest. Given the f a c t o r s t h a t he considers there i s no reason t o b e l i e v e t h a t Vancouver's p o s i t i o n v i s - a - v i s the r e s t of B r i t i s h Columbia would be s i g n i f i c a n t l y d i f f e r e n t . The f i r s t f a c t o r considered i s the q u a l i t y and q u a n t i t y of the labour f o r c e a v a i l a b l e i n l a r g e c i t i e s . A s m a l l town simply cannot be expected t o have a v a i l a b l e a t any one time a s u f f i c i e n t number of s k i l l e d workers l o o k i n g f o r work. Entrepreneurs would l i k e l y f i n d i t necessary t o r e c r u i t workers from a m e t r o p o l i t a n centre i f they wished t o s e t up a manufacturing p l a n t i n a s m a l l town. By l o c a t i n g i n the l a r g e s t urban centre i n a r e g i o n ( f o r the time being the term " r e g i o n " i s being used at a p r o v i n c i a l r a t h e r than a s u b p r o v i n c i a l s c a l e ) an entrepreneur has access t o a s i z a b l e l o c a l market not only i n terms of a consumer market but a l s o an i n d u s t r i a l and commercial market. 162 TABLE XVII VALUE OF SHIPMENTS OF INDUSTRIES OTHER THAN PRIMARY PROCESSING, BRITISH COLUMBIA AND REGIONS, 1967 Region Value of Shipments (•I'OOO) % of P r o v i n c i a l % of Value of Reg i o n a l Value Shipments of Shipments i n a l l I n d u s t r i e s Census D i v i s i o n 1 2 3 M e t r o p o l i t a n Vancouver Rest of Census D i v i s i o n 1* M e t r o p o l i t a n V i c t o r i a Rest of Census D i v i s i o n 5 6 7 + 9 8 10 3,886 7,117 28,1*22 1,217,383 52,1*12 79,557 30,676 15,399 6,1*02 15,71*14 1U, 1*52 0.26 0.1*8 1.93 82.73 3.56 5.1*1 2.08 1.05 0.1*1* 1.07 0.98 7.68 6.50 35.97 73.68 33.53 61*.80 7.05 17.71* 2.17 8.79 63.10 3 r i t i s h Columbia 1,1*71,1*50 100.00 1*6.13 163 As Cohn ( i b i d . , i|8) s u c c i n c t l y s t a t e s , "The presence of i n d u s t r y i s condu-c i v e t o the growth of i n d u s t r y . " . Even i f a manufacturer i s p r i m a r i l y en-gaged i n supplying i n p u t s t o i n d u s t r i e s f a i r l y evenly dispersed throughout the r e g i o n (e.g. i n p u t s to resource p r o c e s s i n g i n d u s t r i e s ) a l o c a t i o n i n the l a r g e s t centre may be most advantageous i n terms of markets si n c e l a r g e r e -source-based i n d u s t r i e s t y p i c a l l y have t h e i r head o f f i c e s or purchasing o f -f i c e s there ( c e r t a i n l y t r u e f o r Vancouver i n the case of the f o r e s t r y and mining i n d u s t r i e s ) . The l a r g e urban centre i s an a t t r a c t i v e l o c a t i o n f o r manufacturers i n terms of i t s a b i l i t y t o supply r e l a t i v e l y cheaply a nd at short n o t i c e ( i n comparison w i t h the more remote p a r t s of the region) i n d u s t r i a l i n p u t s . Even i n the case where the m a t e r i a l s used by a manufacturer are not produced i n the r e g i o n , they would t y p i c a l l y be d i s t r i b u t e d from the major metropolis t o manufacturers both w i t h i n the m e t r o p o l i t a n area and i n other p a r t s of the r e g i o n . I n terms of non-material " i n p u t s " ( i . e . banking, e n g i n e e r i n g , ad-v e r t i s i n g , l e g a l and other s e r v i c e s ) the l a r g e c i t y would again o f f e r ad-vantages over smaller towns or r u r a l areas. The f i n a l f a c t o r considered by Cohn i n e x p l a i n i n g the c o n c e n t r a t i o n of non resource processing i n d u s t r i e s i n l a r g e urban centres i s t r a n s p o r t a t i o n s e r v i c e s . T y p i c a l l y the major c i t y of a r e g i o n i s the f o c a l p o i n t of the region's t r a n s p o r t a t i o n system, the p o i n t from which a l l other p a r t s of the r e g i o n can be reached most q u i c k l y and cheaply, and i n a d d i t i o n i t may be the major p o i n t through which goods f l o w between the r e g i o n and the r e s t of the world. I f economies of s c a l e are r e l a t i v e l y important i n a p a r t i c u l a r i n d u s t r y , p r o d u c t i o n may tend t o concentrate a t the p o i n t of l e a s t - c o s t t r a n s p o r t a t i o n and serve the e n t i r e r e g i o n from t h e r e . An a d d i t i o n a l f a c t o r , not considered by Cohn, a p p l i e s s p e c i f i c a l l y t o 161* those establishments which are owned outside the r e g i o n . U s u a l l y the met-r o p o l i t a n c e n t r e ( s ) w i l l be the p a r t of a r e g i o n w i t h which entrepreneurs from outside are most f a m i l i a r . As a r e s u l t e x t e r n a l l y owned establishments may have a tendency t o concentrate i n the major urban area t o an even greater degree than the preceding l o c a t i o n a l f a c t o r s would suggest. This p o i n t i s mentioned by Denike and Leigh (op_. c i t . , 79) f o r Vancouver: "East-ern manufacturers c o n s i d e r i n g branch p l a n t l o c a t i o n s i n B.C. r a r e l y l o o k beyond Metro Vancouver as a p o t e n t i a l s i t e f o r t h e i r o p e r a t i o n s . " . L o c a l i z e d i n d u s t r i e s . L o c a l i z e d i n d u s t r i e s as defined i n Chapter IV are a l l manufacturing a c t i v i t i e s other than primary p r o c e s s i n g and the backwardly l i n k e d i n d u s t r i e s f o r which (1) a d i s p r o p o r t i o n a t e l y l a r g e amount of B.C. shipments are s o l d w i t h i n the p r o v i n c e , and (2) a d i s p r o p o r t i o n a t e l y l a r g e amount of B.C. consumption i s met by establishments w i t h i n the prov-i n c e . D e s t i n a t i o n s of shipments data were not a v a i l a b l e on a s u b p r o v i n c i a l s c a l e . As a r e s u l t l o c a l i z e d i n d u s t r i e s i n regions are defined i n terms of t h e i r export and import p a t t e r n s at the p r o v i n c i a l l e v e l . I n some regions a p a r t i c u l a r i n d u s t r y may be a l o c a l i z e d i n d u s t r y , whereas the same indus-t r y producing d i f f e r e n t products i n another r e g i o n i s more c o r r e c t l y i d e n -t i f i e d as a s u p p l i e r t o resource-based i n d u s t r i e s . (More g e n e r a l l y , an i n -d u s t r y c l a s s i f i e d t o a p a r t i c u l a r group f o r the province as a whole may not be c l a s s i f i e d t o t h i s same group i n a l l regions.) I n Table X V I I I , which provides a r e g i o n a l breakdown of shipments i n the l o c a l i z e d i n d u s t r y group, the t o t a l value of shipments f o r the province takes the nature of i n d u s t r i e s i n each r e g i o n i n t o account. I n the d i s c u s s i o n of the i n d u s t r i e s which supply i n p u t s to raw m a t e r i a l o r i e n t e d i n d u s t r i e s , the cases i n which an i n d u s t r y i s c l a s s i f i e d t o a d i f f e r e n t i n d u s t r y group from one r e g i o n t o another are mentioned. For the time being, however, a t t e n t i o n i s focussed 165 TABLE X V I I I VALUE OF SHIPMENTS OF LOCALIZED INDUSTRIES, BRITISH COLUMBIA AND REGIONS, 1967 Region Value of Shipments ($*000) % of P r o v i n c i a l Value of Shipments % of Regional Value of Shipments i n a l l I n d u s t r i e s Census D i v i s i o n 1 2 3 M e t r o p o l i t a n Vancouver Rest of Census D i v i s i o n 1* M e t r o p o l i t a n V i c t o r i a Rest of Census D i v i s i o n 5 6 7 + 9 8 10 3,688 6,985 18,370 678,780 39,698 1*2,706 19,639 13,927 5,305 12,059 11*, 267 0.1*3 0.82 2.15 79.35 U.61* 1*.99 2.30 1.63 0.62 1.1*1 1.67 7.29 6.38 23.25 1*1.08 25.1*3 31*. 79 l*.5l 16.01* 1.80 6.73 62.30 B r i t i s h Columbia 855,1*21* 100.00 26.82 166 on the distribution of the localized industries as a group. In comparison with a l l of the non resource processing manufacturing discussed above, localized industries have a slightly less concentrated pattern. The proportions of total provincial shipments accounted for by Metropolitan Vancouver and Metropolitan Victoria are both less i n the case of the localized industries. Every other region, however, has a greater proportion of the total provincial shipments i n localized industries than for a l l the non resource processing a c t i v i t i e s . This pattern i s expected. By definition localized industries manufacture products which are relatively unimportant i n interprovincial trade. The dispersion of the localized i n -dustry group among the regions of the province suggests that there would also be less interregional trade proportionately i n the commodities of these industries than in the goods of the other non resource processing industries. In terms of relative importance the localized industries are rather i n -significant in the overall manufacturing structures of C.D.'s 1, 2, 5 (resid-ual), 7+9 and 8. In C.D. 10 this group of industries dominates the value of shipments i n manufacturing (the largest industry i n the region i s petro-leum refining—S.I.C. 365>1). Elsewhere localized industries are of above average importance i n the manufacturing structures of the two metropolitan areas of the province. Some of the localized industries produce goods mainly for household consumption, whereas others manufacture goods for use largely by the busi-ness sector ( i . e . non resource processing manufacturing a c t i v i t i e s , con-struction, tertiary industries). It was decided to examine the distribution among the regions of the province of these two types of localized industries. The household/business distinction has been made i n an a p r i o r i manner since no input-output table of the province i s available. It i s based on the 167 nature of the products manufactured by the establishments classified to the particular industry. The household or business orientation of localized industries i n the province as a whole i s indicated i n Table IX. Considered at the regional level two modifications have been made. In C.D.'s 3 and h (residual) the miscellaneous furniture industry (S.I.C. 266) i s classed as business oriented, producing mainly special purpose furniture. In the prov-ince as a whole the manufacture of springs and mattresses appears to be slightly larger than the special purpose segment of the industry, and there-fore the industry was classified as household oriented i n Table IX. Table XIX presents the regional breakdown of value of shipments i n l o -calized household and business industries. Within the localized sector business oriented industries are more concentrated than those producing goods for households. Metropolitan Vancouver accounts for a considerably greater proportion of provincial shipments i n the business industries than i n the household. In other regions the household sector accounts for the larger proportion, the only exceptions being C.D.'s 6 and 10, where the presence of petroleum refineries accounts for the greater than expected im-portance of localized business industries. In the theoretical framework i t was implied that while the appearance of localized industries i s characteristic of stage 2 of the region's devel-opment, the relative growth of the sector w i l l continue as the region enters more advanced stages of development. Given that the products of some l o -calized business industries are sold to manufacturing industries character-i s t i c of higher stages of development, i t might be expected that the l o c a l -ized business sector would develop more gradually than the localized house-hold sector. As an example, the industries manufacturing paper boxes and bags (S.I.C.'s 2731, 2732, 2733) are localized—there i s relatively l i t t l e TABLE XIX VALUE OF SHIPMENTS OF LOCALIZED INDUSTRIES ORIENTED TO HOUSEHOLD AND BUSINESS MARKETS, BRITISH COLUMBIA AND REGIONS, 196? Household Business Region Value of % of Prov. % of Prov. % of Value of Shipments Value of Pop. a l l Reg. Shipments ($'00O) Shipments Shipments ($'000) % of Prov. % of Value of a l l Reg. Shipments Shipments Census D i v i s i o n 1 2 3 M e t r o p o l i t a n Vancouver Rest of Census D i v i s i o n 1* M e t r o p o l i t a n V i c t o r i a Rest of Census D i v i s i o n 5 6 7 + 9 8 10 B r i t i s h Columbia 1,673 5,1*21* 12,060 205,771* 0.58 1.87 1*.17 71.11 1.91* 1*.13 5.62 1*7.50 3.32 1*.96 15.26 12.1*5 2,010 1,561 6,310 1*73,006 0.36 0.28 1.11 83.57 3.97 1.1*3 7.99 23.63 21,01*2 22,701 7.27 7.81* 6.87 9.23 13.1*8 18.1*9 18,656 20,005 3.30 3.53 11.95 16.30 7, Sil l 3,01*7 3,131 5,376 1,618 2.61 1.05 1.08 1.86 0.56 8.59 1*.37 3.82 5.68 2.25 1.73 3.51 1.06 3.00 7.06 12,098 10,880 2,171* 6,683 12,61*9 2.11* 1.92 0.38 1.13 2.23 2.78 12.53 0.71* 3.73 55.23 289,392 100.00 100.00 9.07 566,032 100.00 17.71* 169 interprovincial trade in these commodities. The development of these indus-tries i s , however, stimulated by the growth of many manufacturing industries requiring paper containers, some of which (e.g. miscellaneous food manufac-turers, S.I.C. 1392) are import substituting industries, which become prom-inent only at a later stage of development (stage U). It might be hypothesized that localized household industries would have a similar distribution to population as a whole. In order to test this the breakdown of B.C.'s population i n percentage terms (derived from population figures i n Table XI) among the regions i s compared with the cor-responding localized household shipments (Table XIX). In terms of these two sets of data there i s a considerable surplus of localized household oriented manufacturing in Metropolitan Vancouver ( i . e . Metropolitan Van-couver accounts for a higher proportion of provincial localized household industries than population), and a small surplus i n the rest of C.D. 1+. In C.D. 3 and Metropolitan Victoria, the d e f i c i t of localized household i n -dustries i s small, whereas in a l l other regions of the province the propor-tion of provincial localized household oriented manufacturing i s less than half the share of provincial population (only one-quarter in C.D.'s 6 and 10). It would seem that the forces leading to spatial concentration of the non resource processing industries i n general, discussed above, apply ( a l -though at different degrees) to both the localized household and business industries. Some industries within both household and business groups are of course more dispersed in their areal distributions than others. In the household group dairy factories (S.I.C. 105), bakeries (S.I.C. 129), soft drink manu-facturers (S.I.C. IhX), publishing and printing (S.I.C. 289), and dental laboratories (S.I.C. 38l5) are relatively dispersed, while other industries 170 such as poultry processors (S.I.C. 103), breweries (S.I.C. 11+5), and house-hold (S.I.C. 26l) and miscellaneous (S.I.C. 266) furniture industries are concentrated i n Metropolitan Vancouver. Among the business group, sash, door and other millwork plants (S.I.C. 251*1); machine shops (S.I.C. 308); concrete products manufacturers (S.I.C. 3U7)j and ready-mix concrete manu-facturers (S.I.C. 31+8) are relatively dispersed, whereas sugar refineries (S.I.C. 133)J paper box and bag manufacturers (S.I.C. 273); commercial printing (S.I.C. 286); fabricated structural metal industry (S.I.C. 302); metal stamping, pressing and coating (S.I.C. 30l+); and petroleum refining (S.I.C. 3651) are concentrated i n Metropolitan Vancouver. Some suggestions can be given for the variation i n the degree of spa-t i a l concentration among both the household and business types of localized industries. In the household group, for example, i t was found that soft drink manufacturing was a relatively dispersed industry, whereas within B.C. the brewing industry was largely concentrated i n Metropolitan Vancouver. Soft drink bottling and brewing are both notable examples of weight-adding operations, the characteristic which makes them localized at the interpro-v i n c i a l l e v e l . Nevertheless there are differences i n the industries which make i t both possible and profitable for breweries to have a less dispersed pattern of location at the intraprovincial level than soft drink bottlers. Munro (op_. c i t . , 135) reports that brewing i s subject to substantial econ-omies of scale. As such there would be relatively large cost increases per unit of product i f brewing was carried on at numerous small-scale establish-ments as is typical with soft drink bottling. Secondly beer is a highly differentiated product which enables a certain amount of cross-trading which would not occur with soft drinks. Thirdly beer is more valuable per unit weight than soft drinks so that i t can presumably withstand higher, d i s t r i -171 b u t i o n c o s t s . The f a c t t h a t p o u l t r y processing i s a l o c a l i z e d i n d u s t r y at the pro-v i n c i a l s c a l e but concentrated i n Greater Vancouver and found elsewhere i n the province o n l y i n the Lower Fraser V a l l e y and V i c t o r i a i s probably a r e -s u l t of the f a c t t h a t the importance of closeness t o consumers (because of the preference f o r c h i l l e d r a t h e r than f r o z e n p o u l t r y ) i s balanced by a need t o be i n c l o s e p r o x i m i t y t o the p o u l t r y farms. (As was s t a t e d i n Chapter IV p o u l t r y processing i s a weight-reducing operation.) P o u l t r y r a i s i n g i n B.C. i s i t s e l f concentrated i n the Lower Mainland and Vancouver I s l a n d ( B r i t i s h Columbia Fac t s and S t a t i s t i c s , op. c i t . , 1+2-U3). As has already been mentioned i n Chapter IV the p a s t e u r i z a t i o n and packaging of f l u i d m i l k (the major a c t i v i t y of d a i r y f a c t o r i e s ) i s a l o -c a l i z e d i n d u s t r y at the p r o v i n c i a l l e v e l because raw mil k i s cheaper t o t r a n s p o r t than the f i n i s h e d product. Apparently t h i s same f a c t o r i s r e -sponsible f o r the d i s p e r s i o n of the d a i r y i n d u s t r y throughout the pr o v i n c e . On the other hand, the importance of the d a i r y i n d u s t r y i n the r e s i d u a l p a r t of C.D. h (the i n d u s t r y accounts f o r almost 10% of a l l manufacturing s h i p -ments there) i s probably due l a r g e l y to the l o c a t i o n of a p l a n t i n Abbots-f o r d producing evaporated and powdered m i l k . These products are, u n l i k e f l u i d m i l k , e a s i l y t r a n s p o r t e d long d i s t a n c e s (Munro, op_. c i t . , 132) and are presumably shipped t o a l l p a r t s of the p r o v i n c e . P u b l i s h i n g and p r i n t i n g , which i s dominated by newspaper p l a n t s , can be d e s c r i b e d as an i n d u s t r y which produces a h i g h l y p e r i s h a b l e and d i f f e r e n -t i a t e d product. As such d i s p e r s i o n of production c o u l d be expected. Bread i s a l s o a p e r i s h a b l e product which cannot be tr a n s p o r t e d long d i s t a n c e s . Moreover despite the f a c t t h a t r e l a t i v e l y l a r g e establishments employing more than 100 employees e x i s t , the m u l t i p l i c i t y of s m a l l bakeries ( i n 1967 172 there were 29h bakeries in the province, employing an average of 10 persons each—Manufacturing Industries of Canada: Section A (Summary for Canada), 1967, 68-69, Table 8) would seem to indicate that economies of scale are not very significant. On the other hand, household furniture plants are even smaller on the average than bakeries. The average employment per establishment i n B.C. was only seven in 1967 i n 215 establishments (ibid., iiO-Ul). Hoffman (1965, 350) accounts for the small size of furniture factories i n terms of the bulky, rather cheap products produced that cannot usually be shipped long distances. As was stated earlier i n this chapter, while establishments classified to this industry do exist in a l l the census divisions of the province, they are usually engaged i n such custom act i v i t i e s as re-uphol-stering outside of Metropolitan Vancouver. As indicated by Table XIII about 90* of the value of shipments of the B.C. household furniture industry is v. accounted for by Metropolitan Vancouver. The factor which accounts for the concentration of many small firms i n the one centre i s probably the style factor which as noted by Renner et. a l . (1955, 620) i s almost as important in furniture as in clothing. On the other hand, the very high concentra-tion i n Metropolitan Vancouver of the miscellaneous furniture industries, which produce such things as church, school, hospital, laboratory and store furniture, as well as springs and mattresses, is probably a result of such factors as scale economies (some mattress factories employ more than 100 people—British Columbia Trade Directory, op. c i t . ) and proximity to markets which would themselves presumably be more concentrated in the Lower Mainland than the market for household furniture. The dispersion of dental laboratories throughout the regions of the province reflects the highly customized nature of this particular activity. 173 Among the l o c a l i z e d i n d u s t r i e s o r i e n t e d t o business markets the d i s -p e r s i o n of the sash and door i n d u s t r y throughout the province would appear t o be a r e f l e c t i o n of the l a c k of s c a l e economies i n the i n d u s t r y r e s u l t i n g from the customization of the product (Munro, op_. c i t . , 120). I n a d d i t i o n some of the wood used by the i n d u s t r y would presumably come from l o c a l sources. Machine shops are another type of a c t i v i t y which are dispersed a t the i n t r a p r o v i n e i a l l e v e l as w e l l as being l o c a l i z e d a t the i n t e r p r o v i n c i a l l e v e l . As w i t h the sash and door i n d u s t r y c ustomization of product i s prob-a b l y the main reason. The s e r v i c e nature of machine shops i s i n d i c a t e d by the f a c t t h a t i n Canada as a whole more than o n e - t h i r d of a l l shipments of goods i n the i n d u s t r y were accounted f o r by the "amount r e c e i v e d i n payment f o r work done on m a t e r i a l s and products owned by others" (Machine Shops, 1967, Table 8 ) . The other two dispersed l o c a l i z e d business o r i e n t e d i n d u s t r i e s are concerned w i t h the p r o d u c t i o n of c o n s t r u c t i o n m a t e r i a l s : concrete products manufacturers and ready-mix concrete manufacturers. Producing b u l k y , low-value commodities, these i n d u s t r i e s were found by Cohn (op_. c i t . , ll+9) f o r the U.S. P a c i f i c Northwest t o be "dispersed not o n l y throughout the n a t i o n but a l s o throughout the r e g i o n i n accordance w i t h p o p u l a t i o n and b u i l d i n g a c t i v i t y " . In the case of the l o c a l i z e d sectors c a t e r i n g t o business markets, which are concentrated i n Vancouver, the most important reasons f o r t h e i r a r e a l d i s t r i b u t i o n p a t t e r n would appear t o be the r e l a t i v e importance of economies of sc a l e and the c o n c e n t r a t i o n of t h e i r p r o v i n c i a l market i n Greater Van-couver. There i s only one sugar r e f i n e r y i n B.C. \Given t h a t the province's p o p u l a t i o n can only support one establishment—Munro (op_. c i t . , 136) suggests 17U t h a t even t h i s one r e f i n e r y i s suboptimal i n s c a l e — V a n c o u v e r i s the l o g i c a l l o c a t i o n , p a r t i c u l a r l y since the raw m a t e r i a l i s imported by s h i p , and many food f a c t o r i e s which are l a r g e consumers of sugar are l o c a t e d i n the metro-p o l i t a n area. Economies of scale a l s o seem t o p l a y the major r o l e i n accounting f o r the c o n c e n t r a t i o n of B.C.'s petroleum r e f i n i n g i n d u s t r y i n Vancouver. The fo u r r e f i n e r i e s i n Vancouver are unquestionably suboptimal i n s c a l e ( i b i d . , 157). Nevertheless small r e f i n e r i e s do e x i s t i n other p a r t s of the prov-i n c e : at Taylor i n the Peace R i v e r area (C.D. 10) near the o i l f i e l d s them-s e l v e s , and at P r i n c e George (C.D. 8) and Kamloops (C.D. 6) which are s i t -uated on the p i p e l i n e s which c a r r y crude petroleum from A l b e r t a and n o r t h -e a s t e r n B.C. t o the Lower Mainland and Washington S t a t e . In both C.D.'s 6 and 10 the petroleum i n d u s t r y i s of considerable r e l a t i v e importance, ac-counting f o r about 9% of t o t a l manufacturing shipments i n the Kamloops area and almost hS>% i n the Peace R i v e r area. The f a b r i c a t e d s t r u c t u r a l metal i n d u s t r y i s b a s i c a l l y a customized type of a c t i v i t y l i k e machine shops, but u n l i k e the l a t t e r i n d u s t r y economies of s c a l e i n production are q u i t e important. Two l a r g e Vancouver e s t a b l i s h -ments employing perhaps 1,000 workers between them dominate the s t r u c t u r a l metal i n d u s t r y ( B r i t i s h Columbia Trade D i r e c t o r y , op. c i t . ) . Another metal f a b r i c a t i n g i n d u s t r y , metal stamping, p r e s s i n g and c o a t i n g , i s a l s o h e a v i l y concentrated i n M e t r o p o l i t a n Vancouver, although i t i s found i n some of the other regions of the province as w e l l . As was mentioned i n Chapter IV t h i s i n d u s t r y b a s i c a l l y can be d i v i d e d i n t o two p a r t s , the sheet metal works and the manufacture of t i n cans. I t was noted t h a t the sheet metal works are customizersj they can be d e s c r i b e d as the r e l a t i v e l y u b i q u i t o u s branch of the i n d u s t r y . On the other hand, t i n cans are a standardized product, and 175 economies of s c a l e are s i g n i f i c a n t i n t h e i r manufacture. Despite the f a c t t h a t can manufacturing i s a volume-adding o p e r a t i o n whose products can t h e r e -f o r e not stand much t r a n s p o r t a t i o n , i t would seem that the s c a l e economy-f a c t o r i s r e s p o n s i b l e f o r the l o c a t i o n of B.C.'s two major can f a c t o r i e s i n Vancouver. Of course the advantages of a Vancouver l o c a t i o n are compounded by the f a c t t h a t the f r u i t and vegetable, and f i s h p r o c e s s i n g i n d u s t r i e s are both c l o s e at hand. As was suggested above the c o n c e n t r a t i o n of the manufacturers of paper boxes and bags i n Greater Vancouver might be e x p l a i n e d i n terms of the closeness t o a m u l t i p l i c i t y of other i n d u s t r i e s which would buy t h e i r con-t a i n e r s . The other major l o c a l i z e d business i n d u s t r y which was notably concen-t r a t e d i n Vancouver i s commercial p r i n t i n g . This i n d u s t r y i s of course very much a t t r a c t e d t o i t s market because of the inherent c u s t o m i z a t i o n of the product. Table X I I I i n d i c a t e s t h a t i n the sense of b e i n g i n operation i n almost every census d i v i s i o n , the i n d u s t r y i s dispersed. The f a c t t h a t the value of production i s s p a t i a l l y concentrated simply i n d i c a t e s t h a t Van-couver i s the commercial and f i n a n c i a l centre of the p r o v i n c e . Firms w i t h head o f f i c e s i n Vancouver and branch o f f i c e s throughout the province would presumably have most of t h e i r p r i n t i n g done by Vancouver f i r m s . Backwardly l i n k e d i n d u s t r i e s . In the preceding chapter i t was found t h a t 1 2 t h r e e - d i g i t manufacturing i n d u s t r i e s were p r i m a r i l y engaged i n sup-p l y i n g i n p u t s t o the province's primary a c t i v i t i e s ( s p e c i f i c a l l y t o the p r i -mary processing manufacturing i n d u s t r i e s and the primary i n d u s t r i e s of f o r -e s t r y , m e t a l l i c mining, f i s h i n g , and f r u i t and vegetable c u l t i v a t i o n ) . In a d d i t i o n s e v e r a l other i n d u s t r i e s , w h i l e i n the province as a whole not mainly engaged i n producing i n p u t s f o r the primary i n d u s t r i e s , do have t h i s 176 f u n c t i o n i n p a r t i c u l a r r e g i o n s . Table XX, t a k i n g i n t o account the nature of i n d u s t r i e s i n s p e c i f i c r e g i o n s , provides an a r e a l breakdown of the value of shipments i n these i n d u s t r i e s . In comparison w i t h the shipments of primary p r o c e s s i n g i n d u s t r i e s shown i n Table XV, production of in p u t s f o r these i n d u s t r i e s i s h i g h l y concentra-ted i n M e t r o p o l i t a n Vancouver and V i c t o r i a . Together these txvo urban areas accounted f o r 27.82* of primary processing shipments but &9»k9% of shipments of i n d u s t r i e s producing i n p u t s f o r the primary processors i n 1967. E l s e -where i n the province these input producing i n d u s t r i e s are found mainly i n the r e s i d u a l p a r t s of C.D.'s h and 5, as w e l l as i n C D . 3 . In other r e -gions of the province the i n d u s t r i e s are of v e r y minor importance. In r e l -a t i v e terms t h i s type of manufacturing i s a l s o most s i g n i f i c a n t i n Metro-p o l i t a n Vancouver and V i c t o r i a , accounting f o r approximately 10* of a l l manufacturing i n the former and 27* i n the l a t t e r . The l a r g e s t i n d u s t r y i n t h i s category i s miscellaneous machinery and equipment manufacturers (S.I.C. 315) whose shipments i n 1967 were $60,059,000. As has already been s t a t e d , establishments i n B.C. c l a s s i f i e d to t h i s i n -d u s t r y produce machinery l a r g e l y f o r use by the province's primary resource i n d u s t r i e s , p a r t i c u l a r l y forest-based a c t i v i t i e s . Table X I I I shows t h a t M e t r o p o l i t a n Vancouver accounts f o r more than 85* of shipments i n t h i s i n -d u s t r y , w i t h the remainder d i v i d e d among the three other regions of the southwestern p a r t of the province and C D . 3 . A couple of the general f a c -t o r s t h a t help e x p l a i n why non resource processing i n d u s t r i e s i n general tend t o concentrate i n Vancouver would seem t o apply s p e c i f i c a l l y i n the case of machinery. F i r s t , machinery i s customized, and manufacturers would thus f i n d i t advantageous t o l o c a t e i n c l o s e p r o x i m i t y t o the head o f f i c e s of the resource companies. Secondly, i n terms of m a t e r i a l s , Vancouver would 177 TABLE XX VALUE OF SHIPMENTS OF BACKWARDLY LINKED INDUSTRIES, BRITISH COLUMBIA AND REGIONS, 1?67 Region Value of % of P r o v i n c i a l % of Shipments Value of Regional Value ($•000) Shipments of Shipments i n a l l I n d u s t r i e s Census D i v i s i o n 1 2 3 M e t r o p o l i t a n Vancouver Rest of Census D i v i s i o n h M e t r o p o l i t a n V i c t o r i a Rest of Census D i v i s i o n 5 6 7 + 9 8 10 135 3,108 165,U93 6,33U 33,595 10,227 1,132 900 1,U55 100 0. 06 1. Uo 7U.39 2.85 15.10 U.60 o .5 i o.uo 0.65 0.01; 0.27 3.93 10.02 U.06 27.36 2.35 1.30 0.30 0.81 O.hh B r i t i s h Columbia 222,it79 100.00 6.97 "178 o f f e r advantages over other p a r t s of the province i n terms of access t o ma-c h i n e r y p a r t s , e i t h e r manufactured i n the c i t y i t s e l f or imported. The very small a g r i c u l t u r a l implement i n d u s t r y (S.I.C. 311), the other i n d u s t r y i n the machinery group which provides inputs t o resource or p r i -mary processing i n d u s t r i e s , i s l i m i t e d to three small establishments i n the Okanagan V a l l e y (C.D. 3) producing mainly s p e c i a l i z e d spraying equipment f o r the l o c a l orchards. Wooden box f a c t o r i e s (S.I.C. 256) i n C.D. 3 and M e t r o p o l i t a n V i c t o r i a produce mainly f r u i t boxes. In the other regions the boxes produced have more general uses, and the i n d u s t r y has been c l a s s i f i e d as a l o c a l i z e d b u s i -ness o r i e n t e d a c t i v i t y t h e r e . Two t r a n s p o r t a t i o n equipment i n d u s t r i e s , s h i p b u i l d i n g and r e p a i r (S.I.C. 327) and motor v e h i c l e manufacturers (S.I.C. 321+), f i t i n t o the category of su p p l y i n g inputs t o the province's resource-based i n d u s t r i e s . The l a r g e r of the two i s s h i p b u i l d i n g and r e p a i r . I n terms of r e g i o n a l d i s t r i b u t i o n the i n d u s t r y i n 1967 was s p l i t f a i r l y evenly between Metro-p o l i t a n Vancouver and M e t r o p o l i t a n V i c t o r i a (the only other r e g i o n having establishments c l a s s i f i e d t o the i n d u s t r y was the r e s i d u a l p a r t of Van-couver I s l a n d ) . In r e l a t i v e terms t h i s i n d u s t r y i s f a r more important i n V i c t o r i a , b e i n g the l a r g e s t manufacturing i n d u s t r y i n t h a t c i t y (accounting f o r 21$ of the value of a l l manufacturing shipments), than i n Vancouver. Presumably the s h i p b u i l d i n g i n d u s t r y i n V i c t o r i a r e c e i v e d i t s impetus f o r development and has reached i t s present s i z e as a r e s u l t of the c i t y being an important naval p o r t . Shipyards w i t h defence c o n t r a c t s would a l s o be engaged i n b u i l d i n g v e s s e l s f o r use by the primary i n d u s t r i e s . Motor v e h i c l e manufacturing (as has already been discussed the i n d u s t r y i n B.C. i s engaged i n the manufacture of t r u c k s ) i s composed of fpur estab-179 lishments i n M e t r o p o l i t a n Vancouver accounting f o r almost 90% of shipments and one establishment i n C D . 3. I t i s thought t h a t , as w i t h the m i s c e l -laneous machinery i n d u s t r y , customization and a c c e s s i b i l i t y t o component p a r t s would account f o r the c o n c e n t r a t i o n of motor v e h i c l e manufacturers i n Vancouver. Whereas i n the province as a whole the i n d u s t r y ' s major ac-t i v i t y i n 1967 seemed t o be the assembly of custom-built l o g g i n g t r u c k s , the one p l a n t i n the Okanagan V a l l e y was a p p a r e n t l y not producing v e h i c l e s f o r the province's primary i n d u s t r i e s (the p l a n t was not l i s t e d i n the pro-f e s s i o n a l f o r e s t r y or mining j o u r n a l s — B r i t i s h Columbia F o r e s t I n d u s t r i e s  Yearbook, 1967, S e c t i o n G; Canadian Mining Manual, 1969, lii .6-173—as a sup-p l i e r t o the resource-based i n d u s t r i e s ) , and t h e r e f o r e i n C D . 3 the indus-t r y i s i n c l u d e d as an import s u b s t i t u t i n g a c t i v i t y . A t h i r d t r a n s p o r t a t i o n equipment i n d u s t r y , b o a t b u i l d i n g and r e p a i r (S.I.C. 328), f o r the province as a whole was c l a s s i f i e d as being an indus-t r y o r i e n t e d t o l o c a l i z e d consumer markets. I t appeared, however, from the Canadian Fisherman & Ocean Science (October, 1972) t h a t the i n d u s t r y i n C.D.'s 7 and 9 was p r i m a r i l y engaged i n b u i l d i n g f i s h i n g boats. As f o r the metal f a b r i c a t i n g s e c t o r , the wire and wire products indus-t r y (S.I.C. 305) was the only a c t i v i t y at the p r o v i n c i a l s c a l e considered t o be mainly concerned w i t h supplying inputs t o the province's resource-based i n d u s t r i e s ( i n t h i s p a r t i c u l a r case, w i t h such products as wire rope and wire c l o t h ) . More than 97* of shipments i n the i n d u s t r y were accounted f o r by Greater Vancouver. Perhaps the p a r t i c u l a r l y high c o n c e n t r a t i o n of t h i s i n d u s t r y can be explained i n terms of p r o x i m i t y t o m a t e r i a l s , s p e c i -f i c a l l y t o the i r o n and s t e e l i n d u s t r y of Vancouver. I n the r e s t of C D . h one establishment c l a s s i f i e d t o t h i s i n d u s t r y manufactures animal cages, the other produces wir e f e n c i n g . I n t h i s p a r t i c u l a r area the i n d u s t r y i s 180 c l a s s i f i e d as a l o c a l i z e d i n d u s t r y s e r v i n g business markets. I n C.D. 8, however, the one establishment i n the i n d u s t r y produces w i r e rope f o r l o g -ging, and thus has been r e t a i n e d i n the backwardly l i n k e d group. There are a number of other metal f a b r i c a t i n g i n d u s t r i e s which, a l -though not c l a s s i f i e d as p r i m a r i l y producing inputs f o r resource o r i e n t e d a c t i v i t i e s a t the p r o v i n c i a l l e v e l , do appear t o have t h i s f u n c t i o n i n c e r -t a i n r e g i o n s . The one sheet metal shop (metal stamping, p r e s s i n g and coat-i n g i n d u s t r y — S . I . C . 30U) i n C.D. 9 produces marine f i t t i n g s f o r the f i s h i n g i n d u s t r y ( B r i t i s h Columbia Manufacturers' D i r e c t o r y , op. c i t . ) . S i n c e , how-ever, C.D.'s 7 and 9 are combined, and there i s no i n d i c a t i o n t h a t the sheet metal shop i n C.D. 7 i s engaged p r i m a r i l y i n p r o v i d i n g i n p u t s t o a resource-based a c t i v i t y , the i n d u s t r y has been r e t a i n e d i n the same category as f o r the province as a whole ( i n d u s t r i e s s e r v i n g l o c a l i z e d business markets). The hardware, t o o l and c u t l e r y i n d u s t r y (S.I.C. 306) i n M e t r o p o l i t a n V i c t o r i a c o n s i s t s of one f i r m making tungsten carbide b i t s f o r the mining i n d u s t r y . I n other regions the i n d u s t r y i s c l a s s i f i e d as import s u b s t i t u -t i n g , as i t has been f o r the province as a whole. I n s e v e r a l regions of the province ( r e s i d u a l p a r t s of C.D.'s k and 5, C.D.'s 6 and 8) machine shops (S.I.C. 308) appear t o be p r i m a r i l y engaged i n producing machinery p a r t s or other s u p p l i e s , or r e p a i r i n g machinery f o r the forest-based i n d u s t r i e s . In C.D. 1 the one establishment c l a s s i f i e d t o the miscellaneous metal f a b r i c a t i n g i n d u s t r y (S.I.C. 309) seems t o have a s i m i l a r f u n c t i o n . As f o r i r o n f o u n d r i e s (S.I.C. 2 9 h — i n the primary metals group), i n C.D. 3 the one establishment has a l s o been c l a s s i f i e d to the category of i n d u s t r i e s s u p p lying inputs to resource o r i e n t e d i n d u s t r i e s because i t produces a g r i c u l t u r a l implements and p a r t s , and packing house machinery 181 and parts. Three of the chemical products industries f i t i n this category. The nature of the products of these industries has been discussed i n the pre-ceding chapter. There i s only one establishment classified to the explo-sives and ammunition manufacturers (S.I.C. 371) i n British Columbia. The plant is located on James Island, s t a t i s t i c a l l y a part of Metropolitan Victoria but lacking any permanent population. For this particular indus-try a relatively isolated location i s desirable ("Victoria Campaign to Lure Business Set Back," 1972, B3). The plastics and synthetic resins industry (S.I.C. 373) consists of three establishments i n Metropolitan Vancouver and one in North Kamloops (CD. 6), a branch of one of the Vancouver plants, which commenced produc-tion i n 1967 presumably i n response to expansion in the plywood industry in the interior of the province. The industrial chemical industry (outside C.D.'s 1 and 2) i s also largely concentrated i n Metropolitan Vancouver ($16,355,000 of a total $23,703,000). Primarily engaged in the production of chlorine, caustic soda and sodium chlorate for the province's pulp and paper mills, activity does, however, exist in other centres of the province, nearer the pulp mills themselves, in Squamish (residual part of CD. U), Nanaimo (residual part of CD. 5) and to a lesser extent i n Prince George (CD. 8) . The largest producer of chlorine and caustic soda i n B.C. is a firm with a plant in Tacoma, Washington. Prior to the late 1950's B.C.'s needs were supplied by this plant. However, since that time the firm has established two plants in B.C., i n Vancouver and Nanaimo, in response to the growth of the pulp and paper industry i n B.C., the low transportability of the chemicals and the limited economies of scale of the industry (Munro, op_. c i t . , 155). 182 A fourth chemical industry, other chemical industries, n.e.s. (S.I.C. 3799), i n the province as a whole has been classified to the import substi-tuting industries. In the Okanagan, however, the industry has been i n -cluded i n the regional total of backwardly linked industries because i t manufactures agricultural chemicals, presumably mainly for l o c a l orchard use. The other industries which are classified as backwardly linked, shoe factories (S.I.C. 17U), leather glove factories (S.I.C. 175), the cordage and twine industry (S.I.C. 213) and manufacturers of e l e c t r i c a l industrial equipment (S.I.C. 336) are found only i n Metropolitan Vancouver. In the case of the shoe factories and leather glove factories, one explanation of the concentration i n Vancouver might be the labour intensity of the indus-tries (in 1967 in a l l leather industries i n B.C., salaries and wages a-mounted to one-third the value of shipments, whereas i n a l l manufacturing industries the corresponding figure was roughly one-quarter—Manufacturing  Industries of Canada; Section F, 1967, Tables 1, !+)• The importance of minimizing wage rates (salaries and wages paid per employee are roughly 60% of those i n a l l manufacturing industries), and the fact that more than half the employment in the leather industry i s female, probably make Vancouver the most suitable location in B.C. Given i t s close links with fishing the cordage and twine industry may be concentrated in Vancouver because the cit y i s presumably the home port of much i f not most of the provincial f i s h -ing f l e e t . The e l e c t r i c a l industrial equipment industry is probably con-centrated in Metropolitan Vancouver for a reason that applied to machinery manufacturers—to be in close proximity to the resource companies' main offices, because the products are of a customized nature. 183 Import substituting industries. Import substituting industries as noted i n Chapter IV are the "highest-order" manufacturing industries found in British Columbia. They are defined as a l l manufacturing activities other than raw material processing and backwardly linked for which a dispropor-tionately small amount of B.C. consumption is met by establishments within the province. Table XXI shows the regional distribution of this group of industries. As was stated i n the previous section there are a few indus-tries which have been classified as import substituting i n the province as a whole, but which i n specific regions are mainly engaged in supplying i n -puts to raw material oriented a c t i v i t i e s . On the other hand, there is one case (a truck manufacturer—S.I.C. 323—in CD. 3) where a backwardly linked industry i n the province as a whole i s classified to the import substitu-ting sector. Table XXI takes account of these modifications. Import substituting industries are more concentrated i n Metropolitan Vancouver than any other group considered, almost 95* of the value of ship-ments of the province originating there. The import substituting sector i s also most important i n Vancouver i n relative terms, accounting for 22.58* of i t s total manufacturing shipments (vs. 12.3k% i n the province as a whole). Other than i n Metropolitan Vancouver the import substituting industries are most significant in the overall manufacturing structure of CD. 3, where they account for 8.79* of total manufacturing shipments. The major reason for CD . ! 3's unexpected prominence in these industries i s discussed i n Chapter VI because the size of the industry group as a whole is particularly the result of specific conditions which existed during the 1960*s. It i s suggested that the factors outlined i n Chapter II and again in Chapter IV, accounting for the relative lateness of appearance of these i n -dustries i n the hypothetical region, would also help explain their relative 1 8 U TABLE XXI VALUE OF SHIPMENTS OF IMPORT SUBSTITUTING INDUSTRIES, BRITISH COLUMBIA AND REGIONS, 1967 Region Value of % of P r o v i n c i a l % of Shipments Value of Re g i o n a l Value ($•000) Shipments of Shipments i n a l l I n d u s t r i e s Census D i v i s i o n 1 2 3 M e t r o p o l i t a n Vancouver Rest of Census D i v i s i o n h M e t r o p o l i t a n V i c t o r i a Rest of Census D i v i s i o n 5 6 7 + 9 8 10 63 132 6,9UU 373,110 6,380 3,256 810 3U0 197 2,230 85 0.02 0.03 1.76 9U.81 1.62 0.83 0.21 0.09 0.05 0.57 0.02 0.12 0.12 8.79 22.58 U.09 2.65 0.19 0.39 0.07 1.2U 0.37 B r i t i s h Columbia 393,5U7 100.00 12.3U 185 concentration in the largest urban area of the province. These factors include: (1) significant economies of scale i n production (e.g. in the meat processing industry—S.I.C. 101, and the manufacture of steel—S.I.C. 291, aluminum—S.I.C. 296, and copper—S.I.C. 297—products); (2) the importance of external economies, particularly when costs of transporting the f i n a l product are relatively low (e.g. clothing establishments—S.I.C.'s 21*3, 2hh— tend to cluster together in order to share a skilled labour pool and to specialize). A factor mentioned earlier i n this chapter pertaining to the invest-ment behaviour of nonresident entrepreneurs would seem relevant here. If an eastern Canadian or an American company, engaged in a non resource pro-cessing industry f e l t that B.C. would provide a suitable location for a branch plant, Vancouver would usually be the specific l o c a l i t y chosen. This factor may pa r t i a l l y account for the very high concentration i n the province's major metropolitan area of the following import substituting i n -dustries i n which establishments located i n Vancouver are typically branch plants of eastern Canadian or American firms: d i s t i l l e r i e s (S.I.C. 11+3)J knitting mills (S.I.C. 239)J hardware, tool and cutlery manufacturing (S.I.C. 306); communications equipment (S.I.C. 335); and manufacturers of electric wire and cable (S.I.C. 338). Another factor which helps explain Vancouver's dominance in one par-ticular import substituting industry, miscellaneous food manufacturers (S.I.C. 1392) is the fact that along with being the centre of a large local market, the c i t y is the province's major port for the importation of raw food products such as coffee, tea and peanuts. A l l the industries cited as examples of the import substituting group in the preceding three paragraphs are well established i n Vancouver, but 186 they must at the same time compete with external manufacturers for the B.C. market i n the commodities they produce. As with the localized industries, the import substituting industries were divided into two groups, one serving households, the other businesses. Table XXII shows the regional distributions of these groups. Based on Table IX which l i s t s the household and business oriented im-port substituting industries for the province as a whole, an examination of the particular products manufactured by region has necessitated some modifications which have been taken into account when constructing Table XXII. The truck body and t r a i l e r industry (S.I.C. 32U) i s household o r i -ented i n C.D.'s h (residual) and 5 (residual), producing t r a i l e r s , campers and mobile homes. In the province as a whole i t is business oriented, largely consisting of sat e l l i t e firms of the truck assemblers, as stated in Chapter IV. The one firm i n Victoria classified to the motor vehicle parts and accessories industry (S.I.C. 325) is considered household oriented be-cause i t produces automobile parts, presumably for used cars. On the other hand, the industry i n the province as a whole i s business oriented, pro-ducing parts for both commercial and industrial trucks as well as automo-bi l e s . The imported clay products industry (S.I.C. 3512) i s dominated by one Vancouver firm producing bathroom fixtures. This has been classified as business oriented because the major purchaser would presumably be the construction industry. On the other hand, in C.D. h (residual) and Victoria the industry consists of two firms making ceramics for household use. Both household and business oriented import substituting industries are very concentrated in Metropolitan Vancouver. In Metropolitan Victoria shipments of both the household and business types of industries are very small i n relation to those of Vancouver but nevertheless quite varied, TABLE XXII VALUE OF SHIPMENTS OF IMPORT SUBSTITUTING INDUSTRIES ORIENTED TO HOUSEHOLD AND BUSINESS MARKETS, BRITISH COLUMBIA AND REGIONS, 1967 Household Business Region Value of % of Prov. % of Value of % of Prov. % of Shipments Value of a l l Reg. Shipments Value of a l l Reg. ($'000) Shipments Shipments ($'000) Shipments Shipments Census D i v i s i o n 1 63 0.03 0.12 - - -2 132 0.06 0.12 - - -3 3,506 1.5U U.UU 3,U38 2.07 U.35 M e t r o p o l i t a n Vancouver 21^,790 9U.29 13.00 158,320 95.52 9.58 Rest of Census D i v i s i o n k 5,960 2.62 3.82 U20 0.25 0.27 M e t r o p o l i t a n V i c t o r i a 1,8U6 0.81 1.50 1,U10 0.85 1.15 Rest of Census D i v i s i o n 5 6U6 0.28 0.15 161; 0.10 0.0U 6 211 0 .09 0.21; 129 0.08 0.15 7 + 9 — - - 197 0.12 0.07 8 650 0.29 0.36 1,580 0.95 0.88 10 - - - 85 0.05 0.37 B r i t i s h Columbia 227,801; 100.00 7.1U I65,7i;3 100.00 5.20 188 several industries being represented. Elsewhere i n the province, however, one or two industries i n each region dominate the import substituting sec-tor. Slaughtering and meat processors (S.I.C. 101) account for the greatest proportion of the value of shipments of household oriented import substitu-ting industries i n C.D.'s 2, 3, U (residual), 5 (residual), 6 and 8. The operation of small meat packing plants in these areas i s probably the result of raw material proximity. As was suggested i n Chapter IV the slaughtering and meat processing industry has characteristics of both a raw material o r i -ented industry, i n that the processing involves weight loss, and an import substituting industry, i n that much of B.C. consumption i s met by Alberta firms. In CD. 1 the household import substituting group i s dominated by one publishing firm (S.I.C. 288). The market provided by Greater Vancouver has had some impetus on the growth of the household oriented import substi-tuting industries i n the Lower Fraser Valley (residual part of CD. U), for example, i n the production of recreational vehicles and mobile homes by that region's truck body and t r a i l e r industry (S.I.C. 32U). In fact the presence of this industry might be regarded as an example of the decentral-ization of industry from Metropolitan Vancouver (Denike and Leigh, op_. c i t . , 83) . In the business import substituting group CD. 3 is dominated by the truck firm already mentioned, the residual part of CD. h by plastic fab-ricators (S.I.C. 385) and the residual part of CD. 5 by a battery manufac-turer (S.I.C. 337). A l l of CD. 6's production is accounted for by a manu-facturer of glass products (S.I.C. 3562), C.D.'s 7 and 9*s by a glass manu-facturer (S.I.C 3561) and a copper foundry (S.I.C. 297) and CD. 10's by a miscellaneous metal fabricator (S.I.C. 309). The business oriented type 189 of import s u b s t i t u t i n g a c t i v i t y i n C.D. 8, which ranks t h i r d i n the province i n terms of value of shipments i n t h i s group, i s dominated by the e l e c t r i c w i r e and cable i n d u s t r y (S.I.C. 338). As with the tr u c k f i r m i n C.D. 3 t h i s was a new i n d u s t r y during the p e r i o d 1961-1967 and w i l l be mentioned again i n the next chapter. Regional I n d u s t r y S t r u c t u r e Diagrams Using the data on the percentage of each region's manufacturing s h i p -ments accounted f o r by each group of i n d u s t r i e s , i t i s now p o s s i b l e t o con-s t r u c t r e g i o n a l i n d u s t r y s t r u c t u r e diagrams. As has been s t a t e d p r e v i o u s l y there are no data