Mar 13, 2017

From disenfranchised to revitalized: Ten proposals to set our forests and BC’s rural communities on a new course


Fort Nelson and Merritt lie at two geographical extremes, the former perched in the northeast corner near some of British Columbia’s biggest natural gas plays, the latter located deep in the province’s southwest, near rolling dry hills that are home to BC’s biggest ranches.

It takes nearly 15 hours by car to cover the distance between the two communities. Yet despite the distance, Fort Nelson, Merritt and many communities in between them share much in common. They are towns and cities where the natural capital surrounding them no longer generates the local wealth that it once did.

Much of this is a result of provincial government decisions allowing local forests to be unsustainably logged for years.

Merritt exemplifies this. Late last year, one of the town’s two sawmills closed because of a lack of wood. Years of elevated rates of logging set the stage for another 200 millworkers joining the ranks of the unemployed.

In other cases, however, a lack of forest sector jobs can be traced to something else: a shift in government policy that saw successive provincial administrations soften and later abandon requirements that companies logging local forests also provide jobs in local communities turning logs into lumber and other forest products.

Fort Nelson epitomizes this. Since 2008, a local wood panel mill has remained closed. Not only is the mill closed, but the company granted the rights to log the region’s forests in exchange for running the mill isn’t logging either. Local residents and politicians aren’t happy. They’ve demanded that the company’s logging rights be rescinded. But the provincial government has refused to do so.

Fort Nelson and Merritt are far from the only communities left grappling with the social and economic consequences of shuttered mills. In the past 20 years, nearly 100 mills have closed their doors in BC.

In particular, the cost in terms of lost high-paying jobs in smaller communities has been staggering. In the last decade alone, BC’s forest industry payroll has shrunk by 22,400 positions with the biggest job losses by far in the sawmilling and pulp and paper sectors.

In the past 20 years, nearly 100 mills have closed their doors in BC.

This means many regions of the province have seen a sharp decline in sawmilling jobs. In the Highway 16 corridor, for example, only two sizeable sawmills remain along a 400-kilometre-plus span stretching east from the coastal city of Prince Rupert to Houston. There are no more mills in communities like Hazelton, Moricetown and Prince Rupert. Consequently, the region has experienced a surge in exports of raw, unprocessed logs.

Despite troubling declines in forest sector employment, the industry remains a powerful economic force in BC. Where it has invested, the resulting jobs typically pay well above the provincial average and are an important contributor to local and regional economies.

All signs, however, point to a potentially game-changing shift in how future investment decisions will be made. There is overwhelming evidence that logging rates are likely to fall in many parts of the province now or in the foreseeable future. This suggests the smartest investment choices for local communities and regions will be those that place a premium on getting more from less.

What does getting more from less mean in the forestry context?

  • It means restoring health to local forests by logging fewer trees and doing a smarter job reforesting what has been logged.
  • It means capturing the full value of what is logged and putting an end to leaving massive amounts of usable wood behind at logging sites.
  • It also likely means running far fewer logs through many local mills and ensuring that whenever logs are processed that they are taken as far up the value chain as possible. An example is taking lumber from a sawmill and then recutting it and assembling it into higher-value finished products such as window frames and doors.
  • And for communities it means creating conditions that will strengthen their ability to control outcomes in the forests around them and to maximize benefits at the local or regional level.

The smartest investment choices for local communities and regions will be those that place a premium on getting more from less.

Given everything that is at stake for our forests and rural communities, British Columbians deserve a clear, unambiguous plan from the provincial government that lays out how it intends to reinvigorate our neglected forest sector. A credible plan must align with the reality of Indigenous rights and title. To stimulate a much needed public policy discussion leading up to the provincial election and to help realize the over 20,000 forestry jobs we identified in earlier research  here are ten propositions to consider:

1) Launch a rapid, comprehensive review of logging rates across BC, and reset logging rates in all regions to sustainable levels.

Healthy, resilient forests are the foundation for healthy, resilient rural communities. Currently, logging rates deplete forests far faster than they are restored.

In the Prince George timber supply area, the largest in BC, logging rates are running far in excess of what can be sustained. According to a recent provincial government timber supply analysis by senior Ministry of Forests, Lands and Natural Resources staff, those rates may have to halved in just three years.

Throughout much of BC’s interior, declines of a similar magnitude are likely because of years of escalated logging in response to the mountain pine beetle. Any credible transition strategy for BC’s forest industry requires an up-to-date inventory of how healthy our forests are. Only with reset, realistic logging rates can communities plan for the future.

As logging rates decline, we must then be ready with a robust plan to get more jobs per tree logged.

2) Publish a comprehensive, up-to-date analysis of where trees logged in the province are processed.

Communities across BC face the tough reality that their forests are often logged to provide benefits to distant regions or even other countries.

Logs from the forests around Mackenzie, for example, are frequently transported south to mills in the Quesnel area, 300-plus kilometres away. With drastic declines in logging rates anticipated in the adjacent Prince George district, the fear in Mackenzie is that local forests will be mined even more for the benefit of others.

A comprehensive “fibre-flow” analysis is essential to allow BC communities to have meaningful discussions with one other about sharing the benefits of publicly owned resources, and to understand in doing so that there will have to be trade-offs.

Economics dictate that investments in new mills won’t be possible in every community. But forest products can be moved from community to community with value added along the way. A comprehensive fibre-flow analysis offers some hope of developing broader regional development strategies aimed at sharing the wealth derived from limited forest resources.

3) Empower local communities and regions to have a more direct say in forestry decisions through the creation of new regional management boards.

Former provincial Minister of Forests, Bob Williams, is an advocate of empowering local communities and regions through the creation of new regional management boards. He is not alone in thinking that communities themselves need to be more directly involved in fundamentally important decisions such as logging rates. Communities also have significant interests in maintaining and enhancing forests for a variety of reasons well beyond just the number of trees cut and local forest industry jobs created.

For example, local forests ideally need to be managed to enhance community health and safety, especially in the face of wildfires. Local forests also play a vital role in protecting community water supplies, and they can provide important social and economic opportunities in terms of recreational value. For example, local trail networks offer significant opportunities for local residents and tourists to hike, bike or ski in wilderness or semi-wilderness settings.

A few BC communities have a more direct say in forest management because lands were turned over to their management decades ago through arrangements with the provincial government. But communities like Mission and Revelstoke, which hold their own tree farm licences, are the exceptions to the rule.

Communities like Mission and Revelstoke, which hold their own tree farm licences, are the exceptions to the rule.

As a first step toward ensuring greater community participation in forest management decisions, the provincial government should create new regional management boards for Vancouver Island, Haida Gwaii, BC’s mid and north coasts as well as one each in the Prince George/Omineca, Peace, Cariboo, Chilctotin, Thompson Nicola, Okanagan and Kootenay regions. First Nations co-management of the boards would be a prerequisite. Provincial government staff would be required to work directly with boards as key decisions around local logging and reforestation, protected areas, water quality and watershed conservation and wildfire mitigation plans were developed.

Funding for regional boards could be covered by increases in minimum stumpage rates and an additional portion of the overall stumpage revenues collected by the province.

4) Award long-term, secure, area-based forest tenures directly to First Nations.

The BC government has taken small steps toward awarding time-limited opportunities to First Nations to log modest amounts of timber. But the opportunities have never been substantial enough to provide tangible economic benefits to First Nations communities or to lay the groundwork for investments that would provide longer-term, more-secure forestry jobs. Such opportunities have also typically ignored two glaringly obvious points: the important legal rights and title victories that First Nations have won before courts and tribunals, and the appalling lack of economic opportunities in many First Nation communities. As a society we can, and must do better. Let’s start by awarding new licenses to First Nations that provide unambiguous management rights to defined areas of traditional territory and that set the stage for First Nations to partner in meaningful ways with forest product manufacturers.

5) Increase the minimum payments that companies make to the provincial government for trees logged on publicly owned lands. Transfer the additional revenues to new regional forest management boards.

The minimum amount that logging companies pay the provincial government for trees logged on public lands is 25 cents a cubic metre. This lowest “stumpage” payment has remained fixed in BC for decades and is long overdue for an increase.

A cubic metre equals roughly one telephone pole’s worth of wood. Typically, a loaded logging truck carries 40 cubic metres of logs. In 2016, logging companies paid the province the minimum stumpage payment on more than 21.2 million cubic metres of logs – one third of everything logged that year. That is enough wood to fill a line of logging trucks bumper to bumper from Vancouver to Halifax and almost all the way back again. The return to British Columbians for all of that wood was only $5.3 million.

A review of minimum stumpage payments is important for all British Columbians, but particularly for those in rural communities. A higher minimum stumpage rate, coupled with a more transparent pricing scheme, would also blunt arguments by the U.S. softwood lumber lobby that BC and other Canadian provinces undervalue their forest resources and therefore subsidize the logging industry.

6) Immediately launch a province-wide “competition review” to determine whether current rates of corporate concentration are acceptable.

Currently, 10 companies control more than two thirds (68 per cent) of all allocated timber supplies in the province. Corporate concentration is even more evident when one looks at how a few companies dominate key sectors of the industry. For example, in the interior of the province three companies – Canadian Forest Products, West Fraser Mills and Tolko Industries Ltd. – control 61 per cent of the output from all large sawmills.

Currently, 10 companies control more than two thirds (68 per cent) of all allocated timber supplies in the province. 

If after review the level of concentration is deemed to be too high, then the government should take back a portion of the cut and reallocate it to promote new investments in higher-value forest products.

7) Begin an immediate phase-out of all exports of raw, unprocessed logs from BC.

In 2016, nearly 6.3 million cubic metres of raw logs were shipped from BC. Had those logs been processed in the province, a conservatively estimated 3,600 more men and women could have been employed in our domestic forest industry.

The province should immediately enact a three-point plan recently endorsed by forest industry union and environmental organizations that calls for:

  • An immediate ban on all exports of raw, unprocessed logs from old-growth forests.
  • A steady increase in taxes on all raw, unprocessed logs originating from second-growth forests. Halting these exports could induce new investments in mills that process smaller second-growth logs.
  • New incentives to encourage more value-added forest product manufacturing in BC.

8) Create new regional log markets to generate new forest industry jobs and encourage more local and regional wood-product manufacturing.

The stumpage fees that most BC logging companies pay are determined before the trees are even logged. This differs from an approach where trees are logged and the logs are delivered to centralized points for sorting. In sorting, logs are grouped by species and grades. Cedar logs are separated from fir logs, for example, and higher-value logs are separated from their lower-value counterparts.

Sorting lays the groundwork for higher returns because prospective buyers see exactly what they are bidding on and can make informed choices about how best to use the logs.

The BC government has not encouraged widespread creation of such markets, however, even though a log sorting and marketing venture that provincial Ministry of Forests personnel helped run in the early 1990s near Vernon recorded many successes.

Regional log markets would create new jobs at log yards – jobs sorting, grading and marketing logs. They might also lead to new local value-added manufacturing jobs or stabilize existing value-added businesses because local manufacturers operating near log markets would have a competitive advantage over businesses further away. The increased revenues generated at log markets could be earmarked for immediate reinvestment in local reforestation efforts, providing an important new source of funding for such work.

The minimum amount that logging companies pay the provincial government for trees logged on public lands is 25 cents a cubic metre. 

9) Enact new “social contract” rules requiring minimum levels of manufacturing for companies holding long-term logging licenses.

In 2003, the provincial government formally scrapped provisions requiring companies to operate local mills in exchange for rights to log trees in local forests. The so-called “appurtenancy” provisions were a hallmark of provincial forest legislation for decades and were key to mills being established in various communities across BC.

The abandonment of those provisions allowed companies to close mills without fear of reprisal. Today, the end result is that some companies are logging regional forests while operating no mills at all. In the most extreme cases, companies are not logging either. They are simply holding onto the forest assets granted to them by the province as a kind of hedge against future market swings.

Canfor’s presence in the Fort Nelson area in northeast BC is one such example. The company has rights to log a vast swath of forest in the region. Yet, a huge local panel mill has remained idle for years and Canfor shows no sign of reopening the plant or doing any logging either. For Canfor’s shareholders, there may not be a business case for doing anything in the vicinity. However, another company, the community of Fort Nelson itself, the local First Nation or others may have different ideas, but they are denied the chance to try them because Canfor continues to hold the rights to log local forests.

The local Regional District has decried the company’s actions and asked for Canfor’s forest tenure to be reassigned, but the province has refused to do so.

The provincial government, in collaboration with local and regional governments, should immediately devise a new form of appurtenancy. Otherwise, the door is wide open for companies to simply speculate by holding onto licenses without providing local jobs. They can also move more logs between regions to the detriment of local communities and export raw logs out of the province.

10) Encourage more higher-value forest product manufacturing through new “partnership” timber sales.

Value-added producers don’t, as a rule, need access to trees. They need access to partially manufactured wood products that they turn into higher-value products like doors, window frames, panels and other building components. To encourage more such production, the Province should take a portion of timber now sold by competitive bid through the BC Timber Sales program and earmark it for new “partnership” sales. Primary lumber producers could bid on timber through the program, but only after demonstrating that they have entered into a sales relationship with a secondary or value-added producer. There is historic precedent for this in “bid proposal” sales that used to be advertised through the former Small Business Forest Enterprise Program.

Learn more about our ideas for a bold and progressive BC jobs agenda »

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