VANCOUVER – To create and support good jobs in British Columbia’s coastal forest sector, government is making policy changes to increase the processing of B.C. logs on the coast and to reduce wood waste by redirecting it to B.C.’s pulp and paper mills.

The changes, as part of the Coast Forest Sector Revitalization Initiative, were announced by Premier John Horgan at the annual Truck Loggers Association (TLA) convention. Government is taking steps to reverse a systemic decline that has taken place in the coast forest sector over most of the last two decades.

“We’re committed to rebuilding a strong and healthy coastal forest sector for British Columbians,” said Premier Horgan. “Through the forest policy reforms I’m announcing today, we will see more logs and fibre processed in B.C., supporting B.C. workers, their families and communities.”

The Coast Forest Sector Revitalization has five main goals:

• Rebuilding solid wood and secondary industries to ensure more B.C. logs and fibre are processed in B.C.

• Improving harvest performance to ensure more fibre is available for domestic mills, including the pulp and paper sector.

• Maintaining a credible auction system by taking steps to ensure bids on timber sale licences are independently made.

• Fostering stronger business-to-business relationships between BC Timber Sales, major licensees and First Nations.

• Restoring public confidence through amendments to the Forest and Range Practices Act and auditing the private managed forest land regime.

The goals will be implemented through a series of legislative, regulatory and policy changes over the next two years. The policy reforms were developed after engaging with a broad cross section of First Nations, industry and labour over the last six months. Engagement will continue over the next few months as some policy proposals are finalized.

“We can no longer apply yesterday’s thinking to today’s challenges,” said Doug Donaldson, Minister of Forests, Lands, Natural Resource Operations and Rural Development. “We need to shift our approach away from the status quo and create markets for waste fibre that, until now, has been left in harvest areas. We will continue to work with all forest-sector participants so together we can enjoy the benefits from a stronger coastal forest sector.”

Effective July 1, 2019, the fee charged for log exports will be revised to be based on harvest Office of the Premier Ministry of Forests, Lands, Natural Resource Operations and Rural Development economics. New criteria for log exports from certain geographic areas, based on local harvesting economics and subject to engagement and consultation with First Nations, will be developed.

Changes to waste policy are designed to redirect some of the approximately two million cubic metres of wood waste on the coast – or approximately enough wood waste to fill 800 Olympic sized swimming pools each year – to pulp and paper producers and the bio-products/bioenergy sector, supporting CleanBC’s renewed bioenergy strategy. A coastal fibre recovery zone will be established this spring, where penalties will apply for leaving waste in excess of new lower waste benchmarks in harvested areas. Over the next year, changes will be made to increase penalties for late reporting of waste.

To increase First Nations participation in the forest sector, and to directly receive their input at the beginning of the forest management process, BC Timber Sales will engage with interested First Nations and other licensees in collaborative, area-based planning. This will create efficiencies and better landscape-level planning and forest management.

BC Timber Sales will also work with interested First Nations and licensees in business arrangements that would see all parties sharing timber volume, expertise, and/or capital and all parties sharing decision-making and mutual benefits. BC Timber Sales will maintain its role of auctioning about 20% of the province’s allowable annual cut to support the market-based timber pricing system.

To increase public trust and confidence in forest-sector decision-making, this spring, the ministry will introduce amendments to the Forest and Range Practices Act to improve public input process and increase transparency. The ministry will review the effectiveness of the private managed forest land framework.

Coast forest-sector revitalization to reinvigorate B.C.’s forest sector supports the shared priority between government and the B.C. Green caucus, and is part of the Confidence and Supply Agreement.

Quotes:

David Elstone, executive director, Truck Loggers Association –

“The announcements made today by the Premier will fundamentally address growing concerns about forest management on the coast. As timber-harvesting contractors, we recognize change is required and that the industry needs certainty. We are hopeful the announced initiatives will support industry sustainability, and the TLA remains available to continue working with the Premier to meet the government’s objectives while the contractors’ concerns are heard.”

Robert Dennis, Chief Councillor, Huu-ay-aht First Nations –

“Huu-ay-aht First Nations, the B.C. government and our business partners share the same goals – revitalized coastal forestry and long-term reconciliation with First Nations. Today’s forestry policy announcements are an important step toward achievement of these twin goals. Huu-ayaht looks forward to further engagement with the B.C. government and our business partners to ensure implementation of these policies is a win/win/win.”

Dallas Smith, president, Nanwakolas Council –

“We’re pleased to see that this plan will address some of the major challenges forestry has on Vancouver Island and the coast. We look forward to working with government and industry to find better solutions to waste and increase value-added opportunities for the well-being of the region.”

Brian Baarda, chief executive officer, Paper Excellence –

“B.C. coastal pulp and paper mills are in urgent need of additional pulp fibre supply. We support changes to improve the availability of fibre supply and ways to reduce the costs of scaling and handling pulp logs. We look forward to working with First Nations and forest licensees to increase the fibre supply from Vancouver Island and the south coast for pulp mills and sawmills.”

Brian Brown, manager, fibre and log supply, Riverside Forest Products Inc. –

“We are pleased to see the government taking action on the forestry file. Increasing fibre availability is of immense importance for mills such as ours that are completely reliant on the open market for log purchases. Given that we operate a sizable remanufacturing plant, enhancing the opportunity for rough lumber to be processed into higher-grade items is a positive move. The increased opportunity for engagement of First Nations with industry is significant as we believe that partnerships are productive, whereas adversarial relationships are not. Ultimately, these actions are not unlike baking a cake. The right ingredients are in place and the cake is in the oven. We trust it will rise well and satisfy all.”

Brian Butler, president, United Steelworkers (USW) Local 1-1937 –

“The United Steelworkers are very pleased to see the provincial government take serious action to significantly reduce log exports, and make meaningful changes to spur on manufacturing investment through its coast revitalization process. The government’s requirements for more manufacturing of minimally processed lumber and lower waste benchmarks are important moves that, along with processing more logs in B.C., will create more jobs for British Columbians.

“The USW has been advocating for these and other changes for many years. Our members, and the communities they live in, stand to benefit in a big way from greater utilization of our working forest. The USW also supports the government’s engagement, inclusion and collaboration with First Nations. Their increased involvement will only make our industry stronger.”

Russ Cameron, president, Independent Wood Processors Association –

“This government recognizes the importance of obtaining the greatest possible socio-economic benefit per cubic metre harvested. The steps being taken will help B.C.’s value-added wood processors – family-owned and operated companies – access a share of the public’s resource for further processing within B.C.”

Hans de Visser, president, Coastland Wood Industries Ltd. –

“The policy changes in the Coast Forest Sector Revitalization Initiative are logical measures in areas of forest policy that needed a ‘reset.’ We welcome changes that should see more logs and fibre made available to independent mills like Coastland as well as pulp mills.”

Gary Fiege, president, Public and Private Workers of Canada –

“The Public and Private Workers of Canada applauds the government on implementing some of the changes identified during the Coast Forest Sector Revitalization process. These changes are an important first step in a journey that will see stabilization in an industry that, for years, has been wrought with uncertainty and neglect. This positive move is just the first of many that we believe need to be made to ensure our collective futures.

“For years, we have been lobbying for change in an industry that rural British Columbia relies heavily on. We see this move today as a way to use more of the fibre in our mills, thus giving them the economic stability required for reinvestment.“

“Involvement of First Nations as true partners in resource development is a key component to bringing equality to all peoples of British Columbia.“

“As with all things, ‘the devil is in the details’ and today’s announcement will be no different. We look forward to continuing working with all groups for the greater good of all British Columbians.”

Paul Sadler, general manager and chief executive officer, Nanaimo Forest Products, and cochair, B.C. Pulp and Paper Coalition –

“We are pleased that the Province is addressing the critical shortage of pulp fibre available on the southern B.C. coast and Vancouver Island for our pulp and paper mills. These policy changes are a big step in the right direction to bring out more pulp fibre that has been left as logging waste, to direct more volume into the sawmill industry, and to streamline the administrative burden on log deliveries. We look forward to working more closely with all the forest companies to ensure these objectives are met.”

Joie Warnock, western regional director, Unifor –

“Premier Horgan has prioritized sustainable job creation in B.C.’s forestry sector. We can, and should, do more with our forestry resources for the benefit of local communities.”

Quick Fact:

The coastal forest sector is an integral part of the B.C. economy. In 2017, it generated over 24,000 direct jobs and $3.1 billion in gross domestic product.

Two backgrounders follow.

Contacts:

Jen Holmwood, Deputy Communications Director Office of the Premier | 250 818-4881

Vivian Thomas, Communications Director Ministry of Forests, Lands, Natural Resource Operations and Rural Development | 778 974-5809

More domestic processing of logs and fibre

As part of Coast Forest Sector Revitalization, the government is rebuilding the solid wood and secondary industries by ensuring more logs and fibre are processed in B.C.

Manufactured Forest Products Regulation

This regulation, introduced in 2003, defines the criteria that products must meet to be considered manufactured under the Forest Act. However, too much minimally processed lumber is being exported and further manufactured in other jurisdictions. An example is lumber that is being exported to be dried and planed. The Province will be amending the regulation this spring to increase the opportunities for manufacturing in B.C.

Log exports – surplus test

The Forest Act, since it was introduced in 1912, has required the domestic manufacture of timber, but has included provisions for exemptions from that requirement. An exemption for logs can be obtained either through an order-in-council (OIC) or a ministerial order. The vast majority of logs are exported through the “surplus test” where potential exporters must first advertise the logs for domestic use. If there is no domestic buyer, then those logs are provided. an exemption. Should a domestic buyer put an offer on these logs, the Minister’s Timber Export Advisory Committee will determine if the offers reflect fair domestic market value and provide recommendations to the minister on each application regarding whether an exemption should be provided.

As part of the Coast Forest Sector Revitalization Initiative, the ministry will be revising the membership and terms of reference of the Timber Export Advisory Committee to include broader First Nations’ membership and to strengthen the review process.

Orders-in-council for exports of standing timber

Section 127 of the Forest Act allows exemptions from the manufacturing requirement. OICs can be established to allow a percentage of harvest from each licence within a geographic area to be exported without having to offer the logs to the domestic industry first. These OICs are in areas where there are few or no domestic manufacturing facilities and otherwise would be uneconomic to harvest. The following log export OICs are in effect throughout the province:

• Haida Gwaii – First came into effect in 1986, terminated in 1992, brought back into effect July 29, 2010, and expires July 31, 2019. It allows 35% of logs harvested by tenure to be exported (except cedar and cypress).

• Northwest Interior – Continuous since 2002 and expires July 31, 2019. It allows 20% of logs harvested by tenure to be exported (except cedar and cypress).

• North Coast district – Continuous since 2002, and expires July 31, 2019. It allows 20% of logs harvested by tenure to be exported (except cedar and cypress).

• Mid-Coast area – First came into effect in 1986, terminated in 1992, brought back in 2006, and expires July 31, 2019. It allows 35% of logs harvested by tenure to be exported (except cedar and cypress).

• Nass Timber Supply Area – First came into effect in 1985, and expires on July 31, 2019. It allows 100% of logs harvested to be exported.

As part of the Coast Forest Sector Revitalization Initiative, the ministry is engaging and consulting with First Nations and industry on new economic criteria to be used in developing OICs for areas that require limited log exports to support harvesting operations.

Fee-in-lieu

A “fee-in-lieu of manufacturing” is charged to log exporters. The fee is based on the species of log and its quality. A new fee structure based on harvest economics is being developed, which will come into effect summer 2019.

Other changes to log export policy include the need for log suppliers in the Northwest Interior to advertise logs for sale close to the harvested area to improve access for manufacturers; and changing the freight adjustment for the west coast of Vancouver Island.

Contact: Vivian Thomas, Communications Director Ministry of Forests, Lands, Natural Resource Operations and Rural Development | 778 974-5809

Reducing wood waste and making more fibre available

Some level of residual fibre being left in harvest areas is an inevitable byproduct of timber harvesting operations and can be beneficial to meet wildlife or environmental objectives.

However, some fibre is left in harvest areas because it is costly to remove and/or has limited economic value to the primary tenure holder. This latter category is referred to as “avoidable” waste fibre. Prior to 2003, avoidable waste fibre on the coast was less than 5% of the harvest volume at approximately 0.8 million cubic metres or less per year. By 2017, the waste increased to more than 16% of harvest volume at approximately two million cubic metres per year and, in some cutblocks, wasted fibre volumes are greater than the timber volume harvested.

The Coast Forest Sector Revitalization Initiative includes measures to enable greater harvest of the allowable annual cut, and a reduction in the amount of avoidable waste fibre by directing it to manufacturers, such as pulp and paper mills, that can use the fibre.

To reduce avoidable waste fibre, encourage better business-to-business relationships and increase fibre access to a broader range of manufacturers, a fibre recovery zone is being created in areas of Vancouver Island and the south coast where enhanced fibre recovery is economical. In this geographic area, significant penalties will be applied for any avoidable waste fibre left in harvest areas that exceeds the new lower waste benchmarks that are being introduced. The new benchmarks take into account fibre intentionally left for ecological or wildlife values.

To complement these changes, a new policy for scaling and pricing secondary products will be introduced to reduce the regulatory burden, allowing the removal of primary and residual fibre concurrently from harvest sites. The new procedure will help move more fibre to market instead of being left in harvest areas.

Additionally, as of April 1, 2019, the post-harvest appraisal reconciliation model, or PHARM, already in use in the Interior, will apply to cutting permits issued on the coast. Rather than the current system in place on the coast that uses pre-harvest estimates to determine stumpage rates, the PHARM model uses post-harvest information to capture the true cost of development and stumpage on actual timber harvested.

As well, to reduce specific targeting of cedar in hard-to-reach areas, the stumpage cost allowance for helicopter single-stem harvesting has been removed. This will encourage licensees to harvest either the whole cutblock or leave cedar stems for ecological, wildlife and visual quality.

Contact: Vivian Thomas, Communications Director Ministry of Forests, Lands, Natural Resource Operations and Rural Development | 778 974-5809