More independent forest companies wanted in B.C.

letter to the editor from Fred Marshall - More independent forest companies wanted in B.C.

To the editor;

In the Fall issue of Truck Logger, Dwight Yochim stated that continued consolidation of the forest companies in B.C. was not in the best interests of either the people of B.C. nor the forest industry contractors.  Right on; they are in no one’s best interests!  Dwight also suggested that any one company should be restricted from owning more than 20 per cent of the AAC in any region.  Dwight’s suggestion is in the right direction but his percentage is not even close to what it should be; rather it should be five per cent as per the proposal below.

Senior Ministry people, led by Mr. Thomson, have just met with the senior forest industry reps to garner their views on this matter; and, very disappointingly but all too likely, to garner information as to just how their upcoming new discussion paper should be worded!

It is all too obvious that West Fraser and Canfor, via their proposed tenure trades and consolidation of same, are already advantageously positioning themselves for the tenure rollover – which they strongly favor.    However, some companies are not so anxious to move ahead on this.

The public are definitely not in favor of the government’s proposal, and it is mystifying me why both the Ministry (directed by Christy Clark) and these large forest companies are.  Christy did issue conflicting directions to Steve Thomson in her Ministry Directives,  wherein she simultaneously directed him to proceed with the Tenure rollover and to strongly position the government in preparation for the upcoming SLA discussions/negotiations.

If the tenure rollover occurs, the U.S.will go ballistic and nail us to the cross in the next SLA negotiations, as such rollovers will give ever more control to the forest industry.

However, there is a way out of this dilemma.  If the government and the forest industry give the public something in return for agreeing to roll-over the volume based tenures it could work.  Here’s how:

In exchange for the rollover privilege the forest industry gives back a portion of the AAC so that the subsequent AAC allocation picture in B.C. looks like this:

Entity                           Tenure Type  BC AAC allocation (%)

Forest Companies:      TFLs  50%

Communities, First Woodlot Licences  5%

Nations & Individuals TFLs, CFL/Woodland 45%

Licences

BCTS’s allocation would be devolved to the communities and woodlot licensees.

In addition, no company would be allowed to hold more than 50 per cent of the AAC in any TSA nor would the accumulated AAC of any company be more than five per cent of the provincial AAC.  These caveats would help ensure there was reasonable competition for the publicly held timber in local areas and, in the worst case scenario, there would be at least 20 independent forest companies in B.C.

Continued consolidation of the forest companies is not in the best interests of the people of B.C.  When the forest companies state that they need to be big to be globally competitive, my response is – go for it; get as big as you want.  The above caveats put absolutely no restrictions on how big you may, or want, to be.   Your growth into a global giant just must be supported by the purchase and/or consolidation of companies or tenures outside of B.C., which many of you are already doing.

The U.S. has long stated that for the Countervail duty to disappear, B.C. must sell at least 50 per cent of its wood on a truly competitive basis. The above proposal does just that.     Further consolidating B.C.’s forest company AAC allocations will not – so why hesitate?   Any entity, be it the B.C. government or the forest companies, that complain about the current SLA agreement (and I agree it is a bad one) can only expect a crying towel in return.   It is the forest industrys’ and the B.C .government’s fault for the current agreement and they can, and certainly should, position themselves to change it.

These proposals, supported by extensive rationale statements, have all been submitted to the government.  Hopefully they will be given respectful consideration – at least equal to that given to the forest industry.

Fred Marshall RPF P.Ag. Cert.Arb.,  Marshall Forestry Services

 

Greenwood, B.C.