Ministry of Forests Annual Report 1995/96

Ministry of Forests Annual Report 1995/96 Table of Contents

Special Accounts-Statutory

The Ministry of Forests is involved on an ongoing basis with special initiatives and programs. Through funding and/or delivery of services, the ministry makes significant contributions to several programs through special statutory accounts.

Special Accounts-Statutory


Statutory authorities exist for several Special Accounts in which the Ministry of Forests has significant involvement, through funding, and/or the provision of services, personnel or materials. The Special Accounts include:

The reports that follow under the Special Accounts allocation are organized by these accounts.

Forest Stand Management Fund

This account was originally established as a fund by the Forest Stand Management Fund Act, 1986, and was changed to a Special Account under the Special Accounts Appropriation and Control Act, 1988. Revenue is provided by contributions from municipalities, the forest industry, forest sector unions, and others.

Expenditures provide for enhanced management of British Columbia's forest and range lands, and for related projects. No financing transactions are provided for under this account, and no reports are included.

Small Business Forest Enterprise Program (SBFEP)

This account was established in 1988 through an amendment to section 87.1 of the Forest Act. The account is designed to identify all revenues incidental to the operation of the SBFEP and to provide an ongoing source of funds to defray the costs of the program.

Revenue derives from upset and bonus stumpage, annual rents, trespass charges, scaling and registration fees, and sales of logs. Revenue in excess of current expenditures and future basic silviculture requirements is returned to the province's general revenue fund. In 1995/96, $137.5 million was returned. Expenditures are made for administration, logging road and bridge construction and maintenance, the costs of selling timber and logs, and basic silviculture to restock logged lands.

Qualified individuals and firms register in this program to purchase Crown timber from the province. Market loggers make up the majority of registrants.

The SBFEP's main objectives are to provide opportunities for existing and new businesses in the forest industry, to promote diversification and jobs, to support competition and profit, and to encourage sound, integrated forest management throughout the province. The SBFEP also provides opportunities for a considerable number of private-sector contractors who construct roads, reforest land, measure and protect the timber resource, and assist in planning forest management activities.

1995/96 Highlights

The volume of timber available for sale to loggers and sawmillers under the program declined slightly in 1995/96. Demand for timber sales decreased as a result of a rapid decline in market log prices and major tenure-holder demand linked to the falling pulp market. In addition, costs for sale preparation continued to increase, slowing production of development activities. A lack of ready-to-sell timber inventories precluded management actions to bolster sales in the face of lower production. As a result, less volume was sold than forecasted.

Bid proposal sales

These sales are designed to encourage and promote value-added manufacturing, and they received strong interest during 1995/96. The ministry awarded 41 bid proposal sales, providing approximately 2.0 million cubic metres of timber to remanufacturers and specialty producers. This was an increase of 11 sales from 1994/95, and an increase of 100,000 cubic metres of timber.

Successful applicants in 1995/96 proposed $15.0 million in capital investments to create 370 new jobs and maintain 360 jobs. Compared to 1994/95, this was an increase in investment of $0.8 million.

Special bid proposal sales, designed to encourage small sawmills to provide lumber to remanufacturers, continued during 1995/96. The three sales that were sold provided approximately 31,000 cubic metres of timber. This was a decrease from 1994/95, when eight sales provided approximately 218,000 cubic metres of timber.


All forest lands on which timber has been harvested under the program will be reforested by the ministry. During 1995/96, silviculture activities were carried out by ministry staff under the SBFEP on 137,202 hectares-an increase from 129,770 hectares the year before. Silviculture achievements under the program are summarized in Table H-4.

Program management

The ministry assumes responsibility for the construction of main forest roads and bridges, for silviculture, and for other forest management requirements that are incidental to operations which yield small business revenue.

The program is managed on a self-financing basis. The SBFEP account receives all revenues, and is the source of funding for all program expenditures.

Modest demand for timber is antici-pated during 1996/97 due to weak pulp prices and the uncertainty over the introduction of the softwood lumber export quotas. In addition, demand for small business timber will be weaker because a number of the major licensees will be in the last year of their cut control period. Many of them will be in a shortfall position on licence harvest obligations, so to achieve their allowable annual cut obligations, it is expected that they will focus their harvest on their own timber rather than buy SBFEP timber.

South Moresby Implementation

In 1988, the governments of Canada and British Columbia signed an agreement to create the Gwaii Haanas/South Moresby National Park Reserve in the Queen Charlotte Islands (Haida Gwaii). The Forest Replacement and Forestry Compensation accounts were established by the South Moresby Implementation Account Act to offset the effects of removing an estimated 147,000 hectares of provincial forest from the timber-producing land base.

South Moresby Forest Replacement Account

The South Moresby Forest Replacement Account (SMFRA) was created to help offset the reduction in timber supply and the associated loss of forestry jobs that resulted from the creation of the park reserve, by improving forest productivity elsewhere in the Queen Charlottes, and restoring forest-sector employment through enhanced forest management projects.

To establish the fund, the governments of Canada and British Columbia each contributed $12 million to an interest-bearing account that is administered by a joint management committee. Staff at the Queen Charlotte Islands Forest District coordinate and administer activities, so that the program is sensitive to the needs of the local communities and the Islands' forests.

The original term of SMFRA was eight years, with an option to extend the term for up to four more years. In September 1994, the Ministry of Forests and Natural Resources Canada approved a four-year extension, to March 31, 2000. Currently, options are being investigated to extend the term of the SMFRA beyond the year 2000. While these investigations proceed, the management committee continues to set annual budgets for SMFRA based on interest accrued on the Special Account.

Expenditures from the account must be incremental to regular government funding, and, since 1990/91, must support projects located on or developed specifically for the Queen Charlotte Islands. Projects funded under SMFRA fall into one of three basic components: operational forestry enhancement, research and demonstration, or communications.

Projects can be undertaken on any productive land in the Queen Charlottes that is committed to long-term forest management. Projects located on private, First Nations, municipal, or federal lands are also eligible for funding under the SMFRA. Priority for operational forestry enhancement is given to those projects and treatments that provide the best combination of increased timber productivity and employment.

1995/96 Highlights

Silviculture accomplishments during the 1995/96 fiscal year concentrated on juvenile spacing and pruning. In total, 374 hectares were spaced, and 107 hectares pruned, creating combined direct employment of 8.7 person-years. Forest health projects were conducted in cooperation with the Canadian Forest Service to monitor and appraise several different types of pest problems.

Inventory work provides the information necessary for making balanced resource management decisions. Activities in 1995/96 concentrated on completing the field data collection for the development of volume and decay curves specific to the Queen Charlotte Islands. These curves will improve the accuracy of timber supply forecasting on the Islands. Research projects covered a variety of subjects.

The major communications project for 1995/96 was the completion of an independent review of SMFRA accomplishments and program direction since the Special Account was established. The report found that the SMFRA program is being used in a positive manner to help offset the local economic benefits lost to the Queen Charlotte Islands inhabitants because of reduced timber supply and employment caused by creation of the South Moresby Park.

Direct employment generated by the SMFRA in 1995/96 is estimated at approximately 11 person-years, and estimated total employment at 21 person-years. (Total employment includes indirect employment through business sectors such as the service industry.)

The majority of the SMFRA budget for 1996/97 will be allocated to operational silviculture activities. This approach optimizes direct employment opportunities through SMFRA, while improving the quality and value of the timber in the second-growth forests of the Islands. Particular emphasis will be placed on refocusing and updating the strategic plan for the combined research and inventory components.

South Moresby Forestry Compensation Account

This account was established to provide for the acquisition of third-party forest interests (who held forest tenures) associated with the establishment of the South Moresby National Park Reserve. The account is administered by a joint federal/ provincial committee.

The compensation settlement issue with MacMillan Bloedel Limited, the final claimant, was still before the courts in 1995/96. Ongoing court costs are being incurred under this Special Account until the case is settled.

Forest Worker Development Program

The Forest Worker Development Program (FWDP) was established in 1993/94 by the Build BC Act as a joint project by the Ministry of Skills, Training and Labour, the Ministry of Forests and BC21. The primary objective of the program was to train and employ income assistance recipients and other employment-disadvantaged people in a range of forest management activities.

BC21 withdrew after the first two years, and the ministries continued the program for 1995/96. The program was phased out in 1995/96, ending on March 31, 1996.

The FWDP was designed to develop basic forestry skills at an Entry Level, and advanced skills at a Bridging Level, and to fully integrate participants into the regular work-force at the Local Contracting Level. The major activities undertaken were silviculture (brushing, spacing and pruning), and recreation site and trail maintenance all directly in line with regular goals of the Ministry of Forests.

Workers were trained under at least one of the activity areas, such as pruning, brushing and spacing, as well as in basic forestry, First Aid, fire fighting, job search techniques and other elective courses.

1995/96 Highlights

In the wrap-up year of the FWDP, a total of 40 crews, representing about 413 positions, completed 2,401 hectares of spacing, 870 hectares of pruning, and approximately 816 hectares of brushing. Other significant accomplishments included 365 hectares of forest health activities, 58 kilometres of recreation trail maintenance and development, and 65 kilometres of road maintenance and improvements. These activities generated 163 person-years of employment.

A program evaluation was also conducted in 1996. The evaluation found that participants in the program developed basic work skills, improved their work ethic, and developed basic work habits such as punctuality and regular attendance.

Most FWDP crews met their production goals with a quality of work comparable to regular forestry contracting crews. In addition, the work accomplished under the Forest Worker Development Program helped the Ministry of Forests achieve its larger program goals.

Forest Renewal BC

This Special Account was established in June 1994 by the BC Forest Renewal Act, which also created Forest Renewal BC. The Ministry of Forests delivered Forest Renewal BC programs during 1995/96, but does not fund the Special Account.

The Crown corporation was established to develop and implement an expenditure program based on the long-term investment strategy of the Forest Renewal Plan. Forest Renewal BC programs are designed to renew the forest economy of British Columbia, enhance the productive capacity and environmental value of forest lands, create jobs, provide training for forest workers, and strengthen communities.

Revenue for Forest Renewal BC expenditures comes from stumpage fees and royalties paid by companies to harvest timber on Crown land. The estimated $400 million per year is reinvested into the forest sector in five key activity areas: Land and Resources, Environment, Workforce, Communities, and Value-added. Direction for investment is given by activity area committees and a board of directors made up of all major forest-sector stakeholders: labor, industry, communities, government, First Nations, and environmental group members.

The Ministry of Forests, as chief steward of public forest and range lands in B.C., acts as one of Forest Renewal BC's delivery agents for activities and programs.

1995/96 Highlights

A total of 590 Forest Renewal BC projects were completed in silviculture (Enhanced Forestry Program), road and hillslope restoration (Watershed Restoration Program) inventory, research, and woodlot licence expansion during 1995/96.

Surveys, spacing and pruning under the Enhanced Forestry Program were completed on more than 91,000 hectares of Crown land (Table X-3). Activities in this program are designed to increase the productivity of the province's forests by investing in improved reforestation, stand tending, and forest health. The program also provides for forest worker training in new forest practices, and retraining for displaced forest workers.

More than 158 projects were completed, and more than 2,358 kilometres of old logging roads were assessed and deactivated under the Water-shed Restoration Program in 1995/96. This program, which is designed to accelerate the recovery of watersheds that have been adversely affected by past timber harvesting practices, is delivered in cooperation with the Ministry of Environment, Lands and Parks. The program offers community-based employment, training, and stewardship opportunities throughout the province through forest-sector job diversification.

In 1995/96, funding from Forest Renewal BC increased the ministry's capability to issue and manage woodlot licences and to provide extension services to small operators via private forestry consultants. During this year, 107 projects were completed under this program.

Twenty projects covering the development of databanks, maps, analytical tools and training materials were completed under the Resource Inventory Program in 1995/96. The main goals of the program are to support and improve forest resource planning and decision-making, and facilitate the integration of non-timber resource values.

During 1995/96, in partnership with universities, colleges, forest companies and other government agencies, the Ministry of Forests completed 99 research projects under the Land and Resources Research Program. Research was done in the areas of hardwood management, silvicultural systems, biodiversity and extension.

Details of Forest Renewal BC's activities are provided in the Forest Renewal BC 1995/96 Annual Report.

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