Good news, the Tree Farm Licences expansion program was dropped. Government should now use resources to help small- to medium-sized forest companies.
The following statement by the Minister of Forests was welcome news for those of us concerned about the proposed TFL expansion program: “Given the recent Supreme Court of Canada Tsilhqot’in decision and requests from forest companies and communities to focus on key immediate priorities, the ministry will not be proceeding with legislative changes that would enable forest licence conversions in fall 2014 or spring 2015. His report (Jim Snetsinger) stresses the need for strong First Nations and community support for any proposed expansion of area-based tenures in the province and says new proposals should incorporate measureable and verifiable public benefits.”
It is hard to say if the government got the message that large tenure holders are doing OK but the same can’t be said for the small business programs in forestry which are impacted by a tenure system dominated by a few large companies. The following article highlights some of the concerns that has been evident for the last few decades.
Don Cayo, Vancouver Sun columnist Sept. 9, 2014 wrote the following: “Half the province’s small wood-harvesting and processing companies — 54 of 107 — have folded in the last dozen years, according to Russ Cameron, president of the Independent Wood Producers Association. The other half are struggling. Their annual sales have slipped to just $1 billion, down 60 per cent from $2.5 billion in 2002. Their production has sagged almost as much, from an annual foot board measure of four billion to 1.7 billion, and the workforce has dwindled to 2,400 from 4,000-plus.”
Mr. Cameron goes on to describe the U.S. tax on B.C. lumber and how it impacts the smaller producers and lays the blame on our government.
“The B.C. government, specifically a 2003 policy that, he says, choked off his members’ wood access by creating a series of regional monopolies for a handful of large companies that were given Crown land tenure.”
Previously, his members – what he calls “the competitive sector,” as these companies buy their wood on the open market – had about 11 million cubic metres a year of Crown wood reserved for their use. Now it goes to the big guys – “the non-competitive sector.”
In the last decade-plus, a time when small, family-owned forest products businesses in B.C. have folded at an average rate of one every two or three months, these big companies have not only squeezed out smaller operations here, they have also purchased more than 30 sawmills in the U.S.
The small companies aren’t large enough to compete in the Asian marked and are hurt by the US tax.
• Small companies already pay market price for their wood, so they don’t enjoy the competitive advantage the tax is intended to compensate for.
• An estimated 27 per cent of the B.C. wood exported to China is turned into manufactured products which are then sold, tax-free, in the U.S., thus competing with the small B.C. companies that have paid the tax.
This last point he finds particularly perverse. “The tax only applies if we employ British Columbians to manufacture (products) in B.C. from B.C.-grown wood fibre,” he said. “There is no tax if we export our logs and lumber to China, employ Chinese to manufacture them, and then sell them to our former customers in the U.S.”
Now is the time for public pressure on government to develop a forest tenure system which will extract additional jobs, put more money into the local economy and provide healthy productive forests for future generations. The only additional area based tenures should be woodlots or community forests not TFLs to major companies.