Difficult terrain and lack of access to markets slowed the establishment of the province’s logging industry. For many years, domestic demand for lumber was easily satisfied by trees removed in the process of clearing land. The gold rushes of the late 1800s stimulated some short-lived demand for B.C. lumber, but the industry was limited to a small export market for spars and lumber. The main forestry issue facing the governments of the time was how to develop B.C.’s abundant, rugged and remote forests to build a stable and prosperous economy.
Early in the twentieth century, as timber was depleted in other regions of North America, B.C. became the new frontier of industrial forestry. Completion of the rail link to the prairies and eastern Canada and the development of a new sea route to Europe via the Panama Canal improved market access and attracted investors. Forests became the key to B.C.’s economic development. In the great timber-staking “rush” between 1903 and 1907, the rights to most of the accessible timber on the coast — over 15 000 licences covering 9 million hectares of Crown forest land — were granted to private interests.
The B.C. government, recognizing its responsibilities for both economic development and resource conservation, appointed a Royal Commission of Inquiry in 1909. Incorporating many of the commission’s recommendations, the first Forest Act was passed in 1912, introducing early conservation measures and establishing a provincial Department of Forestry. Conservation, as it was implemented in 1912, was concerned with the “full” use of the forest resource and with ensuring maximum benefits to society.
At this time, B.C.’s fledgling forest industry was still struggling to survive rugged operating conditions on the B.C. coast and volatile export markets for its products. British Columbia’s competitive advantage was due in part to low operating costs (resulting from low fees for timber harvesting) and high-quality old-growth Douglas-fir. The government was reluctant to impose any regulations that would jeopardize the industry’s shaky position. At the same time, it was reluctant to spend revenue on forest management, preferring to develop provincial infrastructure. The prevalent view at the time was that B.C.’s forests were still relatively abundant and that regulation and forest management could come later.
Therefore, the government relied on private sector investment to develop B.C.’s forests while retaining Crown ownership as a conservation measure. The industry was granted rights to timber without risking capital investment, and as landowner the government kept the authority to regulate forest use on behalf of the public. The private sector and the government became partners in the management of B.C.’s forests.
Forest policy in the 1920s and 1930s was primarily concerned with fire suppression to protect timber (now considered a valuable asset), inventorying the timber resource to build up the knowledge needed for forest management, and collecting revenue to capture the full value of the resource and to benefit society. Harvest rates were not regulated, reforestation was not funded, and efficient utilization of wood was not required. It was a boom time for the industry as technological innovations such as the steam donkey, cable yarding systems and logging railroads made harvesting possible in areas previously considered inaccessible.
By the late 1930s, the chief forester of the Department of Forestry cautioned the government against the dire consequences of continuing the unregulated logging of previous decades. He emphasized the economic importance of B.C.’s forests and the need to manage them wisely to avoid future timber supply deficits. By this time, the industry was firmly established and he urged the government to implement the conservation measures recommended 30 years before by the 1909 Royal Commission of Inquiry.
The development of the forest sector up until 1940 is a story of rugged terrain, remoteness and volatile export markets. The history of the industry during this period is of concentration of harvesting rights, capital investment and market development. The government supported the development and concentration of the industry by not imposing costly regulations and by permitting timber licences to be transferable.
These two forces — concern for timber shortages and industrial demand for more timber — prompted the government to appoint a second Royal Commission of Inquiry in 1943. Following commission recommendations, in 1947 a policy of “sustained yield forestry” was introduced in British Columbia. Sustained yield was defined as “a perpetual yield of wood of commercially usable quality from regional areas in yearly or periodic quantities of equal or increasing volume.”[198] Under a sustained yield policy, the slow-growing over-mature forest would be converted to a fast-growing “normal forest” of approximately equally proportioned age classes. The regenerated forest would be managed on a continuous crop rotation basis to produce a perpetual supply of wood at the most efficient rate possible; harvest and growth would be balanced in the long term. The notion of sustainability embodied in the sustained yield policy was the efficient and stable production of timber.
The Forest Act was amended in 1947, and two key policy mechanisms were introduced to implement sustained yield: regulation of harvest rate and long-term exclusive forest management licences.
Harvests were regulated to ensure an orderly restructuring of forest age classes and to guard against harvesting the old-growth timber too quickly. To avoid timber supply deficits, mature timber would be rationed over the period it would take the second crop to regrow. A formula for calculating the appropriate harvest rate to achieve sustained yield was adopted. It divided a volume estimate of accessible mature timber by the expected rotation age of the next crop, and then added the volume increment or growth from the presently immature trees. The number was formally approved by the chief forester and became the upper limit of wood that could be harvested in any one year — the allowable annual cut (AAC). Cut control was also instituted to penalize companies who either exceeded their AAC (overcut) or did not harvest the full amount allotted to them (undercut).
Additional Crown timber was made available to the industry through long-term, exclusive forest management agreements (later renamed tree farm licences or TFLs) in exchange for private sector investment in manufacturing facilities and commitment to forest management. The government retained ownership and ultimate control to regulate harvest rates and forest practices, while the industry acquired the additional security and timber supply needed to risk investment in sawmills and pulp mills. Regulation to efficiently reorder the age-class structure of the forest and incentives to attract large investment were the key mechanisms of the sustained yield policy to achieve community and economic stability.
The 1950s and 1960s were decades of expansion for B.C.’s forest industry, especially into the Interior. Technological advancements, improvements in utilization and operating efficiency continued to expand the economic margin of operability, and AACs continued to increase into the 1970s. During this period the industry became more concentrated and vertically integrated, which resulted in B.C. forest products becoming more competitive in export markets. The government of the day allowed corporate concentration in order to generate increased employment and improved forest management. To complement this, public sustained yield units (PSYUs) were established on approximately 50% of the Crown forest, to make timber available to smaller operators through competitive sales.
