Financial State of the Forest Industry and Delivered Wood Cost Drivers

[Table of Contents]

Appendix B
Analysis Of Cost Driver Impacts


Definitions of the abbreviations used in these tables

NON-CODE-RELATED COST DRIVERS:

Price and rate increases
Increases in labour costs, power and fuel prices, insurance costs, equipment prices and the cost of supplies

Land use issues
RLPRegional level planning impacts (e.g., CORE, LRMPs)
PASArea designations that have excluded timber harvesting (PAS, Parks)
SIASpecial Issue Areas (e.g., Clayoquot Sound, Spotted Owls, other deferrals)

Non-code regulation
PTProperty tax increases (TFL private lands, managed forest land)
CRChanges in contracting regulations
WCBWorker safety/increases in WCB assessments
WMChanges in waste management requirements and other environmental regulations
PCImpact of pre-Code guidelines (e.g., CFFG, local harvesting guidelines)

Tenure administration
TSRTimber Supply Review and AAC determinations
CAChart Areas and Planning Cell allocations (local quota areas)
CCCut control regulations

Items under company control
UTILChanges in wood utilization levels
STUStumpage, royalty and rent increases
BDBusiness decisionsóchoosing to incur costs in order to optimize operations
HLImpact of historical level of harvesting in an area (distribution and quality of remaining timber)

Other
FNImpact of First Nations issues (access problems, joint ventures, training)
GMGlobal market influences (global demand for different products, sustainable forestry certification, etc.)
WSImpact of work stoppages (labour problems, fire, rain and snowfall closures)
ONCOther non-Code-related cost drivers

CODE-RELATED COST DRIVERS:

Planning and administration
IPRIncreased planning requirements
ADMAdministrative delays in the approval process
C&EThe penalty systems component of the FPC which has resulted in a cautious, conservative approach to problems and situations
MSDifferences among regions and districts in MoF and MELP management systems and Code implementation (e.g., district-specific standards which may exceed regulatory requirements)

Forest Practices
VQOVisual quality objectives
GUGreen-up and adjacency requirements
ROCRate of cut restrictions (e.g., ECA restrictions in watersheds)
FENOld growth and mature reserves (e.g., Forest Ecosystem Networks)
IWManaging for special or "identified" wildlife habitat requirements
SCSoil conservation requirements (e.g., slope stability, geotechnical assessments, gully management, soil disturbance levels, required changes in harvesting equipment)
R&LRoad and landing requirements (e.g., road building, maintenance and deactivation)
WTRWildlife tree requirements
RMARiparian reserve and management zone requirements
CBSCut block size requirements
PROTProtection requirements (fire and forest health-insects and disease)
OCOther Code-related cost drivers


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