Encourage an efficient and world-competitive industry

The government recognizes the enormous challenges facing the forest sector.

In the past, forest policies assumed there would always be another valley to log. The goal was to develop the province and push the frontier out.

Today, British Columbia is no longer a frontier province. Clearly there are limits to our still substantial forest resource. The old policies no longer work.

The Forest Renewal Plan is a reflection of the government's commitment to facilitating a revitalization of the forest sector and maintaining it's continuing contribution to the province's economy.

The Plan is the product of extensive discussions with the Forest Sector Strategy Committee, a group of leaders from industry, labor, environment, communities, First Nations and government.

The Forest Sector Strategy Committee is now working on developing a long-term strategy for British Columbia's forest sector. It is expected that much of the committee's proposed strategy will be based on the tools of the Forest Renewal Plan.

On April 14, 1994, the premier announced the Forest Renewal Plan, an unprecedented partnership between the forest industry and its workers, environmental groups, First Nations, communities and government all working together to renew British Columbia's forests and forest industry.

The focus of the Forest Renewal Plan is to:

• give back to the forests through enhanced forestry;
  
• restore and protect the forest environment;
  
• assist in providing new skills and jobs for forest workers;
  
• get more jobs and value from every tree that is cut; and
  
• strengthen communities that rely on the forests.

A new partnership agency, Forest Renewal BC, was established with representatives from provincial government, industry, workers, communities, First Nations and environmental groups. Forest Renewal BC will invest up to $400 million annually from increased stumpage revenues that industry pays for trees harvested in public forests.

Forest Renewal BC will make substantial investments in improved reforestation and stand tending (e.g., thinning, spacing, pruning, and fertilization). As the chief steward of B.C.'s publicly owned forests, the Forest Service will work with Forest Renewal BC on both the overall strategy for silviculture investment and the operational, planning and monitoring support for individual projects, as required under the Forest Practices Code.

Current programs include expanding the provincial woodlot program, gathering more information on our forests through inventory programs and growth and yield analysis, and research and development to improve our forest resources.

In the partnership spirit of the Forest Renewal Plan, the Forest Service is developing new ways to work with all Forest Renewal Plan partners who have a stake in the province's forest sector.

Productive forest lands require healthy forest ecosystems. Forest Renewal BC is cleaning up environmental damage from past forestry practices. The Forest Service will continue to co-administer the Watershed Restoration Program for Forest Renewal BC with the Ministry of Environment, Lands and Parks. The Forest Service's primary role will be deactivating or rehabilitating logging roads that put streams and productive forest soil at risk. The Forest Service will also work with other Forest Renewal partners in gathering information and learning more about our forest ecosystem in order to enhance its productivity.

The Ministry of Forests will provide support to Forest Renewal BC and other agencies in training forest workers. An early priority is Forest Practices Code training.

The Forest Service will work with Forest Renewal BC and other economic development ministries to strengthen the economic base of forest communities and aboriginal groups throughout British Columbia.

Forest Renewal BC and the Forest Service will work together to double the woodlot licence program from about 500 licences currently to about 1,000 over the next three years. Woodlot licences grant small-scale foresters an area-based tenure with the exclusive right to harvest timber within its boundaries and generally consist of Crown and private land.

The expanded Woodlot Licence Program will encourage more landowners to bring parcels of private land into production. Up to 600 hectares of Crown land can be included in Interior woodlot licences, while coastal licences are a maximum of 400 hectares.

This goal relates primarily to expanding B.C.'s value-added sector. The Ministry of Forests will share its policy expertise with Forest Renewal BC as it takes steps to generate more jobs per cubic metre of harvest. In addition, the ministry has prime responsibility to implement policy changes under the Forest Renewal Plan to ensure that companies who are willing to do more with publicly owned timber have better access to that timber.

The Small Business Forest Enterprise Program (SBFEP) sells Crown timber to firms and individuals throughout the province. The SBFEP has been allocated approximately 13 per cent of the provincial allowable annual cut, or about 9.3 million cubic metres.

The program has four objectives:

• Opportunities: the program provides opportunities for individuals and firms in the forest industry to acquire timber for their operations, and for individuals and firms to enter the industry and establish new businesses.

• Diversification and employment: timber will be sold to promote and stimulate the production of specialty and high-value forest products, and to generate employment. The establishment of new sawmills will not be encouraged.

• Competition and profit: marketing timber through a competitive process ensures that the most efficient firms are awarded timber sales, and that the province receives a fair rate of return for the forest resource.

• Forest management: sound, integrated forest management will be demonstrated and encouraged throughout the province.

Competition for timber is brisk. There are approximately 2,250 firms and individuals currently registered in the SBFEP. Some 1,870 are registered in category 1 (loggers), and about 380 are registered in category 2 (wood products manufacturers).

Through the SBFEP, the Forest Service will sell about 50 million cubic metres of timber over the next five years (see Table 6). Under the SBFEP, timber is sold in two ways:

• competitive sales (Section 16 of the Forest Act); and
  
• bid proposal sales (Section 16.1 of the Forest Act).

Competitive sales are intended for market loggers and small sawmills, and are sold to the highest bidder. A lower limit price, called the upset price, is set. Interested parties tender an additional amount, called the bonus bid. The bidder with the highest bonus bid is awarded the sale.

These sales are usually for a term of one or two years. About 1,300 competitive sales, containing 7.4 million cubic metres, will be awarded during 1995/96.

Bid proposal sales are intended for lumber remanufacturers, and specialty-product manufacturers. Applicants submit a proposal for the further manufacturing of wood products, and proposals are evaluated to determine the value added by the applicant's manufacturing facility and process. The sales are normally awarded to the applicants with the best combination of bonus bid and value added.

These sales have terms ranging from one to ten years. During 1995/96, the Forest Service expects to award approximately 25 bid proposal sales, containing about 3.1 million cubic metres of timber.

Bid proposal sales continue to be an important aspect of the Small Business Forest Enterprise Program. As of December 31, 1994, a total of 195 bid proposal sales have been awarded since their inception in 1988. For various reasons, 12 sales have been cancelled or withdrawn. The remaining 183 sales represent 15.2 million cubic metres of timber, and have been awarded to 135 different firms and individuals.

In addition, a small volume of timber is sold directly, without competition, under Section 18 of the Forest Act. These sales address emergency situations, involve small volumes, and have short terms.

The small business program is managed on a self-financing basis through the Small Business Forest Enterprise Program Account. All revenues from SBFEP timber sales, including upset stumpage, bonus bids, annual rent, and registration fees, are credited to the account. All program costs, including timber cruising, road building, basic silviculture, administration and protection, are expended from the account. Sufficient funds are reserved in the account to offset all future reforestation costs.

Revenues in excess of current expenditures and the reserve for future reforestation costs are returned to the province's Consolidated Revenue Fund.

Each year, the SBFEP submits a business plan to Treasury Board for approval. The business plan for 1995/96 forecasts revenues of $473.0 million, and expenditures of $148.4 million, with the following budget:



The silviculture liability, for those areas harvested under the program, will increase from $111.2 million in 1995/96, to about $113.6 million in 1996/97, and decline to approximately $107.7 million in 1999/2000.

The Forest Service started a special project in selected areas of the province in 1993/94 to examine different silvicultural systems as an alternative to conventional clearcutting. Implemented under the SBFEP, the program also studies alternative ways of selling logs.

The Duncan/Port Alberni log market trial has sold over 40,000 cubic metres of timber, and will be completed in the spring of 1995. The Vernon trial has sold about 50,000 cubic metres, and expects to sell another 44,000 cubic metres in 1995/96. A third trial has been established in the Prince George Forest District and operations will commence in 1995/96, with 65,000 cubic metres being marketed.

The Forest Service contracted the logging of timber through the SBFEP, contracted log processing and sorting, and sold logs on the open market. Forest Service staff are responsible for timber development, and project administration.

The results of the Duncan/Port Alberni and Vernon trials will be reported in 1995/96.

The Forest Worker Development Program promotes local and regional development by training dislocated workers and disadvantaged people. Workers who have lost their jobs because of industry restructuring will be trained for new jobs managing the working forest. Aboriginal peoples, women, minorities and other disadvantaged groups will also have the opportunity to receive on-the-job training that will enable them to participate in employment opportunities within their communities.

The government recognizes its global responsibility as a forest manager of one of the larger temperate forests in the world.

The premier has made trips to the United States, Europe and the Far East to talk about the actions of the B.C. government to fulfil its global environmental responsibilities.

British Columbia is participating in the development of a national Biodiversity Strategy, which will help meet Canada's obligations under the international Biodiversity Convention. British Columbia is also supporting the National Forest Strategy, which addresses the majority of forestry-related commitments made by Canada at the Earth Summit in Rio. The National Forestry Strategy is a national effort to develop criteria and indicators for assessing sustainable forestry, and to develop a national sustainable forest products certification system.

British Columbia is demonstrating its commitment to these agreements through the Forest Practices Code, Protected Areas Strategy, Timber Supply Review, and Integrated Land Use Planning. The province will continue to support the federal government in its efforts to influence the international process on harmonization of criteria and indicators and certification schemes to define sustainable forest management. British Columbia met this objective at the recent United Nations Commission on Sustainable Development meeting where more than 100 nations and international bodies agreed to develop a global framework for defining sustainable forests.

The Forest Service has been very active in representing the province's interests in forest products trade. Misrepresentations of B.C.'s policies and stewardship initiatives could cause serious harm to the province's economy.

The province has worked closely with the federal government to address these issues. British Columbia participated actively in successful legal and administrative actions over Canadian softwood lumber exports to the United States. In addition, the Forest Service has worked closely with the International Relations section of the Executive Council Office to improve communication of British Columbia's policies and practices related to sustainable development internationally.