For a government accused of being all about big business, the B.C. Liberals spent a lot of time focusing on the benefits to the little guy of forest policy changes introduced by Forests Minister Mike de Jong Wednesday.
Perhaps the biggest change in a package full of big changes is the commitment to take back 20 per cent of logging rights allocated to major forest companies.
Half of that 8.3 million cubic metres of timber will be redistributed to First Nations, community forests and woodlots, with the other half being put up for auction under the new B.C. Timber Sales program.
The take back only applies to volumes over 200,000 cubic metres and will affect 27 companies in the province. Companies in Prince George such as Lakeland, Dunkley, Carrier and The Pas will be moderately impacted.
Canfor, with 8.2 million cubic metres over four million of that in the Prince George Forest Region will lose about 1.6 million cubic metres.
The company is generally supportive of the changes, though, and doesn’t expect the take back to affect operations much, said Ken Higginbotham, Canfor’s vice-president of forestry and environment.
“Our assumption is that there’s going to be wood out there on the market and one way or another we’re going to recover the wood we’ve lost.”
What major licensees lose in tenure they should gain back in a number of other regulatory changes, he added.
De Jong promised to eliminate “waterbedding” the process whereby low stumpage rates in one part of the province are made up with high prices in other parts. The Central Interior has typically paid some of the highest rates in the province.
About 20 per cent of Crown timber will now be sold through auction. The prices set at those auctions will determine the stumpage rates on the other 80 per cent of B.C. timber.
“There is a risk to government to this, but we think the long term benefits outweigh the risks,” said Prince George-North MLA Pat Bell, who suggested the province’s revenue stream could be maintained throughout the market cycle by creating a “rainy day fund” similar to the way Alberta deals with the oil and gas price cycle.
Up to 45 per cent of the province’s timber will eventually be available through the open market. A number of other major changes to the way timber is sold, cut, and distributed will create a more market-based approach across the industry, said de Jong.
He promised to eliminate cut control regulations that forced companies to log even when they were losing money or face losing their cutting rights.
He will kill the requirement that licensees process all their own logs and that they do them at certain mills (the “appurtenancy” requirement). And companies will no longer pay penalties for closing unprofitable mills.
That doesn’t mean more mills will now close, said Roger Harris, chair of the Liberals’ northern caucus, who also argued the changes won’t necessarily lead to the death of one-industry towns.
“It’s not so much that you’re going to see mill closures as the mill in your community will be doing different things.”
Bell suggested the changes will allow a freer flow of logs. They will allow companies to process the right log in the right mill. Overall, he said, it will make the entire industry more efficient.
“What this is all about is making sure we, as a province, get the most value out of every tree cut.”
All the changes will mean the province is returning to a place, he said, where “a guy with a skidder and a power saw can get back into business.”
First Nations access to timber licenses will increase from three per cent to eight per cent. Community-based forest tenures, such as woodlots, will be doubled. And small-scale operators, value-added companies and contractors will have more opportunities to secure wood through the open market, said Bell.
The government dismissed concerns the changes will make it easier for big companies, with their economies of scale, to buy up all the tenure in a given region.
“We are going to reserve the statutory right to ensure there is sufficient competition in the timber market,” said de Jong, although he didn’t say what level of competition is “sufficient.”
De Jong also rejected any change to the level of raw log exports allowed. The new policies will allow freer movement of timber within the province, but will still require wood cut in B.C. to be processed in B.C., he said.
The changes were not tailored to meet American expectations in the softwood lumber dispute, Bell added.
“We’re hopeful the Americans are going to look at this as the direction they would like us to go. But this is not being done to keep the Americans happy. This is being done because it’s the right thing for the industry.