2000/01 Annual Performance Report Table of Contents
 

 

 

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The Forest Sector in 2000/01

The Ministry of Forests

The Ministry of Forests’ mission is to manage and conserve the province’s forest and range resources in a manner that balances economic, ecological and social benefits for British Columbians. Since its establishment in 1912 as the Forests Branch, the ministry, which is also known as the Forest Service, has been the main agency responsible for stewardship of the province’s rich and diverse forest resources. In respecting and caring for public forest and range lands, ministry staff are guided by the ethics of sustainable use, stewardship and public service.

Managing the provincial forest in B.C. presents a unique and complex set of challenges. More than 90 per cent of B.C.’s forest lands are publicly owned, which means that the provincial government, on behalf of the public, plays a much more prominent role in the forest sector than its counterparts do in other forestry jurisdictions.

While fulfilling the challenging job of balancing the demands made on B.C.’s forests and range lands, the ministry manages the provincial forest for a variety of values, including timber, drinking water, fish habitat, recreation, cultural values, forage, wildlife and biodiversity. Less than half of the 49 million hectares of productive forest land in the province is presently considered suitable and available for timber harvesting. Each year, less than 1 per cent of the suitable and available Crown forest is actually harvested, and by law, virtually all areas of Crown land that are logged must be reforested with indigenous commercial tree species.

The ministry pursues its mandate for sustainable forest management in a consultative manner with the public, industry, and other Crown agencies, while recognizing the unique role of aboriginal peoples. In this way, the ministry works to earn the public’s trust as staff make the day-to-day decisions which ensure that all British Columbians can look forward to healthy forests and a strong forest economy now and in future.

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Quick Facts

Total land area in B.C.:
94.8 million hectares (ha)
Table 4

Crown lands administered by the Ministry of Forests:
81.9 million ha

Productive forest land area:
48.8 million ha

Source: Updated from the 1994 Forest, Range and Recreation Resource Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

Quick Facts

Ministry of Forests Revenues
2000/01: $1.3 billion
1999/00: $1.6 billion
Table 1

Expenditures
2000/01: $556.2 million
1999/00: $491.1 million
Table 2

Environmental Scan

During 2000/01, forest management grew even more complex, as social and economic changes continued to affect forest and range land-use planning and decision-making. There were signs of sectoral recovery, but the industry still struggled with change in international markets and with increased competition. In North America, the Canada/U.S. Softwood Lumber Agreement expired on March 31, 2001.

Challenges

Some of the challenges faced by the ministry in 2000/01 were ongoing; others were recent developments. Some originated across the globe; others arose in B.C.’s forests. They included:
continued structural changes (e.g., mill shutdowns and closures) within the provincial industry,
quota allocation restrictions under the Canada/U.S. Softwood Lumber Agreement, and uncertainty over what will follow the expiration of the agreement on March 31, 2001,
increasing international market campaigns by non-government organizations looking to create international pressure on the government and industry to strengthen forest practices or protect certain areas,
third-party forest certification as an emerging requirement for market access,
increased competition from other forestry jurisdictions, including new sources of supply (e.g., from plantation forests), alternative products, and products made with new technology,
slow recovery of Asian economies and markets,
the ongoing need for industry to reduce costs or keep them as low as possible,
forest health issues related to widespread bark beetle infestations,
development and implementation of new strategic land-use plans, and
uncertainty over land use because of ongoing First Nations treaty issues.

Opportunities

During 2000/01, the ministry responded to those challenges in a number of ways, including:
providing technical support to the federal government to counter U.S. Customs reclassifications, recommending that the federal government increase bonus softwood quotas to address hardships and inequities in B.C., and preparing for the end of the Canada/U.S. Softwood Lumber Agreement,
establishing a Trade and Sustainable Development Group to handle forest certification issues,
moving the Small Business Forest Enterprise Program toward eco-certification by developing and implementing an Environmental Management System,
introducing, as a pilot program, a series of changes to the Coastal stumpage system to ensure that it is more equitable for all licensees, regardless of their size, and that the public’s revenue from the resource is protected,
amending three major provincial acts and two major regulations to reduce costs while promoting the sustainable use of forests,
providing technical support for the development of Land and Resource Management Plans and higher-level plans,
working with the industry on more than 800 cost-saving measures and launching a new market pricing system for small-business timber,
introducing new legislation to facilitate results-based Forest Practices Code projects and enforcing the code,
promoting an extensive Research Program in support of sustainability,
helping the forest industry identify new ways to diversify and strengthen itself, by providing affordable wood to the value-added sector, increasing opportunities for small-scale harvesters, testing innovative forest practices, and introducing pilot community forest tenures to involve more stakeholders in forest management,
contributing to Canada’s international sustainability commitments, safeguarding B.C.’s timber and range resources from fire and pests, regulating forest practices on some private lands, and
working with First Nations to advance economic opportunities for aboriginal people in the forest sector, and in resolving pre-treaty and treaty forestry issues.
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Commercial Timber Harvesting

Each year, less than half of 1 per cent of the total productive provincial forest is harvested (see figure below). Managed, operable timber lands make up about half of the entire productive forest land in B.C., or about one-quarter of the entire provincial land base. Planning processes consider, assess and compare all values of an area before timber harvesting is permitted. And by law, all harvested areas on Crown lands must be reforested.

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Quick Facts

Total B.C. forest industry shipments
2000: $20.2 billion
1999: $18.6 billion

Average U.S. West Coast price of standard newsprint
2000: US$565/tonne
1999: US$513/tonne

Volume of all products billed
2000/01: 77.4 million m3
1999/00: 79.7 million m3

The Forest Economy

The British Columbia forest products industry experienced mixed economic conditions in 2000: pulp and newsprint prices improved, while North American lumber prices fell throughout the year. According to estimates prepared by the accounting firm PricewaterhouseCoopers, the industry recorded net earnings of approximately $750 million in 2000, compared to net earnings of $923 million in 1999. (The 1999 net earnings were comprised of $971 million in operating earnings and a loss of $48 million from non-operating items. A similar breakdown is not yet available for 2000.)

Forest industry shipments during 2000 were $20.2 billion, up 8.6 per cent from 1999. This represented about 50 per cent of the value of all shipments by manufacturing industries in B.C. Forest product exports in 2000 totalled $16.3 billion and accounted for about half of total provincial goods exported to international markets.

Direct employment, according to Statistics Canada’s Survey of Employment, Payroll and Hours (SEPH), averaged 90,500 in 2000, up from 85,700 in 1999.

Lumber

British Columbia’s lumber production in 2000 was 13.6 billion board feet, up 1 per cent from 1999.

North American demand for lumber was strong in 2000. Housing starts in the United States were down 4.4 per cent from 1999, but they remained high, at 1.59 million units. Canadian housing starts rose a marginal 1.1 per cent, to 151,700 units in 2000. Japanese housing starts were also marginally higher, up 1.2 per cent to 1.23 million units.

Despite continued strong North American lumber demand in 2000, an oversupply of lumber drove the price of the bellwether indicator, spruce-pine-fir (SPF) 2x4s, to a low of US$177 per thousand board feet by December 2000. That was down 60 per cent from the high of US$438 reached in July of 1999. The annual average price of SPF 2x4s was US$255 in 2000, down from US$342 the year before.

Lumber producers located on the B.C. coast again faced difficult conditions in 2000, as uncertainty surrounding the new Japanese building codes (introduced on June 1, 2000) reduced demand for green lumber in Japan, the main Coastal market. Despite supply curtailments, the price of the key Coastal lumber product, hemlock baby squares, decreased to US$574 per thousand board feet in 2000 from US$586 in 1999. While this represented only a marginal drop in price, it was far lower than the US$819 per thousand board feet price in 1997. The Canada/U.S. Softwood Lumber Agreement, in its fifth year in 2000, restricted Coastal producers’ ability to divert lumber shipments to the U.S. market.

Lumber remained B.C.’s main export commodity. In 2000, $6.8 billion worth of lumber was exported internationally, down 6.4 per cent from 1999. The U.S. remained the main market for B.C. lumber, despite exports dropping 12 per cent to $4.6 billion. Exports to Japan, the largest offshore market, rose 5.1 per cent, to $1.64 billion in 2000. Exports to the European Union totalled $304 million in 2000, up 12 per cent over 1999.

Market Pulp

B.C.’s 2000 shipments of market chemical paper-grade pulp were up 6.4 per cent from 1999, at 4.3 million tonnes. Pulp exports from B.C. totalled $4.5 billion in 2000, an increase of 36 per cent from 1999, due mainly to higher prices. The average price of northern bleached softwood kraft (NBSK) pulp in 2000 was US$681 per tonne, up from the 1999 average of US$524.

Newsprint

B.C.’s newsprint production totalled 1.43 million tonnes in 2000, up 3.6 per cent from 1999. Newsprint exports from B.C. fell to $725 million in 2000, down 3.8 per cent from the year before. The average U.S. West Coast price of standard newsprint increased to US$565 per tonne in 2000, from US$513 per tonne in 1999.

Structural Panels

Plywood production in British Columbia was 1.7 billion square feet (3/8-inch or 9.5-millimetre basis) in 2000, essentially unchanged from 1999. The total value of plywood exports from B.C. was $225 million in 2000, down from $267 million in 1999. Plywood and oriented strandboard (OSB) continued to compete for market share in 2000, and OSB continued to gain acceptance. The average price for 3/8-inch (9.5-millimetre) Canadian softwood plywood was $371 per thousand square feet in 2000, down 15 per cent from the year before. The 2000 average price for 7/16-inch (11.1-millimetre) OSB was $306 per thousand square feet, down 21 per cent from 1999.

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