British Columbia overhauls forestry system
Date: 28-Mar-03
Country: CANADA
Author: Paul Willcocks
British Columbia, which has come under severe U.S. trade pressure for its softwood industry management, unveiled a plan to claw back 20 percent of the long-term tree-cutting tenures it granted to lumber firms.
The policy also drops historic job-protection rules that forced companies to harvest logs even when markets were poor and dictated which sawmills they had to use.
The government of the resource-rich province was so worried about protests by environmentalists or other critics that it unveiled the new policies at a private school in Metchosin, about 45 minutes outside the capital of Victoria - a location that was kept secret until reporters were bused to the site.
The changes are designed to make the timber pricing system more market-oriented, a move demanded by the United States in its long-standing battle with Canada over softwood shipments that it claims are unfairly subsidized.
"We need to demonstrate that we are setting a fair price for the resource," said Forests Minister Mike de Jong, adding that the changes will help the industry to be more competitive and innovative.
Like most Canadian provinces, British Columbia owns more more than 90 percent of its forests and leases cutting rights using a byzantine administrative system that includes long-term tenures and short-term licenses.
The United States alleges the systems allow Canadian mills to buy logs at below-market rates, and a U.S. timber industry group has demanded British Columbia use auctions to sell at least half its timber.
The province said this week it will buy back 20 percent of long-term tenure rights from forest companies. Some of that land will be allocated to First Nations and small producers to encourage economic development.
But most of the cutting rights will be sold in open auctions and the price will be used to determine the harvesting fees charged by government across the province for the remaining tenures.
Thirteen percent of the annual cutting rights are now sold via auctions, primarily to smaller logging firms.
De Jong said the province will spend C$200 million ($135 million) to compensate forest companies for the lost tenure, and establish a C$75 million trust fund to help forestry workers and contractors displaced by the changes.
MIXED REACTION TO NEW POLICIES
Jake Kerr, chairman and chief executive of Lignum Ltd., said C$200 million may not be enough to compensate companies for the loss of timberlands where they have already built roads and made other investments.
Kerr, whose privately held company operates in British Columbia's Interior region, supported the need for change and said he welcomed any policy that would help resolve the softwood dispute with the United States.
The Industrial, Wood and Allied Workers union blasted the changes, however. "I don't think auctions even make economic sense, but it sure as hell doesn't make sense for workers and comminutes," president Dave Haggard said.
Despite the the government's secretive location, and while guards managed to keep protesters at bay, one was able to get into the media briefing. Jessica Clogg of the Coalition for Sustainable Forests complained that ending log supply rules would hurt small logging towns by closing mills.
De Jong said jobs will be lost, especially in the province's coastal industry, but refused to provide any estimates of the number of mills that face closure.
The province will increase to 8 percent from 3 percent the amount of annual cutting rights available to native Indians who argue they are the historic owners of the province's resources.
Tom Happynook of the Huu-ay-aht First Nation said the band hopes to become a significant player in the industry and welcomes the chance to get more timber. "It at least allows us to get our foot in the door," he said.
(Additional reporting by Allan Dowd in Vancouver).
