Strong Forest Industry Equals Strong Communities

Year: 
2016

The forest industry is one of B.C.’s most important economic sectors.  Forestry is a key economic driver; B.C. communities depend on the forest industry and thousands of people are employed in the various sectors of the industry. 

In 2013, the total GDP generated by the B.C. forest industry was $12.4 billion with total employment estimated at 145,800 direct and indirect jobs.[1]  Given the high number of mill closures, continued export of large numbers of unprocessed logs, rapid rises in Interior logging rates and declines in value-added manufacturing, the time has come for an expeditious review of forest policy in B.C. It is time to implement new policies that increase public benefits from one of our most important publicly-owned resources.

Community members, forestry workers & conservationists have found common ground in opposing log exports and supporting local, sustainable forestry practices. The B.C. government expedited log exports in 2003 by removing the local milling requirements (appurtenancy) that historically tied companies with logging rights on Crown lands to also provide B.C. milling jobs while failing to foster new mills and value added facilities in the communities supporting the forest industry. 

Under the new rules established in 2003, under the Forestry Revitalization Act, companies merging were no longer subject to public review and comment, which meant there was no opportunity for communities, workers, municipalities or others to raise concerns about job impacts or community sustainability. These mergers and acquisitions along with the removal of appurtenancy resulted in the significant consolidation of forest tenure into the hands of fewer companies. This tenure situation and the development of super mills has stifled the ability of smaller companies to compete and effectively tied up the Province’s forestry resources.  In addition, the law requiring ministerial approval for most tenure transfers was revoked.  The fundamental problem of the Forestry Revitalization Act has been the disconnection of the forest resource from the communities.

With the expansion of super mills, we have seen the point of appraisal moved from communities where mills have closed causing an un-level playing field in stumpage costs with the value added and small community mill paying significantly higher rates per cubic meter for Crown timber.  If the market is skewed in favour of a disproportionately small number of companies, there is justification in suggesting that the playing field could be made more level by granting new forest tenures to smaller players, particularly those who are engaged in value-added production. There is room within the present system to do so given the greatly expanded BC Timber Sales program. “Rather than putting all its timber up for auction, a portion of the wood now held by BC Timber Sales could go, instead, into longer term and likely non-replaceable licences that would at the very least give value-added producers some assurance of supply over several years.”[2]  BC Timber Sales sells to the highest bidder anywhere in the province. 

Under the 2003 Forestry Revitalization Act, a 20% tenure take back occurred with the intent for these resources to transfer to BC Timber Sales, First Nations & Community Forests.  This tenure reallocation rather than encouraging an open market effectively produced a monopoly situation as smaller producers could not compete with major corporations.  Expansion of Community Forests would essentially be a publicly acceptable means to providing an area based allocation controlled by communities and First Nations.  Local processing, value added, diversification, intensive forest management could all be managed and prioritized as locally driven decisions. Community Forests should be large enough to be divided for specific needs, diversity and forest management objectives, “at arm’s length” from direct provincial controls and restrictions. 

A number of questions are raised by the changes to appurtenancy requirements.  Should companies holding forest tenures be allowed to simply walk away from the facilities they operate in communities without losing some or all of those tenures?  What is an acceptable level of investment in the communities and forest districts where tenures are held?  Given the high number of mill closures, the continued export of unprocessed logs (whether out of country or out of community) and declines in value-added manufacturing, a review of forest policy in British Columbia is justified. 

Small and medium sized business is the economic driver of the B.C. & Canadian economy.  When public/Crown resources such as forest tenures are being held by a disproportionally small group of major companies, there is an inherent responsibility for the government to ensure communities are supported and partner in the economic benefits generated from a strong, competitive, sustainable forest industry, which in turn results in more provincial revenue.  Strong local forestry equals strong communities equals strong businesses, which equals a strong local and provincial economy.  They are inextricably linked.

THE CHAMBER RECOMMENDS:

That the Provincial Government:

  1. Consult with First Nations and provide municipalities with input into forest tenures in their regions;

    1. Use the 20% tenure take back to promote and expand Community Forests and First Nation Wood Land licences;

  2. Review forest tenures in areas where mills have been closed and rescind those tenures where appropriate;

  3. Encourage value added forestry investment in communities; and

  4. Review the consequences of the removal of appurtenancy requirements.

Footnotes

[1] http://www.cofi.org/wp-content/uploads/2015/01/bc_industry_impact_01-201...