Legislative Session: Fourth Session, 39th Parliament
Special Committee on Timber Supply
This is a DRAFT TRANSCRIPT ONLY of debate in one sitting of the Legislative Assembly of British Columbia. This transcript is subject to corrections, and will be replaced by the final, official Hansard report. Use of this transcript, other than in the legislative precinct, is not protected by parliamentary privilege, and public attribution of any of the debate as transcribed here could entail legal liability.
REPORT OF PROCEEDINGS
SPECIAL COMMITTEE ON
TUESDAY, JUNE 19, 2012
The committee met at 3:08 p.m.
[J. Rustad in the chair.]
J. Rustad (Chair): Welcome to our meeting of the Special Committee on Timber Supply this afternoon. My name is John Rustad. I'm the MLA for Nechako Lakes and the Chair of our special committee.
The goal of the committee as it has been tasked is to go out and to look at the mid-term fibre supply issue associated with the impact from the mountain pine beetle epidemic. The committee has to have a report back to the Legislature by August 15, so we have a very tight time frame. Part of this, of course, is that we felt it's important to go out and do community consultation.
This week we started with our community consultations with Smithers and Houston on Monday and Burns Lake this morning, and we're here in Fraser Lake this afternoon. Tomorrow we'll be in Vanderhoof and Fort St. James. Thursday we're in Prince George and Mackenzie, and Friday we're off to Valemount and McBride. We'll also be touring the week of July 2 and the week of July 9. There's an opportunity for people to be able to present in those communities to our committee, as well as to be able to present a written submission to the committee, which can be sent to our Clerk's office and to the website we have set up, which is www.leg.bc.ca/timbercommittee.
At this time I would like to have the members of the committee introduce themselves, starting on my far left.
B. Routley: Bill Routley, MLA for the Cowichan Valley.
H. Bains: Harry Bains, MLA, Surrey-Newton.
N. Macdonald (Deputy Chair): Norm Macdonald, MLA, Columbia River–Revelstoke.
D. Barnett: Donna Barnett, MLA for the Cariboo-Chilcotin.
E. Foster: Eric Foster, MLA, Vernon-Monashee.
J. Rustad (Chair): And Ben Stewart will be joining us shortly.
Along with the committee we have a number of people who are touring with us in support. Kate Ryan-Lloyd is our Clerk of Committees. She is the person who makes sure that we are doing everything we're supposed to be doing. I always like to thank Kate because she's also responsible for arranging our accommodations and meals. She does a great job looking after us.
At the back we have Jacqueline Quesnel, who is also with the Clerk's office, providing support. Everything that we do as part of these community tours is broadcast live on the Internet and is also recorded by Hansard as part of the records of B.C. Of course, it helps us when we're doing our background. When we're doing our deliberations, we're able to call on it.
The Hansard crew here today is Michael Baer and Monique Goffinet Miller. They have quite a task trying to keep up with us. Sorry, I forgot. We have a three-person team that travels between the various communities so that Hansard can stay involved with us. We've also got Jean Medland here with us in Fraser Lake.
With that, part of the community opportunities that we have for consultation is to be able to provide time for mayor and council, followed by time for chief and councils from the First Nations and then an opportunity for the public input component.
Having said all of that, we are all sitting here now. I think we know the challenge that's in front of us, what the mountain pine beetle epidemic currently looks like across the impacted area. It's anticipated that we'll lose about 10 million cubic metres of wood per year, and that's the equivalent of about eight sawmills.
Our goal is to try to look at how we can potentially mitigate that timber supply, that mid-term fibre supply issue. We're looking for your input in terms of what your priorities are, what types of things that we should be thinking about and the things that we should be taking into consideration as we go through looking at the various options we have for mitigating the timber supply issue that we're facing.
Today, this afternoon, we have, of course, the mayor of Fraser Lake, Dwayne Lindstrom. Dwayne, I'd like to turn it over to you, to introduce the people that are with you and to start the presentation.
D. Lindstrom: Good afternoon, panel. Thank you for attending and listening to our concerns.
Bill Miller isn't here yet. He phoned me, and he's on his way. He's the chair of the regional district of Bulkley-Nechako. He's here to support us, because it's all one region.
On my left here are our councillors. They would be Coun. Kerry Jantz on my left, and Coun. Dan Duncan, and I'm Dwayne Lindstrom.
Anyways, I guess we might as well get right at it. I've got a few pages here that I'm going to read. Thanks again for coming. I can tell you that I sure wouldn't want your jobs. It's going to be tough.
Just a little bit about what we're doing here. I've been in the logging industry all of my life, and the mountain pine beetle has had a major impact in this area. As you know, I attended the meeting in Burns Lake this morning and was not surprised at the attendance and the plea that was made to rebuild the mill. I, as mayor and the leader of this council, certainly hope there can be a way to rebuild the mill so that Burns Lake can be a vibrant community again.
The village of Fraser Lake has very close ties with Burns Lake, because part of our timber supply is in there. Fraser Lake Sawmills is in the Lakes TSA, and we certainly don't want to see that reduced, as that would greatly impact our community as well.
I heard from a few groups this morning — the five mayors in the area that didn't want the timber supply to be tampered with. I'd like to quickly respond to that. There certainly are other ways to look at the timber supply in our area. On a positive note, we as a group of communities in the region would like to work very closely with Burns Lake and to help in any way we can without jeopardizing jobs in our own communities.
Having said that, I'll read out some of our thoughts and concerns on the paper in front of you. Just a side note, if I may. As of January 20, that explosion impacted Fraser Lake as well. Since then, Hampton has sold some of their raw logs out of the mill yard to other companies, and Fraser Lake Sawmills has been one of them. There are logs being transported into our sawmill that our trucking community has not been part of. In turn, that pushes back our startup date. Just a little note on that.
I also have concerns that West Fraser and Fraser Lake Sawmills are proposing a co-generation plant in Fraser Lake here. I have a few concerns that until this process that is going on here right now…. It might move that back until this process is complete. I haven't talked to West Fraser, but I have a feeling that they're probably pretty nervous about it.
Anyways, if I can just get on with the paper in front of us here, it's our position that government must ensure that mitigation options implemented to improve one community's timber supply are not detrimental to other communities. In other words, government should not pick winners and losers.
Mitigation options should focus first on supporting existing processing facilities. The open competitive market brings excellent leadership with forest communities. I heard that in Burns Lake this morning as well — that an open and competitive market gets strong.
Investment should be made to improve forest industries.
Options to mitigate timber supply shortages should be subject to review to ensure that they don't compromise environmental values, and mitigation options should only be implemented when social licence has been assured.
Reduction of timber supply constraints will improve timber supply. I heard that just about through everybody this morning in Burns Lake. Area-based tenure can potentially increase private land-based investment and intensive forest management combined with constraint reduction. This should lead to improved mid-term timber supply.
The village of Fraser Lake has been working towards a community forest for some time now, and the only message we are receiving is that there is no timber available. I'll just leave it at that.
No. 7, there has to be intensive silviculture throughout the whole central northern B.C. to bring back our forests, as we are dependent on forestry in this province.
In closing, the process must be fair and equitable to all communities.
J. Rustad (Chair): Thanks, Dwayne. Would anybody else at the table like to add some comments to that?
B. Miller: Sorry for being late. I appreciate the second opportunity to share with you our thoughts. I sit here as chair of the regional district now. One of the things that I had said to Mayor Lindstrom….
As we have discussed in our forestry committee over the last number of years, we have worked towards a number of these goals to improve our availability over the mid-term. As we have all just gone through today, and as I'm sure you've gone through at length for the other proceedings that you sat through, we are forest-dependent communities, and we need to look at our sustainability.
I think it's obvious with the submission that you're getting from Fraser Lake that we are mutually supportive across our region for our communities. Sometimes, though, we have different needs, and I'm sure that you heard that in other communities as well. But the reality is that we are mutually supportive. We are very much a forest-dependent area that stands across our region from east to west and north to south.
We're very forest-dependent. I think that it's critical now that you do, in your deliberations, make certain that you think these things through and come up with a very fair and equitable proposition to keep our communities viable.
As I did with Burns Lake, I do…. There's nothing in here that is contrary to the principles of our forestry committee and our board as a whole. So again, we wholeheartedly support the work that you're doing and the submissions that Fraser Lake has made to you.
K. Jantz: Just a couple things to reinforce what Mayor Lindstrom had to say. First of all, it's really nice to see you folks in person. We just get to see your pictures in the paper, and usually that's connected to a bad-news story. Well, not all of you. Sorry about that. Anyway, it's great to have you here and have you listening. I really appreciate that.
Early in the paper that we presented, it talks about not picking winners and losers. I just want to change that word a little bit, because I think it's such a slippery slope. I think it's not about picking. I think it's about creating, and I think that any process is always running the risk of slipping over that line and creating winners and losers.
I think that in our competitive and open market, our free market, in this industry, that's going to happen. I think that happens. There are winners and losers in any industry, and I think that they should be self-determining based on innovation, creativity, proper management and all those kinds of things.
I know that in a lot of the communities that you folks represent, there are a lot of licensees and small business forest professionals that are incredibly innovative. I think our province is blessed to be in an innovative market. We see that. Mayor Lindstrom talked about the co-gen plant that West Fraser is planning. It's not just on a whim. It's innovation, and it's quality management.
If we're not careful, we create an environment where innovation is lost and we have a community of beggars coming back to the well, coming back to the government, coming back for some support or a top-up here and there. That worries me a little bit.
I think that there are going to be companies lost, and I think communities are going to suffer, right from the top tower of downtown West Vancouver to Endako Avenue in Fraser Lake. It's going to happen, and I guess that's where we live and who we are.
I just want to reinforce what the paper talks about on intensive silviculture. I know from firsthand experience. I'm not a forester, I'm not a logger, but I have extensive experience in the silviculture industry. I worked in it for eight years. I ran a small company. I know that we aren't doing a small iota of what we should be doing in this province. We haven't been since the infestation started just a little bit south and west of here.
It got cut back with the dissolution of FRBC and the Forest Practices Code and some of those kinds of things, and I think we need to get back there. If government is going to be involved, I think that's where they need to be involved — in supporting and fostering that environment. That's a long-term solution. That's getting our forests back to where our industries can be back to maybe where they are today. I don't believe they ever will be. But those are just a couple of comments that I'd like to throw out there.
I could be sort of negative and talk about past history and some of the things that happened as the economy turned and sawmills were closed and the way that big and small licensees handled those closures and those shutdowns and the way they dealt with their people in those shutdowns. But I don't think that's….
I just want to make the point that those people, those individual taxpayers, those mom-and-pop people that were trying to put their youngest children through college for the last year, who were 55 and 58 and 60, lost their jobs, their homes, their savings. There wasn't a lot of help from government stepping in to say to those licensees: "Treat these people with respect."
So I'm a little afraid that now we're at the other end of the spectrum and government is taking a lead role or going to step in into this slippery slope and impact from the other end of the spectrum.
I just want to say it's sort of an all or nothing. If we're going to do it, we need to do it and support everybody in the industry — right from the guy on the greenchain, they used to call it, or piling lumber or doing whatever, to the corporate heads of big corporations anywhere in North America. Those are my points.
D. Lindstrom: I'd just like to say one more thing about that. I've lived in Fraser Lake all my life and West Fraser, when this big disaster happened with this pine beetle and whatever, it was…. I don't remember being shut down at all from West Fraser, Fraser Lake Sawmills. They kept us all going. It was great. I just had to add that.
J. Rustad (Chair): Daniel, did you want to add anything?
D. Duncan: I don't have anything new to add. I just want to reiterate the comment made earlier that I just hope the entire thing, the process, is run fairly and equitably and benefits one community not to the detriment of another.
J. Rustad (Chair): Sure. Thank you very much for the presentations. I'll open up questions from members.
D. Barnett: You mentioned, Mayor, West Fraser proposing the cogeneration plant. You've heard that it will be put on hold till this process is done?
D. Lindstrom: No. I haven't talked to West Fraser at all, but if I was them I would be certainly concerned about it, until this process is complete and they know exactly if they're going to have timber supply for it or if that's a concern. I don't know.
D. Barnett: But there's been no dialogue?
D. Lindstrom: Absolutely none. No.
D. Barnett: Thank you.
D. Lindstrom: That was just something I threw out there. It's just something that I'm concerned about as the mayor of Fraser Lake, because it's going to create some more jobs, possibly. I'm concerned about that.
N. Macdonald (Deputy Chair): Just a couple of questions. Thanks for the presentation. Just to stick with the cogeneration plant, then, is there an energy purchase agreement already in place for that?
D. Lindstrom: I believe there is, yes.
N. Macdonald (Deputy Chair): Okay. So that's set to go then.
Secondly, I take the point about silviculture and inventory, and I think those are issues not only locally but also provincially. I think the Forest Practices Board probably has a…. We're expecting another report coming out next week on areas that could have been replanted. So we'll probably have more discussion about that.
I'm interested in where we are. We've got a tight time frame for this committee, and I think, as you pointed out, Your Worship, it's a pretty complex task. So a couple of questions about previous work that's been done. Where we are has been predictable for quite a long time. Presumably there was work that was done with…. I guess the vehicle would have been the pine beetle action coalition. I'd be interested to hear how that fits into what this committee should be considering.
Obviously the other work that we would have expected to have done was from Mr. Clark, who was very active in Burns Lake. Obviously what you're telling us, and other communities are telling us, is that the region is interconnected in a way that one would presume that in doing work for Burns Lake, there was participation with Fraser Lake and other communities within the region.
I guess my question is: what should we know about the long-term work that was done from the pine beetle coalition that's relevant to what we're doing here? And also, what work was done with Mr. Clark that would be relevant to this? Did you participate in that process?
D. Lindstrom: I'm not sure how much consultation has been with OBAC and you guys' committee. I sit on OBAC's board, and I'm not as up on it as I should be. I can guarantee you that.
As far as Mr. Clark, I sit on the regional district board as well, both in Nechako and…. He did a presentation to us there on what should be done or what they felt should be done. He had asked for an in-camera meeting in Fraser Lake's village council, so we did that, and there was a no-show. So I'm not exactly sure what's going on there.
N. Macdonald (Deputy Chair): Is that recently?
D. Lindstrom: About a month ago. He had called for an in-camera meeting with the village of Fraser Lake, and he was going to be going up and down the line. I'm not sure which other communities he had approached.
N. Macdonald (Deputy Chair): That would have been the sole discussion to that time?
D. Lindstrom: It would have been to do with this particular problem in Burns Lake, I guess. For some reason he never showed, and we never heard any more about it.
N. Macdonald (Deputy Chair): Okay. Thank you.
J. Rustad (Chair): Just one bit of clarity. The meeting that Bob Clark had with the regional district — where he presented, of course, to all the mayors and all the people of the regional district — was that in camera, or was that public?
D. Lindstrom: Yes, it was in camera.
J. Rustad (Chair): It was an in-camera meeting. Okay. Thanks.
B. Routley: Thank you for your presentation. As you are aware — I think you were at the other meeting and heard some of the discussion — we were urged to look at visual quality areas. Also, there was discussion about old growth that has been impacted by the pine beetle and some of the other…. Well, depending on who you talk to, some people call them constraints; some people call them an important part of the land use planning process that really dealt with the war of the woods.
We've had a lot of years of relative peace in the woods because of a lot of those areas being set aside. Of course, it's obviously a serious matter indeed to be looking at some of those issues and have it raised. I wondered if you or your community had any position one way or the other. Do you see the benefits of looking at dead pine that is currently in old-growth areas? What about some of the other issues: VQOs, etc.?
D. Lindstrom: I've spoken out quite a bit about constraints, like visual constraints, and I'm not really familiar with the term "old growth." It's been explained to me a few times, but I'm not a forester, so I kind of don't understand it totally. But as far as the visual constraints go, I've been quite boisterous about that. I do believe that these dead pine trees are…. That's just exactly what they are. They're dead, and they should be taken out. Not in any riparian areas, but they should be relaxed.
I do believe that…. My philosophy on it is: greener, faster. If we can get that dead wood down and replant it somehow before it loses all value, I feel that that's one way that we probably can help out that mid-term timber supply. As far as the old growth, I'm not totally sure of that term — what it actually means. I know what old growth means, but I know that there are green stands in there as well. I guess I'd have to bail on that one. Help me.
B. Miller: I know we've had discussions at the forestry committee level about restraints, and most of our focus has been on visual quality objectives because they are the most, for lack of a better word, visual, for one thing. They are the ones that are tied to fuel mitigation around our communities, because of course the visual areas are along our corridors. So they have been the greatest amount of focus.
I actually think it came even maybe out of Bob Clark's discussions with some of the RPFs in the area — that old growth was brought to the table. But I think that is more relevant to the Lakes TSA because, and you heard it this morning, the way they were written into the land use management plan was they were spatial constraints. So they were locked onto a land area.
Other districts have chosen to do them as a percentage basis, and it makes more sense in terms of being able to manage that old growth. So I think that's…. I don't know whether that answers your question, but that's, for the most part….
B. Routley: That's helpful. I guess another question is: are communities such as yours also concerned about fire mitigation plans and the impact of the pine beetle versus…? You know, if we do nothing, does it actually make matters worse for your community?
D. Lindstrom: As you know, we had a huge fire here a couple of years ago. It burned up a lot of stuff. Like, new plantations were burned, and some, I would imagine, 20-year-old plantations were flattened. Get rid of these dead trees as quick as we can, and get them growing green again.
I live across the lake from here, and I look at the side of a mountain that has had logging slash on it for all my life, basically, and it won't take very long to get it growing green again. That mountain was green standing timber when I was a young fella, and then the pine beetle came, and it turned it red, and then it turned it grey. It's been logged quite heavily in the past ten years.
The new plantations that are growing there already are nice and green. It's a good visual to look at, you know. As far as the visual qualities go, I think I would way sooner look at a green forest than a dead one or a black one.
J. Rustad (Chair): Thank you. I've got myself on the list next, and then Harry.
I've got a couple of questions for you. In particular, you mentioned in here that the community has been after a community forest for a while. Obviously, I've been working with you on that particular issue. One of the options that is being considered in all of the supply areas, towards mitigating some of the impacts of mid-term harvest supply, is looking at low-volume stands.
Low-volume stands can be defined as stands that might be aspen-leading, but they also might have significant dead pine and be 20 or 30 percent sawlog, whatever that component may be. Low-volume stands do not currently contribute towards the annual allowable cut, and those calculations will not contribute as part of the mid-term fibre supply, although some companies can find ways to be able to operate in them.
If there was an opportunity in low-volume stands that was, say, to be grouped in some sort of an area type of thing, is that something you'd be interested in looking at as a possible area-based tenure for a community forest?
D. Lindstrom: You bet. Anything that will make us money.
J. Rustad (Chair): One of the challenges, of course, is that there would be a lot of biofibre that would come from that low-volume type of stand, so there would have to be some way to utilize some of that fibre as well. I don't know what it would be.
In any case, I just wanted to get what your expression of interest would be if there was that kind of an opportunity. Also, if there was an opportunity around that, would you be interested in perhaps partnering with the First Nations associated with that kind of a community forest?
D. Lindstrom: I've always wondered why there would be an issue with just going into these dead stands and trying to make something out of them before they're totally gone, type thing. We've been hauling this pine beetle–killed wood for the last ten years, and they're still making lumber out of it. Hopefully in the future there will be some other energy sources that we can use out of it, and I believe that the village of Fraser Lake would be pretty happy to be involved in something like that as far as partnering with First Nations — whatever it takes, type of thing.
We're pretty open-minded. We've got a pretty aggressive council here that is willing to work with everybody. Sometimes it's a challenge, but we're willing to listen and work with government as well as First Nations. Whatever works.
J. Rustad (Chair): The second question I have is…. Kerry, you mentioned silviculture investment and that we need to see more investment in silviculture and planting; 100 percent of stands that are harvested today are obviously replanted. The average age for replanting is six to 18 years.
I'm just wondering: what are you suggesting in terms of that silviculture investment? What are you looking for?
K. Jantz: Well, I think that a lot of the stands are planted, and planted well. They're planted at a very optimistic and a very, you know, acceptable rate of replantation. But I think they're left free-to-grow way too soon. I think they need to be tended. They need to be invested in so that, you know, the competition is knocked back sooner and for longer so that pine and spruce stands can grow and grow quicker. We're getting warmer….
J. Rustad (Chair): Sorry, when you're saying, "To knock out competition," you're talking about doing…
K. Jantz: We're talking brushing, weeding.
J. Rustad (Chair): …intensive silviculture, looking at brushing and weeding, herbicides — those types of things?
K. Jantz: Yeah, spacing, thinning — all of those kinds of things. Very labour intensive. It takes 30, 40 years, but it pays off in getting those stands free-to-grow and healthy — free-to-grow quicker, faster.
H. Bains: Thank you for the presentation. I agree. I think the region is going through some of the toughest times that we've seen, and everyone is concerned where we land at the end of the day.
I just want to go, I think…. We have been to a few communities already, and the general theme is there that the mitigation options, if we come up with any proposals here, be such that they are not — as you have said in your paper — detrimental to other communities.
The question that comes to my mind as a committee member here…. Post–pine beetle era we see that the AACs will be dropped across the region — some more than others. As the chair has mentioned, the percentage of AAC going down, resulting in some numbers, but eight mills going down out of a total of 24…. That's one-third. Potentially, it could hit every community — right?
When you say that, my question to you, sir, is: if yours was the community, and this committee was to deal with that issue and come up with some kind of mitigation proposal, how would you suggest whatever mitigation options are to be considered or not?
You could argue every time you try to save a mill that it could potentially hurt the other mills, because the fewer the mills, the better the security, both on the timber supply side and for the jobs. I think that's the dilemma that the committee will be going through and communities will be going through as well. We can take that position because there may be one mill right now where maybe everyone is looking, but there are more coming. So how do you propose that we deal with that dilemma when that hits us?
Right now, if you look at…. Our role is to find a better timber supply, more timber supply so that we can mitigate the job losses. If it's not eight, can we bring it down to six or down to four? But then it could be argued by those operators saying: "Look, every time you save a mill, it potentially is going to hurt us."
How do you answer that question when this committee is wrestling with that proposal and you could be one of those communities?
D. Lindstrom: That's a good question.
A Voice: It's a fair one.
D. Lindstrom: It's a fair one, that's for sure. I guess I don't know. It's tough. I just really don't have an answer for it. I was hoping that's what this committee was for. It's probably going to be the last man standing, I suppose, as far as who's….
H. Bains: Thank you. No, I appreciate that it's not easy to answer, and I wasn't expecting a quick answer to that. It is a quite complex question and in part will require a very complex analysis of the entire situation that we are facing.
I think I just want to leave it here that, as leaders of the communities and as representatives of the government, it is the role of all of us together to make sure that whatever we do, we maintain communities' stability. That's the role.
We could simply throw our hands up and say: "Look, we can do nothing." I don't think that's the role of this committee. In my view, that's not the role of the community leaders. We need to sometimes take on a tough question and answer it for ourselves, because we owe it to our children. As community leaders, you hear this every day, and so I think that's something that we as leaders need to look at.
How do we come up with a proposal that…? These forests belong to all of us, to the public, so we want to make sure that they are put to the best use for our public. Whether it is to find some new ways of finding the timber — you know, we talked about the visual quality of the region — or old growth…. Old growth is there, but if 73 percent of the rest of the stand is dead, that's probably true there as well. So what old growth is left?
All those things we need to look at and see if we can find some way of mitigating some losses, because that's the role of all us and that's what we try to struggle with.
D. Lindstrom: The communities in the region here… I think I mentioned at the beginning that the five mayors, for sure, are working together — including Burns Lake, with Mayor Luke — to try and…. He's a very smart young man, and he's really trying hard to try and find a way as well. We've made it very clear to him and his people that we will work with them to try and get something working for them as far as help.
H. Bains: Just a follow-up. I think a couple of you were at the….
D. Lindstrom: I attended it.
H. Bains: Anything you heard from them that concerned you at all — any proposal that came up from the company or from the community leaders? Is there anything that sort of worried you?
D. Lindstrom: This is a public meeting, I guess, and it's wide open. Is that correct? I can speak about anything that I heard at Burns Lake this morning?
J. Rustad (Chair): Yes.
D. Lindstrom: The thing that did concern me was when Hampton made their proposal as far as not increasing their timber supply at all but cutting the annual allowable cut back to one million metres per year instead of the two in the Lakes area. Cutting it back to one million cubic metres per year…. I hope I understood this correctly: to give the rest — theirs is at 450, I believe — to the six First Nations that are in the area on an area-based tenure to support that mill, to get them up to that million cubic metres for the two mills. Is that correct?
B. Miller: If you want, I can clarify that a little bit. What they were saying there this morning — what I understood, anyway, Dwayne — was that they were asking that…. We would have been uplifted to two million cubic metres in the Lakes. They're not cutting two million cubic metres right now, so what they're saying is to reduce that uplift to one million cubic metres to try to extend that out.
What they were talking about in terms of First Nations was any unallocated volumes that were available. Some of those unallocated volumes are already slated, I understand, to go towards First Nations woodlot tenure and stuff like that. It was any of the unallocated volumes to go towards that. It wasn't…. That was my understanding, anyway, of that. Is that what you guys took from that?
J. Rustad (Chair): Yeah. That's good.
D. Lindstrom: I was just concerned about that. You know, I thought, "Holy smokes," because we're in that timber supply area as well — Fraser Lake Sawmills is. That would put us right down to zero, and that wouldn't be very good for us.
J. Rustad (Chair): Understandable.
B. Miller: If I could make one more comment, too, just to your question there on community viabilities and whatnot…. One of the things we are faced with…. We are faced with those decisions and those processes, but the one thing that I think…. It's the higher level of government more so than us at sort of the community level — that kind of overall direction that needs to be given. You know, we look across our landscape and we see logs leaving our coast at a fairly high rate on the west that could come into our western communities that could mitigate.
We see a number of things that could certainly expand the basket that we have to draw from, and I think the part that we're faced with is the sustainability of our communities. The part that you're faced with is that bigger decision of whether that ends up to be a couple of big processing plants in either end of our valley. Or does it mean that we all each have a piece of that basket? I think that's the question you're going to be tasked with.
Yeah, we struggle within our communities to ensure that we have sustainability. I think that you can see, even with the contentious issues across our valley, that we do support one another. I don't think there's any issue with that at all.
J. Rustad (Chair): Any other questions from committee members?
Well, hearing no other questions, I want to thank you for taking the time to meet with us here today. As you are well aware, as you've expressed, and as we've talked about as well, this is a very critical issue for all of the communities throughout the area that is impacted by the pine beetle, whether it be a single-mill community or a community that has multiple operations in it.
There's no question that there's going to be a fairly broad impact in the Prince George supply area alone. It's projected that the loss will go from ten million cubic metres cut currently to about just over six million cubic metres. That will certainly have an impact. That's what we're going to be trying to mitigate — minimize what that potential impact is.
We'll stay in touch in terms of how that process goes. Our report, like I said, will be done by August 15.
D. Lindstrom: I'd just like to say, on behalf of the village of Fraser Lake, thank you very much for coming here and listening to us. Whether we made any sense or not, we got it out there on the floor anyway. Thank you very much.
J. Rustad (Chair): It was much appreciated. Thank you.
We will take a short recess until 4 p.m., when we'll reconvene our next portion.
The committee recessed from 3:52 p.m. to 4:09 p.m.
[J. Rustad in the chair.]
J. Rustad (Chair): Good afternoon, everyone. Welcome back to the reconvening of the Special Committee on Timber Supply.
We are going to start a public consultation process in the community of Fraser Lake. The process, for those that may not be aware, is that you have 15 minutes to do a presentation to the committee, and you can use that time any way you like in terms of the presentation. If you'd like to leave some time for questions and answers, of course that may be helpful.
With that, our first presenter is Greg Farney from Strive Energy Services.
Over to you, Greg.
G. Farney: Thank you for allowing me to come over from the Burns Lake meeting, where I'd originally intended to meet. I did make a sacrifice, as I mentioned, on my son's ninth birthday. So if I didn't make the presentation, I wouldn't be allowed to go home.
I intended to be an observer of the meeting this morning. A couple of key points came out, and I felt that it was imperative that I did a presentation. It may be of key interest to the people of Fraser Lake as well.
Strive Energy Services. Being from Calgary, oftentimes people think of us solely as an oil and gas services business. That's not the case. We look at energy as far as wind, water, biomass, oil and gas. People are a big piece of our mix.
We have formal relationships with 31 First Nations and tribal communities in both Canada and the United States.
Our reach goes as far east in Canada as the Birdtail Sioux, which is in Manitoba; as far west as the Burns Lake communities themselves; north to the Woodland Cree in Alberta and the Fort McMurray First Nation, which is where it sounds; and all the way down south to the Southern California Tribal Chairmen's Association, which is in San Diego County in California.
So we're looking at energy of all shapes and forms. In California in particular, what they do best is make smog and garbage. We're looking at vast amounts of waste-to-energy projects down there in conjunction with the Department of Defense — the navy in particular in southern California.
We've been working with the Burns Lake communities, particularly Cheslatta Carrier Nation, for about 2½ years now. With our relationship, we're going to be opening an office soon in Burns Lake, probably by September. We've reached out to the community in the case of the tragedy. We did sponsor two months of the millworkers' breakfasts at the request of a couple of the chiefs and, more importantly, a couple of their wives that are associated with the volunteer efforts there.
One of our key drivers as a business: we are only involved in viable and profitable projects. So the renewable projects that I'm going to mention here are commercially viable and proven. Some of the technology partners I think you'll be quite impressed with, as they are Fortune 100 companies.
Our mantra — which is resonant with what we're hearing from the different community members, both today here and as well back at Burns Lake — is: "Adapt or die." We stole that from the Brad Pitt movie Moneyball, where he was forced to create a baseball team with no budget. We look at this as a no-budget opportunity but a tremendous opportunity that's at the disposal of both the people of B.C. and everyone associated around it.
At the direction of Minister Bell and Bob Clark — and it's no allergy to us — we've been asked to work with the Burns Lake Native Development Corporation, which we had started unofficially and unknowingly with Cheslatta. Our ask to them is to work with 200,000 metres per annum.
The largest piece of that would be 140,000 metres of anything — quite virtually anything — from needles to leaves to aspen to pine beetle kill, etc., that we'd manufacture into bio-oil that can be high-graded to biodiesel and even all the way up to fighter aircraft–quality aviation fuel. This is, again, proven technology.
The technology partners that we have involved in this: Sustainable Development Technology corporation, which is a federal Crown corporation, very successful — been around for ten years; Honeywell UOP, which is the largest and most prominent manufacturer of refining equipment in the world, and they truly do own the refining business; Lockheed Martin Corp., which is their U.S. head office, as well as Lockheed Martin Canada; and ourselves, Strive Energy. Chevron oil and gas is in the background in the process but not directly involved.
The high-probability end user/customer for the biodiesel or the bio–aviation fuel is the U.S. federal government. They have recently identified Canada as a domestic supply. So they've opened their envelope from just the U.S. into Canada as far as domestic supply. The policy that is in place now was put in place by President Bush and has been augmented by President Obama. So it is a bipartisan and very real policy that is taking place right now.
Outside of the 140,000 metres that we're looking at, we're also looking at 60,000 metres per annum for the construction of matting. Mike Robertson from Cheslatta mentioned it. We construct mats that are utilized to protect the environment in the western Canadian oil and gas sector.
We have those placed in depots and in high use as far east as the Birdtail Sioux in Manitoba and White Bear First Nations in Saskatchewan. In northern Alberta we work with the Fort McMurray First Nation and Sturgeon Lake Cree Nation. All of these relationships are in formal, documented business relationships.
In the case of the Burns Lake area, we are looking at utilizing the finger joint facility. Ultimately, we'd provide direct employment to 25 full-time employees in the area. That would be for management down within the facility itself. This is just for the mats.
The direct impact on the logging, trucking, etc…. We're not loggers, so we don't know how to justify that number. We've heard as many as 150 indirect jobs within that side of it and then the tertiary jobs with what goes back into the local economy and elsewhere. We can't measure that ourselves.
The real key, and what I wanted to get across in Burns Lake and also for the people here at Fraser Lake, is that we're looking at augmenting all the activity. We don't view it in any sense, shape or form as a competitive solution to the mill rebuild, the mills that are in place, etc. I think that's a very key piece of the puzzle there.
Our ask of the B.C. government. We're a viable business; we don't want any money. We don't want nor are seeking an EPA or a power-purchase agreement at all. What we need is a decision. We are losing opportunity right now in Alberta. We're losing opportunity here to create jobs. A decision needs to be made.
Initial meetings with Minister Bell indicated that we would have a timber allotment in conjunction with Burns Lake Native Development Corp. by July 1. That would have put us into production. Our first shift of production would have been in September. We've now pushed that back to probably January, if not later.
What we're seeing, to give you a measure of what we're looking at, is that every day's delay in the process really leads into a week before it starts. If you said today we can start, it would be a week from now that we would start. That gives you an indication of the impact on a viable business — a very viable business.
What we're going to be doing is providing the Burns Lake Native Development Corp. the business model that results in them holding the majority of the shares in this business. It's unusual. It's unconventional, but the profit margins are there. Our relationships with the communities across North America are vital, and we do this in all of our situations, so it's key to understand that.
One of the points that…. I did want, for the record, to give some indication of the support from the different communities that we work with. When I say communities, I mean aboriginal communities. I received text and phone calls of support both yesterday and today coming from the Birdtail Nakota Sioux Nation in Manitoba, White Bear First Nations in Saskatchewan, Fort McMurray First Nation in northern Alberta, Sturgeon Lake Cree Nation in the Valleyview area of northern Alberta, Alexis Nakota Sioux Nation in the Edmonton area, the Northern Cheyenne of Montana, the Blackfeet of Montana, the Crow of Montana and the Southern California Tribal Chairmen's Association.
I'd just like to forewarn you that when the Cheyenne and the Sioux got together the last time against government, it was a mess for Mr. Custer. I'm just using that as a pun. [Laughter]
That's all I wanted to convey. Again, we're here to augment, not supplant. It's a viable product and solution. It's been proven time and time again. We have a patent pending because we use pine beetle kill. That's one of the key foundations of our patent on our matting solution.
I'm open to any questions, if you have any, with respect to our partners or anything that we're doing in conjunction with our project.
N. Macdonald (Deputy Chair): First, thank you for the presentation. So just to understand, then. The fibre supply that you're looking for is a fibre supply that you would see as not in competition for sawlogs or anything like this.
Now, you talked about a commitment that's been made, that you've been encouraged and led to believe that this is something that is going to be supported, and you're just waiting for a final decision to be made.
G. Farney: Yes. From the matting side of the business, it's very easy for us to utilize the mats that we will be constructing in the Burns Lake area for industry. There's a massive shortage right now. We do get a price-competitive advantage because the vast majority of the mats come from the U.S. So we have that advantage.
In the case of the bio-oil perspective, it's treetops, leaves, pine needles, branches — everything that no one else really wants.
N. Macdonald (Deputy Chair): Wow. And the economics work, obviously, for you. You've figured that out.
G. Farney: Beautifully. We've vetted it. We have some of the most complex business models going. The advantage of working with a company like Lockheed Martin: they will not put their name on something unless it is an absolute certainty. They vetted the technology, in conjunction with the Sustainable Development Technology corporation, and it is tried-and-true and ready to go.
J. Rustad (Chair): Just a quick question. Obviously, one of the big challenges that we have with a lot of the biofibre and access to the biofibre is the reforestation component. I'm wondering: are you looking at a model that's based on whole log or a model that's based on logging residuals or a combination thereof?
G. Farney: It'd be a combination of both. For our mats, we need a grade of 2 or better, so we're allowed some checking. We're allowed some wane in our product specification. When you look at the ultimate goal of the bio-oil perspective, it is a whole log consumable.
It was interesting talking to Craig Lodge from Pinnacle Pellet. He utilized the analogy of being the garburator. I think we're the second garburator that creates even higher value-add to the product. And I don't foresee any competition to what Pinnacle is doing.
J. Rustad (Chair): The reason I ask is just around accessing stands and being able, as part of the business model, to cover the silviculture, the replanting and the road development and all the rest of those sorts of things that are required around that component of accessing fibre.
G. Farney: Absolutely.
J. Rustad (Chair): The other component of that. You've mentioned grade 2 or better. I'm pretty sure that's sawlog-quality wood. Of course, one of the big challenges we have right now is finding enough sawlog for all of the existing mills that we have. It could be a challenge with trying to find that component, but I understand what you're looking for.
G. Farney: Absolutely.
B. Stewart: Thanks very much, Greg. I just want to know a little bit more about Strive Energy. You've mentioned these names that you're associated with here in North America. Do they have Canadian operations, and is it publicly traded? Number of employees? Where are you kind of based, whatever you manufacture here in Canada?
G. Farney: We're a private company based out of Calgary. Our full-time employees rank in the number of about 18, 55 percent of whom are First Nations or tribal members of U.S. tribes. Our company does swell because we use a consulting model. So anytime it gets extremely busy, we do swell to about 125 people.
We've been in business since December of 2005. Our business model has always been to partner with First Nations or tribes.
From the standpoint of being public, we have absolutely no desire to go public. Our strategic intent, which is listed on our website, is to stay private as long as possible. If we wanted to conquer the industry and needed vast amounts of dollars, we probably would have to go public.
B. Routley: I'd like to know a little more about the economics of…. You suggested that anything was possible in terms of fibre supply source. Obviously, one of the things that British Columbia has a problem with is all of the area that is beyond the reach of most manufacturing plants. Most mills, for example, would like to find their fibre within 100 kilometres, and the further out you go, the more the economics become difficult.
Are you suggesting that your business would be interested in helping the province deal with some of the areas that are currently not economic for our traditional operations? If the roads aren't there, how would you propose to deal with that? Or are you thinking more, in your model, of residuals from other manufacturing activities versus actually creating a business model that goes out and rehabilitates forest land, for example?
We've obviously got this enormous area — 18 million hectares — of forest land base. A lot of it is never going to be reached unless either we find some business model or the province ponies up the money to pay for replanting some of those areas or carbon trading or some such model.
I guess I'm just trying to understand whether you're the knight in shining armour that we've been looking for, or not so much.
G. Farney: I would like to think we're good. I don't know if we're that good.
From the standpoint of…. Our sweet spot is in the $30 to $60 per metre harvested replanted. A real ideal situation would be to align ourselves with existing mills and being able to take the residual in the case of the bio-oil. As well, the mat is a nice by-product in those cases.
When you look at the volumes that the U.S. federal government is committing to over the next ten years, it becomes very viable, because they simply don't have the fibre in the continental U.S. The legislation actually prohibits the use of any food crops to be utilized in the process as well. It really limits…. It's a golden opportunity for the province of B.C.
J. Rustad (Chair): No other questions?
I have one last question. We're a little bit over time, but….
In terms of that legislation in the States. Obviously, they have fibre opportunities and things in the States, although things are a little bit different — fast-growing crops, of course, in the south, etc. Where do you see the opportunity for that type of a biorefinery, as you're talking about — production of biodiesel — down in the States versus how that opportunity looks here in B.C.?
G. Farney: You can go as far south as New Mexico and Arizona, with the Apache. They have very large timber stands. The reservations in the States are massive, so they do have access in a lot of cases to very significant timber on reserve.
In the case of the U.S. government and procurement policies, the tribes do have preferred-vendor status. So if you produce it, they take it. There is no bid process. What we've been looking at doing is working with the communities in Burns Lake and partnering them with one of the tribes that would be able to augment the fuel in some shape or form to garner that preferred-procurement status. It eliminates all those things.
As I said, there's a very significant opportunity for the province of British Columbia and the First Nations to move this forward very quickly.
B. Routley: I guess a final question. We've got all these areas where there are vast amounts of wood waste piled up on the side of the logging roads all over British Columbia. Are you suggesting that you could have some use for that and pay something for it versus right now just waiting for a fire event or…?
We've had discussion about a licence within a licence, for example. In the last legislative sitting we talked about that kind of thing. One of the issues was transferring over the ownership of the wood waste. A potential new owner would then be responsible for any fire risks once they…. Are you aware of that kind of…?
G. Farney: Absolutely. The drawback there in the economics for us is that when you're creating biodiesel or bio-oil, it's marketed on a per-tonne basis. If there's dirt in the process, it doesn't hurt it, because it does come out in the refining process, but it affects the economics slightly.
We've taken an example of what you're talking about, I think, and built business models around if it's, for instance, $40 a metre to harvest, if we worked with West Fraser or someone else, and we took $10 of the $40 and took the residual through that process. They took the balance themselves.
Everything that we've heard so far…. One of three goes to the mill. Two of the three sit in a pile. We want the two of the three. That's really what we want.
J. Rustad (Chair): Greg, thank you very much for your presentation, and thank you for your patience and ability to be able to travel here to Fraser Lake as part of the submissions. As you know, of course, Burns Lake was quite full in terms of submissions, so thank you for that flexibility.
Our next presenter is Jim Magowan with the Fraser Lake Sawmills.
Jim, welcome, and over to you.
J. Magowan: Good afternoon, ladies and gentlemen. My name is Jim Magowan, and I work as a forester for Fraser Lake Sawmills.
We depend in part on two replaceable forest licences for our log-supplying needs. One is in the Lakes TSA, and that's for about 340,000 cubic metres a year, and change. The other one is in the Prince George TSA, and that's for about 240,000 cubic metres per year.
We support the direct employment of about 400 people on a full-time basis locally. That includes hourly employees, staff, contractors — all direct employment.
On behalf of my colleagues and myself, I'd like to thank you folks sincerely for coming up to Fraser Lake to help us solve…. We've been wondering for years what we're going to do about this coming timber supply crisis, so it's sure great to see you folks come up and talk to us about how we're going to go about solving that.
As you know, the mountain pine beetle infestation has resulted in regional imbalances in timber supply throughout the northern Interior. Public investment in access infrastructure — roads, ferry crossings, that sort of thing — will provide some measure of mitigation to those regional imbalances by bringing about safe and efficient log transportation solutions to the communities most affected. And the communities here along Highway 16 west have been profoundly impacted by the mountain pine beetle infestation.
I believe, and this is my personal opinion, that further industry rationalization is inevitable. John talked about the current AAC, the projected future AACs and the number of mills that that falldown is going to impact being somewhere in the order of eight of our current, typically-sized sawmills. So public investment in better forest inventory, more detailed information in the forest industry, could contribute to that rationalization, resulting in a more efficient industry at the end of the day.
That information should also differentiate between sawlog and non-sawlog volumes so that new entrants to different sectors of the industry, like the gentleman that just presented, won't compete with one another for timber supply but could actually complement one another.
Although reduction of constraints to timber supply — for example, visual quality — won't likely free up enough volume to save a mill or to maintain the current lumber manufacturing capacity, there's not much doubt in my mind that it will lessen the impact and support more jobs in the manufacturing sector than otherwise. I don't think there is any other single option that has as much potential to do so.
That said, we must not abandon our environmental standards for the sake of timber supply. Also, objectives set in the land use planning process should be reviewed and perhaps rebalanced in light of the current and expected ecological conditions — and the basket of resource values that are out there on the land base now versus the basket of values that were there when these land use plans were developed about 15 years ago.
Finally, access to timber should continue to be based on competitive market principles. It seems to me that unilateral direct-awarded timber rights by government could create the winners and losers mentioned previously by a former presenter, without regard for operational competitiveness.
That concludes my presentation. Thanks for your attention.
J. Rustad (Chair): Jim, thank you for a brief and concise presentation. I have questions from members.
E. Foster: Jim, thank you very much for your presentation. We've heard over the last couple of days — we certainly heard today; we heard from Director Bill Miller — about timber being shipped offshore, our logs being shipped offshore. I look at…. Correct me if I'm wrong. You're part of West Fraser Group. Is that correct?
J. Magowan: I work for West Fraser, yeah.
E. Foster: Okay, good. So if you brought wood in, logs in that were being boomed out or shipped overseas, and you brought them to Smithers…. Smithers wood to Houston, Houston wood to here — why aren't we doing that?
J. Magowan: I can't speak for West Fraser on that point. I'm sorry.
E. Foster: Where would I find out the answer to that? The question keeps coming up.
J. Magowan: Sure. You could talk to one of the corporate folks — vice-president of woodlands, Dave Lehane.
E. Foster: Good. I'll do that.
J. Rustad (Chair): Good. Part of that is…. I'm sure that they'll have an opportunity to present to us with the provincial opportunities on the week of July 9. Perhaps you can pass that on to Dave Lehane as a question. That would be great if he could perhaps shed some light on that for us.
J. Magowan: Certainly.
B. Routley: As a registered professional forester that's certainly familiar with the conundrum that we have, I've got a question about…. You talked about environmental values. Someone made the point with me about the environmental values — I guess it was in the community just up the road — for example, of the old-growth retention. Obviously, that changes if the trees go from old-growth values. That really is a dead tree.
So when you speak about environmental issues from an environmental point of view, doesn't the whole issue change rather dramatically when you go from a live forest to a dead and dying forest? Do we have an obligation…? I think the mayor said that he liked green forests better than red or dead, black forests. That made a lot of sense to me.
Is it that simple? Or are you suggesting that whether it's dead or dying, it just doesn't matter, and we should leave it alone?
That seems to be a common theme I'm hearing from registered professional foresters. So you're not alone. I'm just trying to get a handle on whether it's because of the war-of-the-woods issue. And should there be more thought put into it, given the circumstances that we have — what is essentially a catastrophic event?
J. Magowan: Sure. I'm afraid it's not that simple, Bill. Someone once said: "The practice of forestry is not rocket science. It's much more complicated than that."
I guess to speak to your question: simply because a stand of trees is dead does not mean it has zero value as old growth, but the value that it contributes to that objective is different than it was prior to the infestation. That's the best I can do.
N. Macdonald (Deputy Chair): The scenarios that have been laid out for the rebuilding in Babine would not be unfamiliar to you. You've heard them; you've seen them. In stark terms, you would say that if that was to proceed, that scenario, it jeopardizes this mill. Is that the stark reality that you would lay out? Or is there a way of doing this properly or what?
I mean, the scenarios that Burns Lake, the community, is talking about would not be unfamiliar to you. So what would be the specific concerns that you have? You've sort of said….
J. Magowan: I guess the only information that I've gotten on those scenarios has been sort of anecdotal. I haven't actually seen anything official in that regard, but I guess any decisions taken to support increases in timber supply to one mill will have impacts on other mills.
N. Macdonald (Deputy Chair): I guess this is part of what I don't understand about the process. Like I say, there's been a long-term issue that has been coming for years, and presumably some work has been done on that. Then, since January 20, the tragedy in Burns Lake, presumably there were government resources that came in.
As part of Mr. Clark's work, did he ever meet with foresters in this area to talk through scenarios or to get information, or was it ministry staff that would have been speaking to you? I'm just trying to understand the processes that would allow one to reach an informed decision from the government's perspective. What's gone on here?
J. Magowan: There have been discussions at a higher level between Mr. Clark and Minister Bell and our corporate folks in Quesnel regarding the timber supply shuffle sort of concept.
N. Macdonald (Deputy Chair): Okay, and you're here to tell us from the corporate perspective or from the mill's perspective.
J. Magowan: From Fraser Lake Sawmills, specific to this operation. I guess I'd have to refer you again to our corporate folks, guys like Dave Lehane, for a response to that question.
N. Macdonald (Deputy Chair): Okay.
J. Rustad (Chair): I have myself on the list next for a question. The bioenergy project that was approved and that we're hoping to see go into place — what type of fibre do you use? Would it use just residuals from the mill, or are you looking at logging residuals or any potential whole log? What's it designed around?
J. Magowan: If we can maintain a three-shift operating schedule, we should be able to supply that operation just from sawmill residuals.
J. Rustad (Chair): So if you needed to go down from three shifts, you would have to be looking at some sort of supplement around it or changing the scope of the project.
J. Magowan: Yes.
J. Rustad (Chair): Okay, that's good to know. It's a nice project. I hope to see that built.
J. Magowan: We're very excited about it.
J. Rustad (Chair): Yes. Any other questions?
B. Routley: Again, I'd be interested in the planning processes. If all of the mills up here are aware of the coming crisis…. Obviously, there were extra shifts put on in some cases. We've heard in evidence of witnesses that there are some cases where mills are economically viable on a one-shift basis, and obviously, more so on a two-shift basis.
Has your company got any kind of plan to…? As the timber supply is more and more constrained, do you know if they have any kind of a shifting strategy as far as reducing the number of shifts, or has there been any talk between all of these companies about having an orderly transition in reducing shifts?
J. Magowan: Not at my level.
J. Rustad (Chair): I have one other question as well, and that is around low-volume stands in the Lakes TSA. We're operating down to 140,000 that's contributing towards the annual allowable cut. In the Prince George TSA, I think it's 180,000 that's contributing towards the annual allowable cut. Of course, down in Williams Lake, they're down as low as 65,000, I think, contributing towards their annual allowable cut in terms of how they operate.
The terrain between Burns Lake and here in the local area around Fraser Lake is very similar. Obviously, Prince George is a much larger area, and there's quite a variance in terms of how that is.
In terms of operating with the wood that you're looking at in your cut in the Burns Lake area that you can go down to 140,000, is it feasible for you to be looking at that same option in some of the areas in here, in particular in the areas that are close and around the operations around Fraser Lake — to be able to operate in that wood down to 140,000?
J. Magowan: We already are, John. We're down to 120,000, particularly where it's close to the mill. The access infrastructure's already there. We're already exploiting that opportunity.
J. Rustad (Chair): Good, and that's great to hear. I guess the question I have, of course, is around that not contributing towards annual allowable cut. How does that calculate in terms of when you report and where you get your wood from and your licences and those sorts of things.
Right now, of course, stands that are only above the 180,000 cutoff are contributing towards the annual allowable cut. If you're taking stands that are below that, does that sort of count towards your licence within this area or is that…
J. Magowan: Yes.
J. Rustad (Chair): …an opportunity licence, or how is that?
J. Magowan: It's all billed to our AAC on the replaceable licences.
J. Rustad (Chair): How much wood of that 240,000 that's in Prince George do you estimate you're taking that is below that cutoff level — 20 percent? Ballparkish.
J. Magowan: I'm going to say 30,000 of that 240,000.
J. Rustad (Chair): Okay, so it's about 10 percent then — 10 to 15 percent that is in that. Still, that's pretty significant in terms of what that opportunity is.
So you're looking just at the stuff that is economical, that is fairly close to the mill. How far out do you think you could go out and still be economical in terms of going after wood down to that 120 range that you just mentioned.
J. Magowan: I can think of one cutting permit off the top of my head that was about 50 kilometres from the scales.
J. Rustad (Chair): So about an hour and a quarter, an hour and a half cycle time.
J. Magowan: Yeah, about that.
J. Rustad (Chair): Interesting, good. That's encouraging.
Any other questions from members? I have one last question, which of course is around area-based management from volume-based management in terms of how your licences work. Obviously, in the Prince George supply area that is a much more complex question than it is in other supply areas because of the number of players and the size of the sales and all the joy that has been built up over a number of years associated with the supplier.
In general, if you had an opportunity to have area-based as opposed to volume-based, would you be interested in that approach?
J. Magowan: With the current timber supply situation, an area-based tenure…. There's no question that it provides the tenure holder with the incentive to invest in improving the timber supply. It just takes a while for those investments to start returning cubic metres.
J. Rustad (Chair): Yes, ten to 20 years.
J. Magowan: The impact in the short term is that it's pretty tough to envision how we would continue to operate with an area-based tenure that doesn't have a lot of available timber supply on it.
J. Rustad (Chair): In other words, you're interested in area-based as long as it's not all dead.
J. Magowan: That's right, yes.
J. Rustad (Chair): Thank you for that.
Okay. Any other questions from members?
Jim, thank you very much for your presentation and for the information and for taking the time to come and present to our committee.
That is the end of the list of presenters that we have for the community. At this time I'd like to offer an opportunity for open mike for anybody that would like to come up and present us with some thoughts or share some ideas or concerns.
A Voice: Sing karaoke.
J. Rustad (Chair): No karaoke singing. Sorry.
Okay. With that, I want to remind people that there is still an opportunity for written submissions to the committee up until July 20. That'll be the cutoff for that. People can go to our website, www.leg.bc.ca/timbercommittee. You'll find a host of information, all the background information that the committee had received to help us get up to speed with a number of the issues as well as breakdowns for each supply area — and, of course, the link there with how you can send us in some information.
Our next meeting will be tomorrow morning at 8 a.m. in Fort St. James.
With that, I'd just like to give a final thanks again for our Hansard crew, for our Clerk and the Clerk's office, in terms of their work for and support of our committee — and certainly, of course, all the ministry people that have been supporting us through this as well and providing us with all the background information.
I can't remember. I think, actually, I forgot to introduce Larry Pedersen, our special adviser, who is travelling with us through here as well.
A Voice: The chief forester.
J. Rustad (Chair): And Dave Peterson. Yes. Well, he's part of the ministry staff. It could go on and on. There's no point delaying this.
Thank you, once again, very much for attending, and the meeting is now adjourned.
The committee adjourned at 4:49 p.m.
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