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
MONDAY, JULY 9, 2012
The committee met at 9:29 a.m.
[J. Rustad in the chair.]
J. Rustad (Chair): Good morning, everyone. Welcome to the meeting of the Special Committee on Timber Supply. My name is John Rustad. I'm the MLA for Nechako Lakes and Chair of the committee.
I thought I'd start off with introductions, starting with Bill on my left here.
B. Routley: Good morning. Bill Routley, MLA for Cowichan Valley.
N. Macdonald (Deputy Chair): Good morning. Norm Macdonald, MLA for Columbia River–Revelstoke.
B. Stewart: Good morning. Ben Stewart, Westside-Kelowna.
D. Barnett: Good morning. Donna Barnett, Cariboo-Chilcotin.
E. Foster: Good morning. Eric Foster, Vernon-Monashee.
J. Rustad (Chair): Travelling along with our committee and doing some of the work with our committee are two special advisers, former chief foresters Larry Pedersen and Jim Snetsinger. As well, to my left here is the Deputy Clerk and Clerk of Committees, Kate Ryan-Lloyd. At the back we have Morgan Lay, who is also assisting our committee from the Clerk's office.
For anybody who's doing presentations, please make sure you check in with Morgan so that she can let us know if you're here, in case we need to do some juggling with the schedule.
Also, for anybody who is listening to this or anybody here in the meeting, everything that the committee does is broadcast live on the Internet, and it's recorded by Hansard Services. Today we have with us Michael Baer and Monique Goffinet-Miller. They've been great in terms of the amount of work and effort they put in. As you can imagine, the committee has had some rather long hours in terms of the tours and the schedule. Everything we do, they have been doing. But on top of that, it takes them an extra hour to set up and take down and all the rest of those sorts of things. We're very appreciative of the work that Hansard has done through this tour.
As I mentioned, everything that we do is broadcast onto the Internet, and we have an opportunity not only for the submissions through the live process of the committee…. This week we are in Vancouver for the 9th, 10th and 11th, and on the 12th we are up in Merritt and Kamloops. In previous weeks we've been along Highway 16 from Smithers out to Valemount, including Fort St. James and Mackenzie. Last week we were in the Cariboo from 100 Mile House back up to Prince George, including a field day as well.
On top of that, people can give us a written submission up until July 20. They can go through our Internet site, which is www.leg.bc.ca/timbercommittee to find the process and stuff for delivering those written submissions.
The consultations and the process of this committee were started back in May when the committee was struck with a mandate to look at mid-term fibre supply associated with the mountain pine beetle–impacted areas. The mountain pine beetle, of course, has done significant damage to our mature timber. It's estimated that over the life of the pine beetle epidemic, when it's run its course, we could be looking at a drop of about ten million cubic metres per year in terms of our annual allowable cut. To put that in another perspective, that's enough wood to feed about eight fairly reasonably sized sawmills.
The committee has been mandated to look at any possible opportunities to mitigate some of that timber supply problem. Through that process, of course, we have gone out to have public consultation to learn what sort of values people have throughout the community and to ask a number of questions. What are the values and principles that should guide decision-making regarding potential actions of mitigation of the timber supply impacts? What specific information about local areas should the committee know and consider, and what cautions and advice do you have for this committee in considering whether and how to mitigate timber supply? The process that we're going through has been fairly extensive to date. We have to have a report in to the Legislature by August 15.
With that, being in Vancouver, we're going through a process where we will have presentations by provincially oriented groups as well as some others that may come forward. Each of the presenters has half an hour. They can decide how they want to use that time in terms of making the presentation or allowing some time for questions and answers. We probably recommend that you leave some time for questions and answers through the process, if you can.
With that, we'll start with our first presenters, which is the Association of B.C. Forest Professionals. Steve Lorimer and Mike Larock, over to you.
S. Lorimer: Good morning and thank you, members of the Legislature, for this opportunity to provide testimony to the Special Committee on Timber Supply. The special committee, I know, has acknowledged First Nations, and we would also like to recognize that we are on the traditional territory of the Musqueam, Squamish and Tsleil-Waututh First Nations.
I am Steve Lorimer, registered professional forester, and I am the current president of the Association of B.C. Forest Professionals. The president is an elected volunteer position within the regulated profession of forestry. I am joined today by Mike Larock, also a registered professional forester and the director of professional practice and forest stewardship with the ABCFP.
I'll begin by speaking this morning about the context of the subject, and then Mike and I will provide you with three areas that the profession believes are important considerations for the Special Committee on Timber Supply.
B.C. has always been known for having diverse ecosystems, including 16 distinct climate zones that support more than 50 tree species, 3,000 known plant species and three-quarters of Canada's mammal species. More than 20 are found nowhere else in Canada.
Many years ago there was an intense disagreement on how forests were to be managed in British Columbia. B.C. was known as a vigorous timber-processing sector, built upon sustaining a flow of timber from the woods.
Global markets responded to the divisive perspectives regarding harvest and forest use in the province. B.C. was caught between the differing views that saw forests either as ecological entities of biological diversity, habitat and watersheds stretched across a landscape or as trees for timber, operational processes and wood products that fit within a manufacturing infrastructure.
Forest professionals understand all these views and recognize the need for balance in management planning. In those years forest professionals assisted the government in establishing landscape resource plans to help identify the goals and objectives for forest resources.
From that point onward B.C. achieved a remarkable record of global leadership in sustainably managing forest resources. We are a primary contributor to environmental responsibility, and our wood products are accepted as wise ecological options in the retail community around the world. B.C. has just 25 percent of Canada's forests but has 50 percent of the country's forest professionals.
Even with our successes, we are aware that characteristics such as adaptivity and stewardship principles require constant vigilance. We are also aware that forest management and the use of forests in B.C. are known to have broad importance to the national and global communities and to the future generations of British Columbians. We know that the world is watching how B.C. will solve the current problems in the aftermath of the epidemic of the mountain pine beetle.
The ABCFP chose to make a presentation because we believe it is very important that you understand three fundamental factors when considering the forest and timber supply.
M. Larock: Our first point is that forest professionals should be used in making the decisions when it comes to forest management. We work and provide our professional expertise in the wise management of B.C. forest resources.
The Legislature created the practice of professional forestry in the forestry profession in 1947 because forests, forest lands and forest ecosystems are such a dominant and important part of the province. As a result, today the profession of forestry in B.C. is regulated like the College of Physicians and Surgeons, the Law Society or the Association of Professional Engineers and Geoscientists of B.C.
One unique aspect of the Foresters Act is that we are required to advocate for good forest stewardship. The ABCFP is the regulator of the forest professional and the practice of professional forestry. To become a forest professional requires strict post-secondary education and mentored experience before being allowed to practise independently.
Licensed practice ensures that all professionals apply their knowledge to a predictable level of accuracy and consistency. We also ensure that competency is maintained through professional development, discipline programs and practice guidance. Through these practices the ABCFP provides skilled professionals to work within the forest environment.
In addition to those mandatory practices I mentioned, forest professionals, along with professionals who work in the forest, are bound by professional reliance. Professional reliance is the act of relying upon the judgment and advice of professionals who are responsible and can be held accountable for the decisions they make and the advice that they give. It's often identified as one of the cornerstones of FRPA, or the Forest and Range Practices Act.
However, professional reliance is not unique to forestry. It occurs in many areas of society where professionals are relied upon and therefore takes many different forms. Some pieces of legislation are very prescriptive, and they identify where and how professional work will be applied. The Workers Compensation Act is an example of this prescriptive legislation. The Forest and Range Practices Act, on the other hand, is non-specific. It doesn't lay out how professional work is to be done, and there is no mention of the role of the forest professional. Instead, it relies on the Foresters Act for these specifics.
Professional reliance is more than simply expecting an individual to competently apply a standard, practice or rule, and it includes the expectation that the professional will take into account a wide range of circumstances and interests and will balance them within the legal construct where they practise.
Over the last decade the forest health catastrophe and the epidemic of the mountain pine beetle in our forests are a stark reminder about the serious and complicated conditions that are present when managing natural ecosystems. Applying an ecological science amid social values, changing expectations and economic parameters is what forest professionals understand and do on a regular and consistent basis.
The second point we'd like to illustrate is that forest management must focus on all the values important to British Columbians now and in the future. Managing forest ecosystems is a very complex and complicated process. The science incorporates a large number of variables like soil, nutrients, vegetation, moisture and climate, all of which are in a constant state of change. The number of social, ecological and economic issues arising from managing forests is interdependent and so complicated that it's actually easy to lose sight of the goals and objectives originally established for those forests.
Many values from B.C.'s forests are commercial. However, ecosystem services also play an important value. Forest values include, but are not limited to timber, fibre, bioenergy, water quality and regulation, fish and wildlife habitat, carbon sequestration, viewscapes, recreation, tourism uses and non-timber forest products such as mushrooms, botanicals, herbs and shrubs. These values will vary from area to area, watershed to watershed and community to community.
It's easy to be drawn towards one or two values that demand immediate attention and lose sight of the full suite of values that we rely on from the forest. In order to keep these values in proper perspective, what's required in the practice of professional forestry is a principled approach to managing forest resources and solving the complex problems. This means that it's good for forest professionals to constantly collect current information on forests, to revisit assumptions, analyze new information and adapt management using thoroughness of the information.
At this point I'd like to share a story with you from my own personal experience as a forest professional. I began my professional career 31 years ago, and I spent the first fall and winter in the forests of the Bell-Irving, the Bulkley and the Lakes District searching for and treating trees for the spruce and the mountain pine bark beetles. The Forest Service had purchased new colour aerial photographs taken early in the fall when the flush of red trees was at its maximum. Forest professionals probed large tracts of forest to find clusters of infected trees, and then a small army of workers came afterwards to cut down those trees that were infected, burning them in piles to prevent the spread and buildup of the insect population.
On one of these beetle probes, after being flown a great distance by helicopter, I came across a cabin in the forest. The door was open. I went in, rested for a short while and recorded my presence in what was a cabin diary on a makeshift desk.
Some months later the cabin owner sought me out in town at the Forest Service. He was very concerned about the dozen trees that had been cut down and burned within his area of the forest, because our intrusion was not natural and the small number of beetle-damaged trees was natural. He was in fact a squatter on Crown land, and he had dedicated significant time and resources to that personal spot in the forest. His perspective was narrowly focused on one value in one time at that one place.
We did not treat any other trees in that hundred or so hectares until 25 years later when the majority were killed by another wave of the mountain pine beetle and other forest professionals were managing the latest infestation.
The point of my recollection is that the squatter on public land was only interested in the one single value at a point and a place in time. He failed to consider the broad implication of values over the land. My goal in this story is to keep you, the MLAs, from acting in the same manner as the squatter.
We need to be disciplined in our approach when confronted with ecological problems and to keep our focus on all the forest values. An informed and principled approach to management will continue to ensure that B.C. forests consistently deliver all the values important to British Columbians. It is important that the management of forests focus on these values. Forestry is conducted on very long, hundred-year time frames or more. While it is easy to be caught in the moment, it is dangerous to be in the moment when it's not fundamental to the success of forest management in the long term.
S. Lorimer: Our third message is that we must ensure that we are managing our forests to meet the needs of the present without compromising the ability for future generations to meet their own needs. By focusing on just one or two end products, we can lose sight of the forest, the very living thing that provides a majority of our benefits in B.C.
The forests of B.C. are a renewable resource if managed properly. Forests are sustainable when they have the capability to endure and maintain healthy communities, resilient ecosystems, and when they maintain the values of our society. Forests are so fundamental to sustainability that this discussion on timber supply needs to consider the forests first. There cannot be a simple quick political fix to this natural disaster that has been in our forests for over a decade.
Forty years ago I graduated from UBC and began my career as a forester. The first job I had was timber cruising. I can't help but point out that in the back of the room is a timber cruiser that I worked with. I don't know if he's making a presentation or not, but I haven't seen him for a few years.
In any case, the company I worked for was interested in getting better information about our forests within their tenure so they could determine how best to manage their business over both the short and the long terms. Knowing the type and volume of timber currently in the forest let them plan for sustainable use of their future tenures.
A few years later I was working for a different company in a different part of the province. I was involved in developing a large reforestation program and, coincidentally, harvest planning in pine forests that were showing significant mortality due to the mountain pine beetle. This was back in the early '70s.
Again, there was a focus on short- and long-term management, as we were interested in both harvesting of the dead and dying pine as well as reforesting all harvested areas to ensure we had enough trees to ensure continuing forest productivity over the longer term.
Later still came the war in the woods. Values and expectations from our forests were changing. Land use planning processes followed, and stakeholders with ranging interests were invited to participate in the process to identify values to be considered in the management of our public forests.
Society changed which forest values were important through these planning processes, and we as forest professionals changed along with them. But we still looked to manage forests sustainably. Sustainable management, including a variety of values defined by society, was the goal which I believe continues to this day.
In summary, some hundred years ago, out of concern for dwindling forest resource, the B.C. government of the day continued to retain public ownership of the forests and established the first Forest Act and an agency to guide the management of the forests. Today we ask you to look 100 years to the future, when future generations and industries will be the recipients of our forest management decisions and actions, and ask yourself: "How will our forest management actions today be judged?"
J. Rustad (Chair): Thank you very much for your presentation.
B. Routley: A couple of questions. Is the short answer to your presentation: if it's not broken, don't fix it?
S. Lorimer: I'm not sure it's quite that easy, Bill. I think what we're trying to say is that actually, there are a lot of issues surrounding this whole question and that there needs to be the best use of resources to address those questions, one of those being that there are some 5,500 forest professionals in the province.
You've got an excellent source of people that are professionally qualified, who have taken the time to get the education and experience to help learn about forests and forest issues. There's an opportunity to use those in seeking advice and ultimately making some of the decisions that are out there.
B. Routley: I'll just throw out my other two questions. I was wondering if you could articulate exactly what the vision is for our forests that we're currently following. Is there a mandate for the current vision of how we plan our forests that you know about? If so, could you tell us what it is?
The second part is climate change and adaptivity. You talked about adaptivity. Does what we're doing in any way potentially have impacts as a result of climate change?
S. Lorimer: I think I'll deal with the climate change question first. Really, I think we have to, again, look to the people that have expertise in this area. It's not what we're doing to climate change. It's what climate change is doing to us in terms of the specifics of forest management. Again, there is expertise out there, and we need to seek that.
I can't remember what the first part of the question was.
B. Routley: The B.C. vision.
S. Lorimer: The B.C. vision? Well, I can tell you that the association has a vision, and that is that we lead the way to diverse, healthy and sustainable forests for British Columbia. That's what we are here representing today, and that would be our vision.
J. Rustad (Chair): Sorry. I forgot there was one other individual who was not introduced earlier, MLA Harry Bains. I didn't have the opportunity earlier.
D. Barnett: Thank you for your presentation. I thank Mike Larock for following us throughout this province, so he's got a very good insight into what has been going on for the last week to two weeks.
I just have a couple of questions. One of them is the issue of the health of the forests. That is a big concern and has been for many years.
I happen to live in pine beetle country and do understand it quite well. We never allowed selective logging in parks. Do you believe as professionals that it is a wise decision to lock land up, such as forests, when we know there is management that should be done to look after the health of the forest, and when it's diseased that we should go in and manage that? Do you believe we should be doing that?
M. Larock: The profession itself has many experts to be able to help and assist. We believe we should be managing forests. So if those forests' primary use is park and recreation, then that's included in the definition of the practice of professional forestry.
I think one thing that's lost and sort of a myth is that to do nothing means nothing changes. But in fact, sometimes you actually have to manage the forests in order to keep the values you want to maintain, even if it is a park.
I think Tweedsmuir was a good example of that.
D. Barnett: Thank you. And Schoolhouse.
The next question I have is: what is your opinion, as professionals, of area-based tenures?
M. Larock: I'll go first. I think to the profession itself, it doesn't matter where the ownership of the land is. It could be private, Crown, other. The legislation applies broadly. The first question, as you heard from previous speakers, was to ask: what do you want from your forest? That would occur if it was on area-based tenure or volume-based tenure.
N. Macdonald (Deputy Chair): Again for Mr. Larock, compliments on the journey you took. You were at every one of the meetings we had in all of those communities. I know we had people organizing that trip for us, but for you it was a complicated process. I just appreciate you being there.
I think that for Ms. Glover and for Mr. Lorimer, as well, we would have expected professional foresters to take a leadership role, and you have. Even though there was an expectation, it's heartening — the work that you've done, how you've entered into this discussion.
I think one thing that Mike would have heard in communities is just that the expertise of forest professionals was recognized in communities. That came up a number of times from people who weren't forest professionals. They said that we have expertise here, and we respect that.
You've laid out pretty clearly the position of forest professionals here. Specifically to Mike: was there anything that you picked up in terms of themes from the community meetings? Or were there any things that were surprises? I guess just an overall view of what you heard that you might want to reinforce with the committee, or maybe it's something we didn't pick up that you think needs to be reinforced. Any thoughts on that? That would be my first question.
M. Larock: First of all, I have a deep respect for what you guys are doing in terms of your travel. I got to sit in the back of the room, but you were up there all the time. It's been a very good process, and it's been very interesting to follow. It is sincere by the members, the MLAs. It's really good to see, as a citizen.
I think one of the surprises was that there are not enough forest professionals. You weren't able to hear from enough. I think, dependent upon their business area and where they were working, they might have felt they didn't want to participate. So in a couple of the communities there was a very low number of people. But by and large, the leaders in the profession were able to come and speak to you, and there wasn't any limitation in that regard.
I think that's about all I would add, Norm.
N. Macdonald (Deputy Chair): What about from people who weren't professionals but were there as citizens or from different aspects of forestry? Was there anything there that stood out as a theme from what community groups were saying, for instance, or local government? Not to put you on the spot. I mean, it's a lot of meetings. Was there anything that struck you or any surprises in particular?
M. Larock: With all due respect, I think I'd prefer to probably keep those — being in a position of working for the profession.
Some of the general things were that I was happy to see regular citizens come out. I noticed the variety. In some communities there weren't many; in other communities there was good organization. It didn't seem to matter whether it was early on in your trip or later. I would like to have seen better opportunity for more forest professionals to be there, and we certainly encouraged them to be there as a profession.
N. Macdonald (Deputy Chair): I guess, for Steve, just one final question. Area-based tenure was one of the elements within the terms of reference here. I guess the question I've asked in a few communities…. There are a lot of anecdotal comments on area-based versus volume-based, but people have not been able to identify the academic studies that one would presume would inform a conclusion on area-based or volume-based. I think, Mike, you've laid out your opinion.
Is there a body of academic work that would have looked at that question and would provide evidence that was based on a study rather than anecdotal? Is there any work that you're aware of?
S. Lorimer: Well, that's an excellent question, Norm. I'm not aware of anything that I can point you to at this point in time. It's an intriguing question, and it needs to be looked at not only in terms of area versus volume but in terms of the benefits and values that are being addressed in the term. There are so many things in there.
I could make an argument, I guess, for either of those tenures, and it could be fairly persuasive, I think, depending on what side one was arguing for. I think you have to really look at the specifics of each situation to determine whether it's something that may be beneficial. What are the goals? That sort of thing. Again, we come back to…. There are many local people that are professional, who understand the specifics of those areas and would probably be able to best answer that type of question for those specific areas under the circumstances that they are really involved in.
J. Rustad (Chair): We've got a number of other people that would like to ask some questions, and we are just about out of time, so try to keep questions and, if we could, answers brief.
I've got myself on the list next. What are your thoughts about shortening rotation periods? Intensive silviculture management, looking at the land base and managing areas — not all areas perhaps, but designating areas as a working forest or a more intensive forest management regime with a goal of shortening rotations and accessing more fibre off of the land base, that specific land base? What are your thoughts around that?
M. Larock: Well, Steve and I are both silviculturalists. That's one of the variables you can move in order to grow trees. Increase spacing, and the maximum amount of biomass that will grow in a site will grow there in a shorter period of time, and therefore more fibre will become available.
Now, that's just looking at that one value. Harkening back to the squatter, we'd have to think about lots of different things because there is more that we are affecting than just by creating a fibre farm. And there's a bigger landscape. So how would we plan to change those things — you know, the size of the area?
S. Lorimer: The only other thing I'd add to that, I think, is you have to put it in…. It's sort of following on Mike's comments. Put it in the context of integrating the social, environmental and economic aspects of that. If you're going to practise an intensive level of silviculture that is beyond the economic realities of the gains that can be made, you have to be very careful. Then you're starting to cross over into the....
J. Rustad (Chair): And the second part of the question with that is…. Back when we had the war in the woods in the 90s, we had about 6 percent of the province in park. Today we've got about 15 percent of the province in parkland. We've taken rather large tracts out of the land base. Of course, there's rock, lake and other things that were added into those sorts of things.
But in general, when you look at that, where you've got 15 percent of the area that is managed specifically for preservation, would you contemplate the idea that we should have a similar amount of area that would be set aside for intensive forest management and capturing other values as a secondary, as opposed to what we have today where we're trying to capture, in most areas, all values on every hectare?
S. Lorimer: I'd just say that's one of the options you can look at. A previous Minister of Forests floated an idea about a commercial forest reserve at one point in time, which is kind of what you're getting at. It's something that could be looked at. It has to be looked at in the context of, again, the broader issues — the social, environmental and economic aspects of what that might do.
J. Rustad (Chair): Just a final question, if I may have the committee's indulgence, also around the area-based management. Our committee is focused on looking at the timber value and how to mitigate the mid-term fibre supply. Do you know of any models in a volume-based or in an area-based that are able to achieve higher rates of return in terms of fibre productivity off the land base? Which of the two models do you think has the ability to produce higher levels of fibre return?
S. Lorimer: Just so I understand the question. You are talking about the models being area-based and volume-based?
J. Rustad (Chair): Yes, from a fibre perspective. I understand there are other values that need to be managed on the land base, but we are tasked with looking at our mid-term fibre supply and how to potentially expand it.
M. Larock: I would say that the type of tenure is…. It depends on the money you're investing. It doesn't matter whether it's area-based or volume-based. If you plan to invest a certain amount of money as the owner of the resource, then you can achieve various amounts of productivity — no investment. So it wouldn't really matter. It matters around the size of the investment, which I guess is the question around the motivation. Is one more motivating than another?
J. Rustad (Chair): Thanks. Two other quick questions.
B. Stewart: Good. Thanks very much, Mike. Thank you for taking the time to follow us around. You've heard all the commentary, and I guess you can get a chance to read it.
I have, obviously, a lot of respect for the profession. I think that when it comes to Ministry of Forests, they also employ professionals who are challenged with the obligation and responsibility of managing the forests for all the values that you point out. I don't think they necessarily look in isolation. Of course, that's been changing over time, as you've probably found out in the profession in the last number of years. I mean, there are these different values that we have to manage.
The responsibility here is to come up with looking at all of these different competing interests and try to deal with a particular issue, which comes from an epidemic. I guess what I would kind of hope is that the professional foresters would come forward knowing that some of these things could have perhaps been changed by other actions. Looking back at what decisions we've made, what's the pathway forward? That's kind of where we're at.
I guess really what I'm thinking is that at the end of the day, based on what we hear here, we will go away and have to make some recommendations based on what we think are going to be the palatable, reasonable kinds of things — to make certain that all of these competing values are going to be taken into account, knowing that a lot of the decisions that were made about land use plans were around protecting those other values; to make certain that wildlife, especially the ones that are supersensitive, need to be taken into account, that we don't wipe out a species entirely just because we want the fibre. Right?
Some of the other things that I know you probably look at are the utilization of the fibre basket and what we see as not being utilized. I think those are other opportunities. I guess I'd like to kind of, from a professional point of view…. We've been looking in areas such as Donna mentioned about maybe selective logging in some of these areas.
The change that has occurred…. We have a lot of dead pine still out there, not necessarily economically harvestable. In some cases some of these areas, visual-quality corridors and other areas, are in those areas. Is it, I guess, the profession's considered opinion that we should be looking to those areas?
Would it be better for the forest if we were to go in, in a TSA by TSA, area by area, and do selective harvesting to be able to look ahead, reforest — and make certain that we're aggressively managing towards the mid- and long-term timber supply? What's the professional opinion on the go-forward strategy here, being that this is your chance to tell us?
M. Larock: I guess I'll start. As you've heard from a number of different people over the last few weeks, it's a really complicated structure and question. It's hard in half an hour — or in some cases, for some speakers, only 15 minutes — to try and cover it.
We do have a mid-term timber supply report that we did, which gathered not only experts but questions for our members, questions that the chief forester was asking at the time. As well, we produced reports on inventory not only in 2006 but a follow-up last year on what can be expected and what should be done relative to the inventory.
I think the information is being produced, and it is there. It's not quite the process to be able to answer the question: what should we do? But I do understand that's the question you're wrestling with.
The other thing is that I think another thing you've heard is that the trees are dead. Some of the trees are dead, and we're still learning about how many are dead, but the forests aren't dead. Sometimes we look at the forests from the perspective of a human being, and we look at the value of wildlife habitat from the perspective of a human being. But the forests haven't changed for the wildlife in the same way they've changed for the human being. I think that's an important factor — that it takes a long time to understand the scope and scale of that perspective. It takes many years of walking in the woods.
J. Rustad (Chair): Harry, last question. Be brief, please.
H. Bains: A couple of quick questions. Thank you, first of all. I also want to add my voice and respect that I have garnered for the work that you do ever since I was appointed to this committee, reading your reports and participating in these committee hearings. This is now — I don't know — 12 or 13 different meetings that we've held, and you were there, Michael, at almost every one of them. I think all of them.
One of the responsibilities that this committee has is to deliver recommendations to mitigate the mid-term timber supply effects. To me, that is how we mitigate job losses in those communities that are forestry-dependent. Reading from your mid-term timber supply reports and many others, there are questions being raised about what we know before we make that decision and whether we have sufficient information. I think Ben touched on it a bit.
How do you as a professional association — if you were sitting in our chairs here and making that recommendation, not knowing exactly what's out there — make a recommendation on how to mitigate the loss in the timber supply? That's a quick question.
The second one is…. I think in one of the meetings, at least — I don't know whether the person was on record or if he pulled me aside — there was a question raised. I have a lot of respect for your association, because you play a vital role in managing our forests. I think this is the question he raised. Most of the professional foresters are employed either by industry or by the ministry. He said: "Who is advocating for the forests independent of their responsibility to their employers?" That's the question.
How do we take your report to say that that is an independent report and actually does not serve the industry or the ministry, keeping in mind that it's not clouded by those responsibilities behind your jobs?
S. Lorimer: I'll try the last question here with respect to that. Yes, many people in the association work for industry. Many work for government. There is also now a burgeoning number of members that are actually independent consultants. So they may work for government today, and they may be working for industry tomorrow, or whoever their consulting allows them to work for or that they're qualified to work for. So you do have that broader aspect.
The reports that the association does are done with input from all of the members, or opportunity for input from all of the members. Obviously, 5,500 people don't get directly involved in the report, but there is opportunity for members that are qualified and/or have expertise in the area to participate. They come from basically all the aspects of the forest association, which includes the government, industry and consulting and also academic people as well, and even some non-government organizations as well.
M. Larock: On the first question, how we would go about getting additional information…. The reason why we did these reports…. Some of them are large, like the inventory one we did. Others are trying to gain perspectives from our members on what tools are available for them to use over the course.
One changed recently. It has been in research. The question to our members is: are you getting the information you need in order to adequately practise? When you think about the practice of forestry, say, it's different from agriculture where it's a crop every year. It's possible that the professional forester who begins the prescription prior to harvest will never know or never see the professional at the end who says that we've achieved objectives.
There's a large amount of time in between that has happened. There's also a large number of specialties. That activity goes on for a long time. The trust between professionals who you know and who you may not know, as that trajectory that occurs over 20, 30 or 40 years, is really important.
That's why all the pieces go together, whether it's the information we need to be able to adequately do a job, or it could be in the form of information on the forest itself, like inventory of vegetation or the species that occupy it. Or it could be the results of activities that we've done in the past. How do I learn as a practitioner in order to be able to apply it correctly in the future?
That cycle of knowledge is really important to maintain. That's what the profession tries to do and why we put out those reports that show areas of concern — to pay attention to that cycle of information.
J. Rustad (Chair): Thank you very much for the presentation, and to committee members, I apologize for going over in time for this, but I thought it was important to be able to start this off well with the presentation. So thank you very much for your presentation and for the information you provided.
Our next presenter will be Vicky Husband.
V. Husband: Thank you for the opportunity to speak. I'll put up my clock. I'm not sure how much time you're going to give me.
As you know, my name is Vicky Husband. Some of you I know from a long time ago, and some of the presenters I know as well.
I've worked full-time on conservation issues in B.C. for over 30 years and have always represented the broad public interest in conservation. I've participated in many land use processes. I was involved in the CORE process on Vancouver Island. But way beyond that, I worked with people who were involved in the Cariboo-Chilcotin and the Kootenays and in the north. So I have a broad range of experience.
They were often divisive and challenging processes. They required huge trade-offs mostly, from our point of view, for the environment, but we recognize for other sectors as well. We always feel the environment or conservation takes the hindmost. It always does. It took many people many years to come to these careful agreements. To renege on these agreements, which would be part of what this committee is looking at in opening up the forest reserves, would be, in our opinion, a betrayal of the public interest and the public trust.
We have agreed on a land use plan in these areas that includes forest reserves as a critical component. Why are we considering throwing out that plan?
I'm appearing before your committee to tell you that I'm strongly opposed to logging the forest reserves — that's probably not a surprise — in the central Interior of B.C. or anywhere in B.C., because this has an impact. Your decisions and recommendations from this committee have an impact on the whole province. We're already seeing it in the area of Harrison Lake, an increase in logging in reserves. What you decide sets a kind of scary, dangerous precedent.
A critical component of your committee's mandate, I noted, is maintaining high environmental standards and protection of critical habitat for species and key environmental values. It talks about the optimal health of communities and as orderly a transition as possible to post-beetle cut levels, and maintaining a competitive forest industry. I'd like to address most of those points. You as a committee have a real opportunity to provide leadership on this.
Ninety-four percent of B.C. is Crown land. It is the public's land, and it also bears First Nations rights and title. Whether or not it sounds like a cliché, the fact is that these lands and forests actually do belong to future generations. We should think: in looking back a hundred years from now, would they say we've managed our forests well? Unfortunately, I would say that we haven't.
That is my experience. I'm 71½ years old. I've been here a long time. I've watched. I know what the forests were like as I grew up on Vancouver Island and beyond. From many points of view and what I hear from the public, they are not happy with present management or past management. So future management is what we're looking at as well.
The public expects stewardship of these lands. It expects competent long-term planning. That's at landscape-level and area-based planning. Communities are increasingly, I would say, fed up with short-term decision-making, political expediency and lack of community say in the process — not in your process but the broader process of forest management.
There is an elephant in the room. That elephant is mill overcapacity. The industry overbuilt as a response to the increase in the annual allowable cut in order to salvage wood from the mountain pine beetle infestation. That doesn't mean all of those mills will survive when we've overcut to such an extent and there is falldown. We've always been dealing with falldown, because generally, in my experience, provincewide it has not been a sustainable rate of cut. As was mentioned previously, we haven't always managed for all values. I would maintain that we still are not doing that.
The result was a perfect storm of events: beetles ravishing one billion mature pine trees and an industry building supermills and logging like crazy. Everyone knew it couldn't last, and we've known this for a long time. It seems like we're coming to the end and suddenly trying to find a band-aid solution. Even though the government has known this train was coming down the track, nothing substantial has been done to deal with it.
I would submit that this is an ill-conceived, desperate, last-ditch effort to do something about finding any last vestige of standing forest to log. This will certainly have negative effects, I would say, on the industry, the communities and the environment.
The government is claiming to care about sustainable forest practices, but opening up the forest reserves to logging, because of overcutting into the mid-term timber supply during the beetle-kill period, is not sustainable.
Any increase in the annual allowable cut is certain to give B.C. forest companies a black eye with certifiers that they have worked very hard to get on board. The public, environmentalists, forest professionals and, may I say, the U.S. softwood lumber industry — and I would say even Europe or anywhere — are watching. I've heard that the world is watching.
What we certainly don't need is another war in the woods — I was there for the last one — at home nor markets campaigning against our lumber abroad.
Quoting John Innes — I saw this in the Sun — the dean of forestry at UBC, logging in the reserves "could be at the expense of sustainable forests" and would be a "pretty regressive step in forest management."
These forest reserves were put in place not for one value — and I've heard this from many people in the area who've worked on these issues — but for many overlapping values — old-growth management areas, visual-quality objectives, wildlife habitat areas, riparian areas. They protected a whole range of interests from critical fish and wildlife habitat….
These reserves were put in place to protect threatened and endangered species or species at risk as well as critical winter range, connectivity, water quality, hydrology. Water flow affects fish, as we all should know, and it affects communities on the South Fraser, for instance, or Sicamous or wherever you're looking.
Flooding and drought, First Nations issues and concerns, wilderness tourism and recreation — we've seen a lot of impacts there. Connectivity between protected areas, riparian areas and our forest heritage into the future.
I have to question whether the committee truly has the best information before it on which to base a decision to increase the land base to be logged. This is in light of the recent Forest Practices Board report that notes the high one million hectares plus of not sufficiently restocked forests now on the books, for which the provincial government is essentially on the hook to replant or to ignore. If it ignores the NSR problem, job losses in future years will be even worse, not to mention the serious lack of adequate inventory information.
I want to acknowledge the very trying circumstances that people in communities face, but giving them false hope for a few years shows disrespect to workers and communities, because it means far greater potential job losses in the near future. It is way past time to give adequate financial support to the communities to support a transition to a future with fewer trees and a more diverse economy, not to give them band-aid solutions.
Any opening up of these reserves just doesn't make sense and tells the public that the provincial government does not respect process or ten to 15 years of public discussion and negotiation. This would be a betrayal not only of all those who were involved but of the public interest and the communities. We all deserve far better forest management and a better future than this.
I'm quite open to questions. I have some thoughts on some of the questions that were put to the previous panelists, but I'll wait to hear what you have to ask me.
D. Barnett: Thank you very much for your presentation. I, too, lived through the war in the woods, because I'm just about the same age as you. And I do live in the Cariboo-Chilcotin.
We all have concerns over the future, and many of our communities have been very involved in this issue for many years and have been working with governments, both federal and provincial, hoping to diversify for their future. But that is a very easy word — diversify — and it's very easy, for people who don't really live in these communities and don't understand the need in these communities for the industries that are there, to say: "Oh well, you people can diversify." We tried on a daily basis.
One of the biggest concerns — and I asked the last proponents — is the health of the forests. To me, the health of the forests is one of the main issues that we've been dealing with for many years and trying to be proactive. But when governments of the day take land such as class A parks and say: "You're not going in there to deal with the health of the forest…." To me, that is a serious issue.
I'd like to know your opinion on going into some of these areas that are class A parks and other reserves — that we do not go in and log and we do not manage them properly. What is your opinion on this?
V. Husband: Well, I think that's a very difficult question that you're asking.
Class A parks and parks — they are a small portion. I know they're blown up to be a large portion of British Columbia. Many of us don't feel that the actual area of protected land or connectivity land is enough to protect wildlife, fish, biodiversity and all the other values, because it isn't actually protected adequately enough across the whole land base. I wish it were, and we keep working on that.
Going into the parks…. I know there were a lot of people saying: "Well, Tweedsmuir Park — it all started there." I don't believe that. This is climate change–related. It started in many different places. It started with the fact that we didn't get that early cold snap in the winter.
Beetles were common before. We saw what happened in the West Chilcotin many years before in the Bowron Lake area. It was something that happened.
I would highly recommend reading Empire of the Beetle by Andrew Nikiforuk. It's actually an excellent read on this whole issue of the beetle.
But I'm cautious about it. I think it was on Mount Robson that they did do some careful logging. It has to be under the park management and working with others. I think there are opportunities, but natural processes are what we want to see in parks, so we can learn from them as well. So you have to handle it very, very carefully.
I don't think it's the major focus. I think the major focus is: where are we going from here right now?
I don't think it contributed to the beetle kill. I don't believe that at all. I'm afraid that's been blown up out of all proportion. We couldn't stop this beetle kill. I know there were lots of opportunities. People tried, and they tried in the States as well. This is not something we're stopping. It's how we manage it going forward.
D. Barnett: My concern is the future. We have climate change. We have other diseases. My concern is that if we don't get out and manage some of these reserves we're talking about, some of these areas, to protect them for the future, not just for industry but for all the values that we all are concerned about…. If we don't go in and manage those and put the health of the forest first and not just considering that we freeze up different areas and don't go into these particular reserves, viewscapes and old-growth management areas, we will have more disease.
What is your opinion on looking after these areas not so much to increase the AAC but for the future of our forests?
V. Husband: I don't know. I can ask the experts how far the beetle has run its course at this point, but I don't think it's going to make a whole lot of difference if you actually go in and "manage" these protected areas and these forest reserves by cutting some wood, which would have a negative impact on the other values in there. Trees are coming up, from what I hear from all the people I talk to in the Interior.
The trees are coming up, and some are 15 metres high already. They're recovering under the canopy of the dead trees, and that provides biodiversity into the future and provides many more opportunities.
Going in, you often destroy that potential future outside the park areas as future timber supply. Inside the park areas it's future habitat. So I would be very cautious about that. I would almost see it as a way to go in by the back door to find more timber supply.
You're saying that these are dead trees that aren't good to be used anymore. I would be very cautious about that, and I wouldn't highly recommend it.
B. Routley: Vicky, you and I were around during the CORE process. I remember the to-and-fro of it all.
By the way, you certainly did your organization well and proud, I'm sure, although I was on the other side of that battle in the war in the woods and representing the jobs-in-the-forest interest. But it is true that we do have to respect each other's values and try to find a way to come to some kind of compromise.
I heard the professional foresters say that we need to consider the forest first. I certainly agree with that notion. Now, I'm not sure. I think I have to do more probing to understand completely what that means to a forester, particularly in light of all the dead pine.
I guess my question is…. You weren't in Burns Lake when I was. It was a very compelling and overwhelming presentation that they put forward, saying: "Look, we need to do something. This community is in a serious decline." It's six First Nations that are supportive of a plan. A company, a chamber of commerce, the workers representatives, on and on — the list is endless. I know that's different than what we heard in the surrounding communities.
Is there anything that we should be doing? Would you support the notion of opening up land use plans in light of the fact that the pine beetle wasn't as well understood? Certainly, the gravity of it and how far it has impacted communities wasn't as well known when those land use plans were developed.
Should we be opening them up — obviously, again, trying to balance the values — and taking it back to communities? Would you support that kind of approach?
V. Husband: Well, if you took it back to all the people who had worked on the original land use plans…. That's a long process. I don't think that'll help the committee at this point. Basically, I would say not to do that.
I'm looking at Burns Lake and the mill and how…. You know, that's a very, very tough situation. But they've got two mills very close by that are big. Are they going to survive? You look at Quesnel. Is it five mills? How many of them are going to survive? It's going to be like that.
I think there could be a real future for getting more out of each tree, which we see in Quebec and Ontario and we don't see in British Columbia — more value-added. You do not build another 2-by-4 mill. This just doesn't make sense at all. The wood isn't there.
We have to recognize that even if you opened up the reserves, what have you got? A few years and probably very scattered forest reserves that may be uneconomic to log anyway. Then you're really putting the industry on the line, as well, about sustainability and certification.
You're also cutting out some of the tourism opportunities and the diversification of the economy in that way. So there are a whole lot of underlying other parts to this. Helping the Burns Lake community, I think, is a very difficult challenge — and what Donna brought up as well.
It's really difficult. We didn't know that the Burns Lake mill would burn down, but we already knew eight years ago, seven years ago, six years ago…. We've already known that this was an absolute catastrophe. We should've been looking at it. I know people have in the communities, but there hasn't been that broad approach or the financial support for the communities that's needed to really start looking at different options.
Definitely value-added. Many people I've known have talked about it for so many years, and it's just gone nowhere. We do not get the best use of our trees, and we should. That's something that I've pushed for as well. I think there are no easy solutions, but this is not the solution — logging the reserves.
As many people told me, they were all overlapping values. It isn't just VQOs. It isn't just old growth. It isn't just wildlife habitat. It's all of those things, and tourism values. They were told at the time, in the land use plan, to find areas that would cover a lot of different interests and values.
J. Rustad (Chair): Thank you. I've got just a couple of questions.
You mentioned the pine beetle epidemic and the process and climate change. The particular area associated with the pine historically has been ravaged by wildfires, which have been of a very large nature and have gone through the continual process of renewing those pine stands and not allowing us to get a large amount of old, overmature pine throughout the area.
Of course, along came man. We've been very good at managing wildfires and preventing that, which created this oversupply — or a very large supply, I should say — of overmature pine. Are you advocating that we shouldn't be doing that wildfire protection so that we can keep our forests in a more natural state to prevent this kind of disaster? Or should we be trying to be actively managing in that overmature pine to mimic what nature would have done through a wildfire process?
V. Husband: As you know, it's a very loaded question and a very complicated question. I think it's a bit of each, depending on the area and what needs to be done.
The wildfire prevention that was managed for…. We know that way back in time the First Nations actually lit fires, too, to open habitat for the wildlife and for other reasons. It is only one of the contributing factors.
I would say the major factor is climate change, whether many of us want to recognize that or not. That is what's changing. When I see that most of the planting that's going on is still pine, because it grows faster and is simpler to plant…. We are not looking forward.
I think we need much more active management at every level. Replanting, but replanting a diversification of species, because the climate is changing. We've seen it. Look what we've had. We've finally got summer now. Look at what Colorado's got, and the eastern states.
We know things are changing and will change with more extreme weather events, whether that's flooding or drought. I've heard that it could be an increase of 30 percent in stream flows, for instance, in the Fraser. Those are all events that we have to look at.
So it's the whole picture always. Everything is connected together. The wildfire suppression or whether to allow more of a mimicking of nature is something that is part of that picture. I would say it all has to be taken together, looking at it. I heard about the impact on the human population. That's huge. The impact on the wildlife population and on fishers has absolutely been devastating as well. So all of these things are part of a picture that we have to manage, and we have to look at it all.
J. Rustad (Chair): The second question that I have. You mentioned earlier that we should be managing for all forest values on the land base. As I mentioned to the previous presenter, where parks have expanded from 6 to 15 percent of the land base, do you suggest that we should manage for all forest values on all of our forested land base?
V. Husband: I do. I absolutely do. I don't think we do it. I'm not saying we do it now.
J. Rustad (Chair): Sorry, let me rephrase that. What I mean by all of our forested land base…. Obviously, there's a significant forested land base within parks and protected areas.
V. Husband: Yes, there is, and there's a lot of alpine in the parks and protected areas. I can speak more on Vancouver Island, but we only got 7 percent of the original extent of the old growth protected in the parks, of 13 percent on Vancouver Island. I think it's quite true across the landscape that we've got a significant proportion of non-forested areas or non-timber-valued areas.
So the lower valleys are critical habitat areas, and we are talking much more about connectivity, especially with climate change. Riparian zones are absolutely critical for all those values as corridors, as are winter reserves for wildlife. You know, that's why we have to manage for those values across the landscape. I think we all care about salmon and the future of salmon in this province, and that is at risk with warming temperatures and lower water levels.
This is why you can't take any of it apart. I would say we have to increase the connectivity for wildlife and the riparian zones, and maybe there are other opportunities. But I haven't seen an indication from the forest companies or from the government to increase investment in silviculture or in looking at forest health or in inventory so we actually know what we have — or having government foresters back in the communities, which I know the communities would like to see, and having it more from the ground up and knowing what's going on there and not moving timber supply from one area to the other so you take away benefits from certain communities.
So those are things I think we have to look at — as I said, landscape level and community level and right across the spectrum.
J. Rustad (Chair): Thanks. I just have one last question, and there might be some from others. This may be a little outside of your area of expertise, but one of the things we're looking at is area-based management versus volume-based management. There have been many arguments. As we heard from the professional foresters just before, you could make a good case on either side of that argument.
What is your thought around a single user and a defined land base as opposed to multiple users on a land base that could go back and forth and not necessarily have that responsibility through a rotation on a land base?
V. Husband: Well, from my constituency, we have had a lot of experience with area-based tenures, and we don't support them. We see it as more of a privatization of the forest. If you want to take any of it out, there's more demand for compensation. So we are not supportive of that. More in the volume-based tenures.
Nobody wants to talk about tenure reform, but it's the other elephant in the room, I would suggest. You're not going to discuss it here, but it's something, if we're going to look at communities' sustainability into the future.
I would just say that the role of the chief forester is also extremely important and must be independent.
J. Rustad (Chair): Speaking of the chief forester, I'd like to welcome Dave Peterson, who has also joined us here at the meetings today. He has been around to all the other meetings that we have had over the course of the last couple of weeks.
V. Husband: I haven't met Dave Peterson. I know Larry.
J. Rustad (Chair): Former chief forester.
V. Husband: Oh yes. Larry put this is on me today because he said I'd have to continue being the conscience of the Forest Service.
J. Rustad (Chair): Vicky, thank you very much for your presentation today and for providing us with the information.
V. Husband: There was an interesting editorial in today's Sun, if you want to have a look, on the issues.
J. Rustad (Chair): We have a little bit of a gap, but I'm going to just check with the Forest Fibre Alliance of B.C. to see if they're ready to present now.
J. Rustad (Chair): Great. Well, then, let's proceed.
Jim, welcome. I'll leave it to you to introduce your colleagues that are with you. Over to you.
J. Burbee: Well, thank you, John and committee members, for this opportunity to present. We recognize the gruelling schedule that you folks have been putting in and appreciate the extended time that we've been given today to make our presentation. What you're doing is a very worthwhile exercise.
My name is Jim Burbee. I'm an independent consultant for the last 14 years. Prior to that, 30 years in industrial forestry from setting chokers to chief forester. So I've been in a lot of jobs.
On my left is Mike Kennedy. Mike is a forestry manager for Ainsworth Engineered LP, an OSB operator. And on my right is Brad Bennett. Brad is the vice-president of operations for Pacific BioEnergy. Not with us today is Craig Lodge, who is the CEO of Pinnacle Renewable Energy Group. He had a family matter and sends his regrets.
These three companies are the founding members of the Forest Fibre Alliance of B.C. They've been formed to provide a voice for the users of the non-sawlog fibre.
We have some reference materials. There is a submission which summarizes our main recommendations. We tried to answer all the questions that you put out to the public in that summary. But given the time for presentations, we've picked out six main speaking slides, each with a point that we'd like to speak to, and then we have lots of time for discussion. I'll be trying to wrap this up in less than 15 minutes so that we can have a discussion.
If you'd like to follow along on the speaking notes…. We all know that the mountain pine beetle is the major issue across the Interior right now. We've been through a decade of damage control, I'd call it, to optimize the salvage. Shelf life is running out. The mills are closing, and we need some alternatives. We are at a crossroads, and we see a need for quantum change — not tinkering with VQOs or something. We need big change. We need to restructure.
Our first point is that enhanced utilization of this beetle wood is by far the most effective mitigation strategy for communities, for forests and for the economy. Major restructuring is necessary to effectively implement aggressive utilization strategies, and there are no other feasible alternatives in the short term. We have to use more wood if it's there — we can't grow it that fast — and we need to better use the fibre that we do have.
The non-sawlog timber is the post–mountain pine beetle third-band wood. If you're not familiar with the term "third-band wood," third-band wood was the timber below utilization specifications back in the 1970s. It included all pine trees, spruce trees less than 12 inches in diameter and other underutilized species. Sawmills were cutting spruce, and 20-inch pine sawlogs were going into wood rooms at pulp mills to be chipped for pulp.
So this resource outside the spruce resource was identified as the third-band wood. A quota was issued to mills that would put in chippers to make chips for pulp mills, and as a result, we saw a boom in utilization. We saw a boom in the pulp sector. We saw highly efficient mills. We have seen 40 years of strong contributions to the provincial economy brought about by a change in utilization, and right now that is our best option.
Today we need a bold approach to effect changes in the current utilization, similar to what was done to move the industry to close utilization back in the 1970s. Harvesting rights were the positive driver of change in the 1970s, and they can be the driver of change in our current predicament. But we need quantum change. We need something in the order of magnitude of the third-band wood to make a difference. So that's our first point. Utilization is your best bet.
Second point. Timber does not equal sawlogs. By definition in the Forest Act, "'timber' means trees, whether standing, fallen, living, dead, limbed, bucked or peeled." Long pine beetle–killed timber is dead, not gone — not all of it, anyway. Sawlog supply is seriously diminished, but the timber supply is less so. There's still a lot of fibre out there that is not sawlog.
Only time can mitigate the sawlog supply losses, and only utilization of non-sawlog timber can mitigate the near-term timber supply losses and the associated social and economic impacts. There just isn't time to grow wood in that mid-term. So the forest is finite, and we need to use what we have. There are no other significant options in the short term.
Our view is that diversification of the forest sector to include industries that utilize non-sawlog timber is the most effective solution to mid-term timber supply declines. We cannot change the forest to match the mills; we must change the mills to match the forest. To be effective in this, we need to change the way that we allocate the timber.
Third point. Why is change needed? It's needed to provide access to non-sawlog timber. Currently access to non-sawlog timber is controlled by sawlog users. Restricted access to non-sawlog timber is hampering the stability and the growth of businesses that can use this fibre.
Government has tried. They've removed barriers to fibre supply agreements between the sawlog holders and the non-sawlog holders, but with little effect. The fibre mills that you do see in place had to buy a sawlog licence to get their financing. Those that couldn't are in a fibre holding pattern. They're still waiting.
In the current situation there is no compelling business reason — and I'll repeat that…. There is no compelling business reason for holders of sawlog harvesting rights to enter into long-term fibre agreements. Non-sawlog fibre businesses need sawlog harvesting rights as currency to motivate sawmill companies to enter into business-to-business fibre supply agreements. For successful negotiations to occur, each party must have something that the other party needs. Pretty basic.
Fourth point. What needs to change? We think that a fundamental restructuring of the timber allocation process is needed. Here's what it would include. The chief forester includes all merchantable timber, sawlog and non-sawlog, in the allowable cut determinations and determines the contribution of each type of timber to the AAC. These separate contributions of sawlog and non-sawlog are not for establishing partitions in the cut. They're merely to assist in apportionment decisions.
The minister then apportions allowable cut into three categories: sawlog, companion and market licences. Harvesting rights to all three categories include the full spectrum of timber in the management unit. There are no partitions. There are no problem forest site partitions. Everyone cuts the profile.
The concept of a companion category is that each licence issued from the sawlog category would trigger the offering of a companion licence over the same area for the same duration — so the same area base, the same term, same length. The owners of a licence from a sawlog category cannot hold the licence from a companion category. They come from different categories for a reason, because we need to generate the demand to create fibre exchange agreements.
This is a key concept. The intent is to force business-to-business agreements and to utilize all the timber. You could think of it as an arranged marriage. There might not be a lot of love in it, but they can be made to work.
What will this change? Sawlog and non-sawlog timber licence holders now have something that is of value to each other and that will promote business-to-business agreements.
Fifth point. Will there be resistance? Of course. So how do you fairly implement this change? Our recommendation is through a redistribution of timber-harvesting rights. It's described in our submission in section 3.3. It includes three steps.
First step, existing replaceable licences that are replaced at levels supported by sawlog timber. For each replaceable licence that is awarded, a companion non-replaceable licence of equivalent term and linked to the same operating area is offered to bidders with established non-sawlog fibre plants. The intent of this first step is to support the established facilities in both sectors, your sawmills and your pellet plants and OSB plants. They've put their money out front there. They're first in line for the redistribution.
Step 2, non-replaceable licences. They continue to be awarded through the competitive process as they are now. For each non-replaceable licence that is awarded to an entity that owns a sawmill, a companion non-replaceable licence of equivalent term and linked to the same operating area is offered to bidders not in a sawmill ownership position. This step makes provision for new entrants and for expansion in the industry.
The third step is for market-based licences. These licences include Timber Sales, community forests, woodlots, non-replaceable licences that are not associated with a processing facility. They would remain unchanged except that their level of cut now would include both sawlog and non-sawlog timber.
The sixth and final point. It won't be easy. It'll take courage to make this kind of change. What we're saying is that it is necessary. There will be resistance, of course, but there is a precedent. The apportionment will create and strategically allocate a new block of allowable cut similar to the third-band wood generated by the close utilization policies that came in with the advent of chipping in sawmills — the rapid expansion in the pulp mill industry in B.C.
What is needed in the interior of B.C. today is a fundamental restructuring of the industry similar to what happened in the 1970s. We need to maintain what we can of that sawmill and that pulp industry. It's critical to our economy. We need to maintain that. But we also need to grasp this opportunity to diversify the sector, as we did when we went to the big pulp program.
To save jobs in the communities, to economically reforest the vast areas of dead forest and to offset the shrinkage in the sawlog sector with growth in other fibre-based industries. The most important asset in this discussion is the productive forest land. In the time scale of forests, timber is a temporary commodity. Uses for timber will continue to evolve, as will industries that utilize it.
Mother Nature has given us our abundant forests in B.C., and we have prospered from them. She has now given those of us that operate and live in the interior of B.C. a very different forest, and we need to adapt to continue to prosper. We ignore this at our peril. The sector is shrinking; the communities are hurting. We need to refocus and move on.
That concludes our six points. We'd be happy to answer your questions.
N. Macdonald (Deputy Chair): Thank you very much for the presentation. As Ms. Husband was saying and as others have said, this is something that has developed over ten years. I think that especially for a layman, the opportunity for bioenergy seemed especially appealing, as we had so much material that didn't seem to be fully utilized. I think that's when the opportunity was seen.
Certainly, in the tour we did — I don't know if you're familiar that the committee did a tour near Quesnel — we saw a huge amount of fibre that was just going to be burned off. I think we heard from the community, and for us as well, that it was disturbing to see an opportunity that your members could take advantage of, which seemed to be missed.
Going back to 2006, the government promised that this sector would grow and that we would see within, I think, a time period that's now passed energy being produced — the industry growing in a way that would be remarkable. Yet, we really haven't got past a number of the barriers that seem to still be there.
Now, you've laid out a way forward. Presumably, you would've laid that out several years ago. So you've talked about the barriers. You've talked about some of the small changes, including legislation fairly recently, that have tried to address the barriers. But what are the fundamental barriers?
You said it takes courage — right? I have no doubt that Minister Coleman, when he talked about moving forward on this, was sincere in trying to do it. What is the degree of courage this committee would need? What are you absolutely, in stark terms, talking about in terms of the trade-offs that are needed to make this work for your members?
J. Burbee: Well, the key point we made was the redistribution of timber-harvesting rights so that folks who need timber that isn't sawlogs have some currency to negotiate business-to-business relationships to obtain that fibre.
N. Macdonald (Deputy Chair): Obviously, there are major licensees. That's a group that would be opposed. We also have struggled to understand…. Well, I speak for myself; I don't speak for the other members. Over top of that we have First Nations concerns that have been put in front of us around, again, an interest in greater participation, which means greater access to fibre. Are these the sorts of things that have, to date, been such fundamental barriers that the government hasn't been able to work to take full advantage of this? Or is there more?
J. Burbee: I think the government has done a great deal to sort of be a matchmaker in trying to encourage business-to-business relationships. This is what major industry is asking for.
However, I think my colleagues are probably better positioned to answer this because I'm not in a mill position right now. But essentially there's no incentive for them to do that. There needs to be something to launch those business-to-business relationships so that this sector can grow. Right now it's a bit of a comfort zone that the majors can fall back and say: "Well, if we really run out of sawlogs, we'll just use this stuff." Meanwhile, these guys are in the wings waiting for their investments — right?
So I don't know. Brad, do you want to speak to that?
B. Bennett: Yeah, I think the key point is that you have to have something that somebody else wants, to get into a long-term relationship. I know our company has acquired sawlog forest licences to try and build our business, and we have for the most part been successful in those specific areas.
Again, it's been sort of using the existing tools to try and create a new industry. What we think is needed is a fundamental restructuring of who has the AAC and to set out a path to grow our business. In our case, it's wood pellets. In Mike's case, it's oriented strand board.
As far as First Nations, we're not afraid. Quite frankly, we encourage partnerships with First Nations. It's about growing new businesses, really. I think everybody understands the realities of that situation and that they have to be part of the solution.
We're working on a plant in the Chetwynd area right now. We're in discussions with West Moberly First Nations. We all understand that, and I think we can…. Our pitch is: "We can build a new industry."
M. Kennedy: Norm, just further to something that I mentioned at the 100 Mile House hearings. Right now there's not really any downside to throwing that material in the waste pile. If it's not necessarily expedient to utilize it, from the primary licensee's perspective, then at this point they can throw it in the waste pile and put a match to it, and there really isn't any downside to doing that.
N. Macdonald (Deputy Chair): I'll be really quick here. I mean, the regulations that require everything to come in on the first pass, things like that — I presume there's a huge cost to that, which would perhaps take that off the table. Other things would be stumpage, if you had to pay more for the waste that was there. Those are other tools, but presumably those are all things that, as Mr. Burbee says, would require tremendous courage from government.
M. Kennedy: They would.
N. Macdonald (Deputy Chair): Others would characterize it as something different. Nevertheless, those are the sorts of things that would need to be in place to make this work.
M. Kennedy: Right. There's a slate of tools. The first and, I think, most effective is an incentive-based situation whereby two willing parties have something that the other party would value, and that in itself creates the business-to-business relationship. That's the tenure that Jim was mentioning.
The other part is just some incentive to utilize wood. Perhaps a different way to put that is: some incentive to not waste wood.
J. Rustad (Chair): Thank you. We have a number of other questions.
D. Barnett: Thank you for your presentation. Nice to see Brad and Mike, whom I've had the privilege of working with for many years in the 100 Mile House–Chasm area. I know how hard the industry — both major sawlog operations and, of course, the OSB people — have been working together to try and find a solution to this issue. Coming from a community where you have OSB and you know what kind of fibre you need, it's always difficult. We have a PA licence that is expiring, and we are looking for an alternative long-term solution. I commend Mike and his crew for the great work they've done.
One of the concerns I have with these new industries…. They're great; they're diversification. My concern is I see them popping up here left, right and centre, and everybody is now looking for this type of fibre. Do you not feel that we could overextend in this new industry if some long-term, better planning isn't done, for example, for those existing secondary entities we have now, such as OSB and the pellet places we have out there?
M. Kennedy: Well, I'll start with that one, Donna. I think that's a very critical question. Right now I think we need to make sure that we fully utilize the manufacturing capacity that we have. And we do have a very strong OSB industry, a strong bioenergy industry right now. There's a risk of overextending ourselves, that we keep getting larger and larger without the fibre base to back it, but I think what we need to do is make sure that the industries that we have in place right now have a secure access to fibre.
I'm sure — and Brad will probably attest to it — there are further opportunities in certain places that aren't fully utilized right now, but your point is very well taken, Donna. I think we need to make sure that we fully utilize that manufacturing capacity for low-quality wood that we currently have and that we put as many people to work as we can, given that manufacturing capacity right now, before we use it for other purposes.
D. Barnett: One more question, if I may, on area-based tenures. What is the opinion of the secondary industry on area-based tenures?
B. Bennett: First, I'm going to answer you and add a little bit more colour to what Mike talked about on the allocation. I totally agree there. You look at a place like Prince George, and it's really oversubscribed right now. We have our big facility there. You know, I live in Kamloops. I drive up the Coquihalla. I don't get 15 minutes out of town and I see piles being burned. You guys obviously saw it in Quesnel.
So I think there are other parts of the province where there are significant opportunities. Yes, it's a careful exercise of understanding what's there today, understanding what the overall gross inventory looks like and how it's going to evolve over time. And is there a business there that can survive on the waste wood? I think that's just a careful, measured exercise that has to happen.
As far as area-based tenures, we are concerned, obviously, with the move to area-based tenures that the sawlog rights get more embedded in it and there's less of an opportunity for other licensees like ourselves to have rights there. What we're saying is that if it is, then we would like to see bioenergy area-based tenures. There are examples in the province. Kruger has the TFL where they grow fibre for their pulp mill in New Westminster. That's one solution.
The other one is to embed the rights of secondary fibre users in those area-based tenures. That's kind of our answer to that question.
J. Rustad (Chair): We've got just a short bit of time and a few more questions.
B. Routley: Redistribution of timber rights would be extremely costly to the province, I would imagine. I wondered if you've done a cost-benefit analysis on that. That was question No. 1.
The second one, while I'm at it, is…. There are many ways possible to climb a mountain. How do you achieve fibre utilization?
I've heard other industry folks talk about jobs per cubic metre or either incentives or penalties for fibre utilization. If they're not going to use it, there's going to be a penalty. If they meet with you and partner up, there's not going to be a penalty because they're creating jobs per cubic metre. Could such a system or innovation work without the great cost to the province of buying back timber rights? I don't know if you've given…. I know you probably just heard it.
I have heard other innovative thinkers look at ways to make sure that we utilize. One would be the kind of carrot-and-stick approach. I mean, it doesn't cost you anything if you partner up. If you don't partner up in the utilization of fibre, you could end up with a cost. That could achieve the same thing. But buying back land or reallocating land…. I'm familiar with the huge costs in the past involved to the province when lands were taken back for other land use needs, including parks.
M. Kennedy: Maybe I could touch on that one first. Just to be clear here, we're not advocating for a buyback of tenure. We're simply looking at a way of allocating that supply such that we look at the total fibre supply that includes the sawlog material and the non-sawlog material or, if you want to call it, the gross fibre supply and then allocating that gross fibre supply.
We're not advocating for a takeback of tenure and a redistribution. We're looking at splitting up the pie in a slightly different manner — just to be clear on that.
B. Bennett: Essentially expand the pie, and then split it. I mean, really, historically the replaceable forest licences are going to decline in their volumes as the timber supplies are ratcheted down by the chief forester.
What we're saying is: enter into this new realm or new third band of timber, and then let's split that pie between new and old users essentially.
H. Bains: I guess time and again we have heard that we're not doing enough with the fibre that is available. I think you're offering a different way of utilizing what's out there — sawlogs versus non-sawlogs. How do we get to those non-sawlogs, and how do we utilize them for other uses, other than making 2-by-4s?
I think there are some questions being raised again about tying the AACs to the job creation or the number of jobs that are created per cubic metre of fibre that is available. Bill touched on it. Would that be something that you would be advocating — that there are some incentives to do more with what we have, rather than trying to create more and then decide what we do with it and how we utilize it? How do we make 2-by-4s faster and more of them in a shorter period of time?
That approach hasn't worked, and it's not going to work in the future. We have heard this time and time again. How do we become more efficient from that angle and create more jobs by way of secondary manufacturing or value-adding? What's your belief on tying the AAC to the number of jobs that may be there?
M. Kennedy: I think the real opportunity is in utilizing all of the fibre and to put the incentives in place that would make companies want to utilize all of the fibre or make it in their best interests. I think as Jim laid out, perhaps the best way to do that is to have two parties that have something that each other wants.
In order to get that tenure for companies that utilize the lower-quality fibre, they have those tenure rights as well as the current existing sawmill. So each party has something that the other party desires, and therefore, it facilitates a trade relationship.
To directly answer your question, we're certainly in favour of an incentive-based system, but there are also other ways to look at that in terms of cut control, counting all of the fibre and not ignoring the part that went into the waste pile. Stumpage-free waste benchmarks, which are out there right now — getting rid of those would also be a useful tool.
H. Bains: Just coming from there, as you remember there was an appurtenancy clause in the act before, and that was removed in 2003 or thereabouts. Whether it's your organization utilizing non-sawlogs or the others who are using sawlogs, some sort of requirement that they must process them. We are, at the end of the day, supporting the communities and the workers who live in those communities and at the same time enlarging the economic pie for the province.
How do we go about that, saying that the wood and the fibre, either non-sawlog or sawlog, are processed in those communities or around those communities? I mean, we could define those literally. I'm just throwing that out for lack of a better definition. How do we make sure that the fibre is utilized in the province to create jobs for the people of the province?
M. Kennedy: Well, I think the economics are going to drive the destination for that fibre, but I think our best bet is to put the conditions in place that would make someone want to utilize that.
J. Burbee: If I could just add to that, the jobs per cubic metre sounds good in a community that's losing jobs, like Burns Lake or whatever. But if you add so many jobs to that product that it doesn't compete in the market anymore, then you really haven't helped them. The real salvation is to take those tradesmen, those workers, and move them from one mill to the other mill that can operate in this environment because they have the fibre for it.
J. Rustad (Chair): Thank you. We are out of time, and we've got three other questions to ask. So I'm going to be very strict on this. The questions must be very brief, starting with myself.
I've got a couple that I'll try to wrap up with one quick question. We have existing fibre licensees, such as pulp mills, pellet plants, power plants. We have potential for new entrants, such as biofuels — or who knows what else may come in the future. How do you create the opportunity for new licensees while at the same time trying to access fibre for existing licensees?
The second part to that question, I guess, is…. As you have so much fibre coming off — you've got the low-lying fruit, which is the residuals from the mill; you've got the next, which is the residuals from harvesting; and then you've got the stands that nobody is accessing — what is your breakdown on those three components? Do you consider them different in terms of fibre calculation?
J. Burbee: From a cost perspective?
J. Rustad (Chair): From whichever perspective, in terms of how you're talking about partitioning out.
B. Bennett: The reality is a stand of dead pine today has 75 percent sawlog, and most projections are saying that it's reducing at about 2 to 3 percent per year. At some point it will get to a point where the sawmills can't support the economics of harvesting. So we're talking about expanding the timber-harvesting land base by developing other sectors that have the ability to stomach some of the costs associated with harvesting those stands.
In that way, my vision is that we are liberating sawlogs, therefore creating more sawlogs for the existing sawmills that are there. But it's about creating the environment, which is having something that the other party wants, to get that exchange happening.
I know, for example, in our case…. In 2004 through 2007 there was the outbreak of the mountain pine beetle. There were a number of uplifts that were created, a number of licences that were created, and the markets deteriorated on us.
There really has been a flood of AAC out there. We've had a large forest licence since 2008, and nobody has really been interested in talking to us because there is so much AAC out there that nobody needs it. So it's about creating that sort of…. I describe it as like flooding the market with 2-by-4s to the point where the price drops. Well, it's essentially what's happened.
Now we start to see the environment where the AACs are starting to come down. A lot of those non-replaceable licences are coming to an end, and there's starting to be that engagement happening.
So I think that's what we want to see — that engagement between the non-traditional users and the traditional users, that exchange happening, growing a business that will utilize a lot of that fibre and stomach some of the costs associated with harvesting those stands. That will liberate those sawlogs to allow the sawmills to stay around for a while.
Frankly, there are some great discussions going on right now. I think that as some of the sawmillers start to see what the future looks like, we are having those…. It's about creating that whole environment that will allow that exchange to happen. We're saying to strengthen the rights that we have as non-traditional users as a way of getting that engagement to happen quickly and getting the full advantage of what could happen for the province.
J. Rustad (Chair): I apologize to the other members. We are out of time for questions, but thank you very much for your presentation for us.
Our next presenter is the B.C. industry working group. So who's taking the lead? Ric, do you mind introducing the members that you have with you?
R. Slaco: First of all, good morning. Thanks very much for this opportunity. My name is Ric Slaco. I'm vice-president and chief forester at Interfor. Dave Gandossi, on my left here, is executive vice-president at Mercer; and John Talbot and Kelly McCloskey are consulting experts in their fields who are helping us with this initiative related to the bioeconomy.
First of all, I should say that I'm not here on behalf of Interfor. I'm actually here speaking on behalf of the industry. As you can tell from the title of our group, it's specifically related to the bioeconomy and the work that the industry sector has been doing collaboratively with a variety of partners in terms of trying to encourage and embrace the transformation of the industry into this new opportunity related to the bioeconomy itself.
I believe we have provided you a couple of presentation materials. I'm not planning to read those, but I'm assuming that you have them. One of them is a PowerPoint presentation on the bioeconomy, and the second is a communication piece on the bioeconomy that we produced late last year.
The purpose of today is — and I guess it might emanate from the first question: what the heck has the bioeconomy got to do with the critical timber supply needs that are occurring right now as a consequence of the mountain pine beetle, especially in the central Interior?
John, as chair of the bioeconomy committee for this group — and the work that a number of you have done in the bioeconomy work with the province that was initiated last year — you would know that the bioeconomy is about the future for British Columbia. It's about the industry and the government and different stakeholders getting together and understanding what this huge opportunity represents.
From our perspective, certainly as you contemplate some critical issues pertaining to the effects of the mountain pine beetle, our objective today is really to outline for you the strategic aspects of what the bioeconomy future holds for British Columbia and how that might relate to how the government considers looking at timber supply going forward.
The bioeconomy itself was defined by that committee last year. It simply said that it was the utilization of biological resources to achieve sustainable economic objectives. It's a pretty broad statement, but when you think about it in terms of the opportunity, what we're talking here is the industry itself and the multitude of different products and services that can be derived from, essentially, forest biomass.
As you've heard from other presenters this morning — and I'm sure for the rest of the hearings — you're going to get a wide variety of perspectives. The opportunity that we're trying to outline for you today is that the broad opportunity is one that's built on a collaborative model which is looking at a variety of users.
Purposely we're not trying to select out one user versus another. We're actually saying that we have a very solid foundation here in British Columbia around our core businesses. We certainly don't want to diminish the role that the sawmilling industry or the pulp and paper sector has provided in this province.
What we see in terms of the opportunity around the bioeconomy is complementary. Whether that's for power use, for biochemical or for a whole array of different types of products associated with the fibre, it's the integration of those businesses and the competitive base from which British Columbia can operate in that's going to determine the future.
From our perspective, what we'd like to see is the emergence of a bioeconomy council or committee that helps to drive this initiative forward. As our industries here are representing both academia — research institutes like FPI, what's happening at UNBC, what's happening at UBC — and a variety of others, there's a whole large, innovative aspect to what the bioeconomy represents. The key, however, is embracing that within our traditional and new industries that can commercialize that research and innovation.
While we cannot offer you today a solution to some critical needs that might exist in places in the central Interior hardest hit by the mountain pine beetle, what we can say is that as we are working collectively as government, industry and academia, we believe that future opportunity is great. Committees like yourself that are considering critical supply needs in the short- and mid-term also need to think longer term in terms of how we may be able to transform our sector. That transformation is built around research and innovation tied to the commercialization of having and being a global leader in British Columbia of what the bioeconomy can represent.
In the legislative committee's report last year they had cited that that market opportunity represented $200 billion in terms of a future opportunity. British Columbia is well poised to capture on that. We have an industry that has been reasonably well capitalized. We have some of the most modern sawmilling facilities in the world right now. We are a large market leader in terms of our products. We have a pulp and paper sector that has been transforming itself and provides an excellent base for the emergence of the new bioeconomy types of products and services.
Essentially, we have the foundation, but it's not going to get there just by saying so. A positive initiative has to take place, because we have competitors out there that are also thinking of this. We don't want to be the laggards, in terms of representing this great global opportunity, by sitting back and not acting on the base that we currently have today and what the future could obviously hold for all of us.
In the presentation you'll note that there were six elements of the bioeconomy that we wanted to highlight, in terms of what that future is. I'll just refer to those six, in terms of focus pieces.
Those six priorities. The first one is transportation and infrastructure. In terms of the bioeconomy, trying to make this initiative real, today we can look at modernizing some of our transportation regulations to help optimize how we ship products from the timber source itself or to a market or to a mill. Those are the types of things that we should be acting on right away.
One example that the pulp and paper sector has been working on has been the use of expanded carriers for chips. If you can get a 20 percent increase in your hauling capacity to transport supply, there's an immediate savings that can go along with that.
We should be looking, especially as we see fibre opportunities and the movement of fibre from facility to facility, and we should be thinking about how we can optimize and streamline the movement and flow of those goods — in essence, creating some focus around doing that. Ultimately, at the end of the day, it's the competitiveness of what this new opportunity is that will drive its success.
The second priority is forest management and fibre utilization. I think that within that communication document you'll see some examples of how we believe managing forest carbon can be beneficial to the province. Utilization, potentially, of carbon credits to drive funding for forest management activities is one example of how we may accelerate mid-term supply needs that could come about.
A third focus is training and recruitment. I'm sure that most sectors have talked about the need for skilled people. There's no doubt that as we move into this bioeconomy era in British Columbia, there'll be a need for skilled people. What we would want to do, as part of this initiative, is to create a pull of why someone would be interested in the bioeconomy and how you attract people into that sector. The sector itself is going to need people that are skilled and that are innovative, because the industry will be going through a transformation here.
One of the ways to get people attracted to your sector is how you communicate and brand it. That's the fourth priority of this work.
We need to rebrand how we represent our product. You started to see elements of that, of how the sector was starting to rebrand the use of forest, when we hosted the Olympics. We talked a lot about wood use and the innovative wood use in those buildings. You started to see a number of initiatives, like the wood-first initiative, which we are hugely supportive of.
There are more and more examples of how you can use a natural, renewable product made from the forests, forest material, and how you can present that into the marketplace, and then how you can attract people around the new business, which is a bioeconomy business — not a sawmilling business; a bioeconomy business, in which sawmilling plays a role, or pulp and paper.
The fifth priority is research and innovation. That certainly is the underlying theme around how you get from A to B in terms of the transformation.
As I said earlier, we have a number of excellent facilities here in the province. We certainly need to look at how we fund those, how we prioritize the activities that are going on and have a focus towards these bioeconomy outcomes and certainly how we can commercialize around those innovative types of outcomes.
The last priority, and certainly one that this panel and others in government would need to pay attention to, of course, is the hosting conditions. It's the regulatory base. It's looking at tax regimes, how you essentially create incentives for investment as part of this transformation, and things like energy policy as well. We don't have enough time to go into each of those, but certainly government does play a role, and we do see this transformation as part of a collaborative.
We have an excellent example of working collaboratively with the province when we embarked on the work around climate change. We had a model that was built with industry, the forest sector industry working collaboratively with government, and through that initiative, looking at and addressing policy and how different approaches could occur in terms of developing appropriate policies related to carbon. We think that that type of initiative as a model can continue in terms of how we would approach the bioeconomy work itself.
I know that, as I said, we can't offer any immediate relief to communities in terms of what we're proposing here today. We're proposing a sort of strategic consideration around how the government and the rest of the sector should be approaching this huge opportunity built around this bioeconomy theme. But as you contemplate looking at, specifically, those critical supply needs, we think it's hugely valuable to think about the strategic context such that you're not in isolation, losing sight of the factor that there could be a whole new opportunity associated with a wide variety of fibre needs beyond just the traditional industries.
As the previous panel speaker has talked about, there is going to be a wide variety of interests in forest fibre. We just need to find a way and ensure that we're working in an integrated fashion that allows that to occur in a reasonable, rational way that has competitiveness for the sector as an underlying theme such that we can be successful and compete successfully in the global marketplace.
My colleagues are here with me to answer questions, because to me, most of what we're suggesting today is a think piece. It's not about: "You should do this" or "You should do that." It's about what that opportunity is and how we might be able to work in a fashion that allows it to be realized.
If I could, I would like to allow time now to answer any questions you might have and to have any of my colleagues here respond to those. If I could, as a prompt…. I brought with me a little sample.
Kelly, would you mind passing that to the panel?
I'd like to have more, but it's a rare commodity. This little sample bottle contains nanocrystalline cellulose. This is part of the future. This is some terrific work that's been done with FPI and industry in Canada to develop a whole new bioproduct — a product that has a whole variety of different types of uses in terms of pharmaceuticals, chemicals and film-type products because of its unique qualities, all derived from wood fibre.
There's a whole other list of products that are out there — some that we know about, some that we haven't even discovered yet. The industry will be going through a transformation. We need to be a part of it. We need to be a global leader in this change.
E. Foster: Well, thanks a lot, Ric. I'm pleased to hear your report.
I moved to British Columbia in 1983, and I've worked in the forest industry my whole life. In 1983 the comments were, from those who did not have tenure, "We want some," and from those who had tenure: "We want to keep it." That conversation hasn't changed much since 1983.
The previous presenters, of course, are looking for tenure reform. You just talked to cooperation. You all need to go into the back room and have a group hug, and maybe you can figure out how to do it.
The biggest single problem that we have…. We have had it in the industry. And when we want to change the industry, which is what we're talking about….
I also sat on the bioeconomy committee that travelled around last year, with John. There were some great, great innovative ideas on where we should be in the future. I totally agree that B.C. needs to lead the world in this. We've got the fibre. We've got the science. We need to be first.
We do need to deal with the business of where the fibre goes. We have heard from a couple of the presenters over the last two weeks that: "We've got more capacity for fibre than we have fibre. Don't be giving it to somebody else." Those who didn't, who spoke before you, want a shot at it.
So I think it's incumbent upon industry — and government, of course — to sit down with all the players and maximize the value of the trees to everybody's benefit. The sawmill industry, which has to survive and prosper for the bioenergy to prosper…. There is a way to do this. We have to change our mindset on tenure.
I had a woodlot. I get it. I didn't want to give a stick away. When somebody wanted to widen the road through my woodlot, I had palpitations.
But it needs to happen, and you're the people that need to make it happen. Leaders of industry have got to sit down and figure out how to do it to everybody's benefit. We're going to hear more from industry today, and we've certainly heard from the small and big players over the last several weeks.
I guess I'm throwing the challenge out to you. It's more of a challenge than a question, if this is going to work and we're going to be able to keep our industry whole and keep the jobs. Some of the communities that we visited are fighting for their existence, and this bioenergy is one of the components that'll help that happen.
Again, not a question but a challenge to industry of all sizes and all ends of the forest industry. That's the challenge. That's what you need to do for us to be where we want to be, where we need to be.
R. Slaco: It's an excellent point, Eric, and it's certainly one that we considered in terms of the challenge itself.
Quite frankly, the realization that we came to was that we're not competitors. If we're going to be successful, we have to be collaborators. Our competitors are other jurisdictions in the world that are out there doing their best to out-compete us.
When you look at how we've coalesced as an industry, we've coalesced in terms of this working group that we did on climate change. Certainly, what we're proposing to do on the bioeconomy is to be, essentially, 90 percent of the manufacturing capacity of the province.
One good example is Mercer and ourselves and Interfor in terms of the working relationship and the approach that we're taking in trying to deal with fibre needs and the future opportunities for one specific region in the province.
But it's an excellent point. I would say that we haven't got everybody at this point, and we haven't figured it out. There is an element of trying to find what that right balance is. In terms of the broad approach, we're right on the same page with you. We as a sector have to come to government not as ten voices but as one voice.
N. Macdonald (Deputy Chair): A couple of questions. First, to pick up Eric's point. The initiative we saw from the previous group is one that I think everybody wanted to work. It's been more of a struggle. There's certainly success there, but it has been more of a struggle than we thought.
I think what Eric's saying is that the collaboration would be a step. Government finds it difficult to find an effective tool that will work in getting the wood out of the bush and into the hands of those that could make it….
I'll just jump to two other points. First, you have talked about the branding, and I think implicit in that is one of the things you're giving to us. It's not just certification, but it's also that we're selling to the world that idea of a product that is environmentally sound and comes from a solid base. That's one of the things that I think you're saying to us as we consider a number of options, some more contentious than others. So I take that. You can correct me if I'm wrong in what you're saying there.
Then I guess the last thing is that the government obviously is investing. There was a government committee, but beyond that, with various support for academic research support in other areas. There is government support. But what is the level of government support in taking a product to a place where it's marketable?
Obviously, industry plays a huge part of it. But what's the balance, and where do we have to go to get to a place where government is doing its part in making sure that some of these initiatives can move forward into a place where we reap the economic benefits?
R. Slaco: The first question, related to communication. You're absolutely right. Certainly, our perspective is that when customers buy our product, they're buying it on price, quality, service and the environment. So as government looks at regulations and looks at how they approach, just as industry does when it tries to service its customers, environment is a consideration for sure, and how we represent and communicate what we're doing is valuable.
On the second point, certainly there is a need to have the development of a focus, to evolve to a degree. In other words, we don't at this point have a fine-tuned plan that says: "Do X, Y and Z, and you'll end up with A."
What we have said is that around these six priorities, we'd like to establish working committees that would identify certain items that we can take on now, others that will evolve over time. It is going to require some core level of funding. We're not in a position to suggest what that is at this point, but we are rapidly moving towards attempting to do that.
I would say that we don't want to wait for the perfect plan. We believe certain things can happen now, and we shouldn't be waiting for the perfect plan or the perfect outcome in terms of a report to allow things to occur. We should identify the things that we can do now, some of the things that are a mid-term interest and some of the things that are a long-term interest, and then get on with doing it.
David, do you have any comments you want to add?
D. Gandossi: No, I think that's right. It's like all those initiatives are spokes on a wheel, and you can't do just one thing or another. But we really believe that if we have the industry and government in a forum where we're all working to do each of those things better than we do today and we have a focus on what the opportunity is, that will drive some outcomes which will be beneficial.
It's all about competitiveness, and it's all about having a strategy that sees the future for what it is. We can't go backwards. We can't try to recreate where we've been. We've got to look forward. That's part of the problem with timber supply.
K. McCloskey: I would just add on the branding side that…. Ric talked about the environment, and you obviously mentioned that as well, but there is this incredible opportunity to be positioned as the high-tech industry of the future, not just environmentally. We have those attributes, as you know.
Certainly, that's critical as it relates to future recruitment in the industry. We're talking about a lot of high-tech stuff like Ric just circulated, and you want young folks wanting to be part of that. That's a part of the challenge that we can work with government on very closely.
J. Rustad (Chair): We've got only about three minutes left, and we have two questions. So Donna and Bill, if we can try to get them both in.
D. Barnett: Okay. I'll try and be quick.
I'm reading your document here, and you're talking about collaboration between government, industry and academia as needed.
One of the concerns I have, coming from small-town rural British Columbia, is that in small-town rural British Columbia, where the fibre resource is, the people who are dealing with it at the highest level are not consulted. When I look at another committee made without putting those people in the mix with communication and input, I get very concerned. They are the people that are going to be hurt the most, and those communities are feeling the effect of this. From my point of view, I wanted to make sure that this is on the record.
We have formed beetle coalitions throughout this province. We have every community, First Nations, industry and environmentalists at the table. Before we move forward with the future of these communities, I would feel much better if there is going to be communication and collaboration.
B. Routley: I, too, support the notion of collaboration. The trouble that I'm having is that I guess I'm used to how, in the real business world, business is quite happy to eat each other's lunch. If there's a new innovation that comes down the pike that has more value than what it is you're doing, they'll buy out and take over and kick you out of the chair and do whatever with the fibre that's new.
For example, if this new nano-fibre was worth a lot more than 2-by-4s, I think we'd be seeing that transition pretty quickly. I know I've witnessed a lot of that myself.
I'm struggling with the notion. Is it that you're seeing this wave of change coming and trying to become partners with the folks that are coming down the road, the new players or stakeholders? Or are you actually trying to transition yourselves, your own separate industries, into something new? I'm struggling with why government….
All of a sudden we all become socialists, even major corporations, when there's a need. I witnessed that in a major way in North America when suddenly there was a collapse of the economy. Big corporations were first in line to be with socialist ideas of getting money from government.
Anyway, back to this council. How would that be different than somebody coming along that wants to eat your lunch and buy out your business and do something new? What's the benefit to the province? Why should we get involved?
R. Slaco: Well, certainly, the province is our landlord. I mean, 95 percent of the timber resource is a provincial resource. We understand that completely — that what we're attempting to do here is trying to take that resource and turn it into some commercial value that ultimately all British Columbians can benefit from.
We have certainly seen in the past that if you don't have the proper hosting conditions in terms of how you provide that access to fibre and the work that the industry and other stakeholders do with government in terms of creating value from that resource, you're going to have a failed and non-sustainable business pretty quickly. It's absolutely critical, from our view, that there is a role for government in terms of playing a part in how this initiative unfolds.
Certainly, from your question about whether it's industry eating someone else's lunch, the reality is that to be successful, we're going to have to work in some fashion around how you bring and integrate different parts of the business. Some businesses will transform themselves. Other business will find and work with partners. Ultimately, what we're going to see, I believe, is the efficiency in terms of that optimization of fibre use, both from existing players and new users or manufacturers of different types of products that will ultimately be the new model of how the industry will look in the future.
J. Rustad (Chair): Sorry, we're just over time. I want to thank you very much for the information you have brought forward and for presenting to our panel here today.
Our next presenter is Canfor.
Thank you, and over to you. Go ahead and start.
D. Kayne: Thanks, John, committee members. I appreciate being given the opportunity today to address this committee.
I know you have received Canfor's detailed written submission, and I will be touching on it briefly. But I felt the best use of our time today, while we're here together, would be a discussion about what brought Canfor to the conclusions detailed in our submission, rather than reiterating the points we make there.
What I have to say today reflects just how much the forest industry has changed. Twenty years ago it would probably have been inconceivable that the CEO of one of the largest wood products companies in North America would stand in front of this legislative committee looking to increase available timber and say: "Proceed with caution." That is the message that Canfor wants to deliver to you today: "Be careful with what you do. The viability of our business is at stake."
The land use conflicts we endured in the '90s compromised our ability to access global markets for our products. Protests and discord tarnished our reputation and hurt our ability to compete on the international stage. We learned the hard way that our social licence to operate in public forests is paramount, and we earned it back through detailed bottom-up land use planning processes where everyone was invited to define what they wanted from our forest resources environmentally, socially and economically.
We build sustainability into everything we do. We support it through our business models, through our independent forest certification and through our customer relationships. We have achieved a fantastic model of sustainability here in British Columbia, one that is recognized and valued worldwide. This is not something to be taken lightly.
Without a doubt, our greatest strength is our commitment to sustainable forest management. This has allowed us to tap into a new environmental paradigm in green building, which is opening doors for our wood products globally and generating demand for the materials we produce.
While we certainly welcome opportunities that might improve the mid-term timber supply, we first must be convinced that these actions are well-thought-out, fair and inclusive, and fit with our vision of sustainability. Let me give you a few examples.
Canfor does not support actions that would overturn landscape objectives set through public planning processes, unless there was full public consultation and support. We will not support actions that impact parks, riparian areas or areas that provide critical habitat for species at risk or other important environmental values such as biodiversity and old growth. We will not support actions that put us at odds with obligations of our registered professional foresters to uphold the public trust by managing forests sustainably. And we will not support actions that jeopardize our third-party forest certification and risk access to domestic and international markets.
It would not be an overstatement to suggest that the recommendations of this committee can impact the viability of British Columbia's forest sector as a sustainable industry.
Beyond our concerns with the impact this committee's recommendations could have on our environmental credentials, we also have concerns around compromising a fair business environment in the province. It's a fact that the mountain pine beetle infestation will have a significant impact on the mid-term timber supply in the central Interior. It's also a fact that there will be overcapacity in B.C.'s primary lumber manufacturing.
While it might be possible to increase the fibre supply, it is also a fact that mills will close. We have to acknowledge that there is simply not enough timber to run all the mills in the Interior. This is something Canfor accepted years ago. We made some tough choices to reconcile our operations as the reality of the post-beetle mid-term timber supply became clearer.
We analyzed our fibre supply and used that information to make strategic investments in some mills and to close others we knew would not be viable. We faced some hard decisions, but they were necessary to keep our company competitive. We cannot support actions that would diminish this difficult work and the value of the significant investments we have made throughout B.C. Any attempt by government to pick winners and losers is not only unfair; it jeopardizes our industry's competitiveness and B.C.'s reputation as a sound place for investment.
Canfor will continue to do what is necessary to get through the aftermath of the beetle infestation. We will continue to work with communities, First Nations, government and the public to moderate the impacts wherever we can.
However, we feel any discussion of broader action needs to be guided by principles that protect both our social licence to operate and our right to operate in a fair business environment given the investments we have made in this province.
This doesn't mean that nothing can be done, but we need to take a thoughtful approach that is fair to businesses and the public and mindful of our collective obligations for protecting the environment and sound business operating conditions.
Of the five potential actions identified in the committee's discussion paper, Canfor supports four, with some qualifications.
Canfor supports exploring options to increase harvesting in some areas currently constrained from timber harvest, provided it does not impact parks and protected areas, or areas that provide critical habitat for species at risk or other endangered or threatened species.
I'm sure you can appreciate that as a company, we would have grave concerns about any government directive that would see Canfor cede our legitimate harvesting rights to support a competitor's mill in one area in exchange for timber made available from established old-growth or wildlife habitat reserves in another.
Canfor would be supportive of exploring options to increase the harvest of marginally economic timber. However, there must be clear criteria to identify marginally economic timber, and it absolutely must be kept separate from existing replaceable volume and have an open bidding process to access it.
Canfor supports the move toward area-based tenures, as we believe it would provide more security and encourage intensive management. Further to this, Canfor supports increasing a level of advanced silviculture and fertilization, but with one huge qualification: we need evidence that the cost is justified and that there is a reasonable economic return.
We know from experience that these types of programs are expensive and that the economics on an 80-year harvest rotation often just don't make sense. Furthermore, there should be no timber supply adjustments without solid proof of mid- or long-term timber supply benefits.
The one action that we do not support is to change the flow of timber by adjusting administrative boundaries. Canfor's opposition is based largely on the points I made earlier. We have known for some time that there would be a timber shortage because of the beetle infestation. At Canfor we addressed this through strategic acquisitions and investments and by closing facilities where we knew the timber supply would eventually be inadequate.
As far as I'm concerned, amalgamating timber supply areas just prolongs the inevitable, and it could wind up being highly unfair to some companies in some communities. It would defer manufacturing rationalization, destabilize the fibre supply and jeopardize our ability to run our operations efficiently.
This type of engineering of a transfer of allowable annual cut reductions and shifting the impact of the infestation puts government in an inappropriate position of picking winners and losers between companies and between communities.
We have to be clear: as far as timber supply impacts of the mountain pine beetle epidemic, the writing has been on the wall for a number of years. Companies like Canfor have invested substantially to respond to this significant and looming challenge, and we have done so based on the clear existing regulatory framework in the province. For government to step in now so late in the game and invalidate those investments with sweeping and arbitrary changes to forest tenure administration would send shockwaves through the industry and our communities.
Instead of amalgamating timber supply areas, government should use unallocated and undercut volumes as a mid-term mitigation tool. This is something we could support as long as the volume is disposed of in a timely and competitive manner as non-replaceable licences.
Finally, we'd like to make note of several issues which were not in the discussion paper but that we feel are important elements for the committee to consider. Canfor encourages government to invest in more accurate and reliable forest inventories so there is better information to support community stability, investments and land use decisions. We would also encourage government to increase the level of investment in transportation infrastructure. This would increase the economic potential of remote timber stands while supporting other resource industries and industrial development.
Finally, Canfor encourages government to continue working with industry to evaluate and fast-track opportunities to reduce costs and improve payloads to improve the economics of transportation of forest products, which would include logs.
In conclusion, at Canfor we are committed to maintaining an aggressive but mindful approach to market development in promising economies around the world. Obviously, there is no point in building demand for products that we cannot supply, so we have been working for some time to find ways to limit the impact of the beetle infestation on our operations. That is our responsibility.
It is government's responsibility to ensure that we are able to operate in a fair, competitive business environment, backed by regulations that give British Columbians and global buyers the assurance we are managing our forests sustainably. It is not government's responsibility to determine which mills should survive or which communities should bear the greatest impact.
Canfor cannot and will not support unilateral actions that would diminish our existing harvesting rights, and we certainly will not accept actions that only allow us to replace this volume by turning our backs on the principle of sustainable forest management and the wishes of the people of British Columbia.
We worked for decades to build an industry that British Columbians can trust and be proud of — proud to have in their communities. The mountain pine beetle impact means that our industry must rationalize production in the mid-term. This is an unavoidable reality.
Government needs to focus its efforts on diversification of economies in the Interior and not attempt to support an overcapacity in primary lumber manufacturing, much of which was predicated on short-term uplifts in timber supply to address beetle-kill stands.
Canfor welcomes the opportunity to work with government to bring economic stability to communities in the north, both through our efforts to run globally competitive facilities in B.C. as well as contributing to efforts to diversify local economies to mitigate the impacts of reduced lumber manufacturing.
Thank you again for the opportunity to present to you today. We would welcome any questions that you might have.
J. Rustad (Chair): Thank you very much. I'm going to take the prerogative to ask the first question, then followed by Harry. I see lots of other hands coming up after that.
I'm just thinking about, in particular, the low-volume stands. You've talked about partitioning those off and making sure that they would be operated in an area where…. Well, all areas impacted by the pine beetle will see a reduction in AAC at some point, whether that's two years or ten years out or, in the case of Williams Lake, perhaps 15 to 20 years out.
The question I have around the low-volume stands is: if volume is made available through identifying those stands that companies are currently not operating in and partitioning that out as you've suggested in terms of making sure that the volume comes from there, how should that volume be allocated? Should it be a new licence, or should it be attributed proportionately to the existing licensees on the land base within a supply unit?
M. Feldinger: John, our suggestion there is that that volume would be allocated under non-replaceable licence initially, under a competitive bidding process. The rationale behind that is that that would allow for proof of actual ability to operate in those types of stands.
After that non-replaceable licence was issued and had run its course, then government could decide whether to include that into the long-term timber supply appropriately.
H. Bains: Thank you for the presentation. Don, you talked about the social licence under which we must operate. You talked about the wishes of the people of British Columbia as a sort of guiding force.
That's one question I will put to you. The second one is you talk about where we could deal with the mid-term timber supply through using the unallocated timber.
The first one is…. We're talking about social contract, about the wishes of British Columbians when we are managing our forests. How do you explain, then, that last year there were five million cubic metres of raw logs exported from British Columbia — or thereabout — and in the meantime, we're talking about a shortage of logs in the local mills? How do you match that — the wishes of British Columbians — and social licence?
As far as I understand it, social licence meant that the companies would have the fibre available so that the shareholders would have the maximizing of the benefit from it, but at the same time, those logs are processed in British Columbia to provide the benefits to British Columbians.
How do you manage…? How do you explain that, to fit the argument that you are using?
I'll throw the second question as well, about the unallocated. Maybe you could suggest: where is that unallocated timber, and how do we allocate that?
D. Kayne: Maybe I'll let Mark take the second one, but on the first one…. First of all, in terms of Canfor, at least, we don't export any logs, to start with. From our standpoint, when we talk about social licence, we basically talk about responsible, sustainable forest management and making sure that what we are doing…. Not only for the British Columbians but for our customers globally, one of their single biggest concerns is that we're responsibly managing the forest resource that we've been charged with.
What Canfor has done is basically invested in the province, in manufacturing, as many of you know — I'm pretty sure you all know — in a significant way in the last four or five years. That's what we've been doing and what we continue to do, and we focus hard on continuing to increase our competitive manufacturing capabilities in British Columbia.
In terms of exporting logs, Canfor does not export any logs at all.
M. Feldinger: For the second part of the question, with respect to unallocated volumes, we allude to undercuts — areas that have not been utilized fully through this economic downturn. They tend not to be in the areas where the mountain pine beetle started in the process. Those areas tend to have full allocation, full utilization. But in some of the more northern areas, particularly where there were mill shutdowns, there are cuts in volumes that could be made available in the short term from an undercut perspective.
H. Bains: Just on that, the argument that we hear from the industry is that those are uneconomic to get to and to use that fibre. I mean, you could allocate them — that is, the unallocated undercut — but if they are not economically viable to get to or to use them, then what benefit would that be to deal with the issue that we're dealing with today?
M. Feldinger: Some of them have economic issues. Some of them just relate to the fact that the industry was operating at a very low level of capacity over the last four years. One suggestion that we have made is that government look to invest in resource roads. A big part of forest-harvesting cost is transportation, so an efficient transportation network is critical. Other industries and the general public, obviously, would be supportive of improved access as well. That could improve fibre supply on an ongoing basis, through that type of investment.
J. Rustad (Chair): I just want to ask one quick follow-up, just around the log export component. There is an undercut or an underutilization in the Kispiox district, I believe it is. Have you, as an organization, looked at that and determined whether or not it's possible to try to access some of that for your mill — say, in the Houston area?
M. Feldinger: We have not looked at it directly, John. Clearly, there are some mills that are a little closer than we are and that may do that. But I suggest that going forward, we will. As we all get strained for supply, we all tend to reach further afield. As long as the market will bear it, we would be looking to access additional volume outside our traditional areas.
E. Foster: We've heard this from several of the other industry presenters, and I kind of take it from that higher level down to the more local level, having been a mayor of a small town, a forest-dependent community. We talked about increasing the payloads on trucks — both chip trucks and logging trucks. Having been in the logging business, that's a great idea, but also having been in the mayor business, where you had to replace the roads, it's not such a great idea.
You're looking for government to improve the infrastructure and so on. This is a huge cost to everybody, and I get it. We want to access that timber from a little farther out. Traditionally, the industry has built the roads, and your appraisals give you your money back for your road construction. When you're only paying two bits for a lot of the wood, there's not a lot of….
Do you advocate going to a negative stumpage–type situation to help offset those costs, which would, of course, just turn it back to the government to pay for it? Is that the type of model you're looking at, or are you looking at just the Forest Service to go build the roads?
M. Feldinger: We're clearly not advocating a negative-stumpage situation. We think that that would be untenable from a public perspective. With respect to resource roads, government has created legislation which recognizes the value and the multiple uses of resource road corridors. Communities are connected via them. Oil and gas and mining have interests, as does the general public, in getting to areas that they can't get to today.
We would be supportive of government, as they develop infrastructure throughout the province, not just focusing on public highways but also focusing on areas of the province which, through access, generate economic revenue, wealth and well-being for the population. We think there's an opportunity there. And the stumpage system, as it exists today, we would still support. Where we build roads, we would look for reasonable offsets in the system.
B. Routley: Thank you for your presentation. I think it was very balanced in your approach and also clear as to what we're hearing from a lot of the stakeholders and even from an environmental point of view.
The question I have is about certification. I assume your company would be certified already. Have there been any conversations…? I had actually hoped to hear from some of the certifying bodies in terms of their position on this. Can you share with this committee what, if anything, would be the view of the certifying bodies on any of these changes, or are they aware and watching this process?
The second part is the sustainability you talked about in a climate-changing world. Has your company done any research on that, or do you have any views that you'd like to share with this committee on that?
D. Kayne: We've done a lot on both of those. I'll let Mark go through them.
M. Feldinger: On the certification front, we haven't had direct contact with the certifying entities. However, we have had contact with our auditors, who are essentially licensed under the various schemes to audit and monitor our performance on the land base.
We also have heard through direct contacts with a lot of the ENGO groups that this is on their radar screen, and they're looking very carefully at how B.C. handles this challenge. It would be our full expectation that if we were to propose anything from a provincial basis that would be seen as unsustainable, that would be seen as not looking after the communities' needs and other stakeholders' needs, we would have potential market exposure. And hence Don's comments earlier.
D. Kayne: Absolutely.
M. Feldinger: Sorry, your second question…?
B. Routley: Sustainability and climate change.
M. Feldinger: We have taken a look at the impact of climate change, as we see it, across the areas where we're replanting, in particular. We've been working with the government around what the appropriate planting zones or ranges are for different species, and have been planting more mixed-species stands than we have in the past — our basic response — expecting that diversity of species on the land base will help buffer against any risk from a climate change perspective.
B. Stewart: First off, I think we all appreciate how much reinvestment has been put into making mills efficient in a very competitive marketplace — however, I guess, at the expense of some of the communities where there have been mill closures and where there might be future ones.
I wonder what Canfor's position has been on looking at fibre utilization in terms of utilization of all the timber and making certain that it is being fully utilized. We know that it's not, so I guess the question is: what's your view in terms of trying to make certain we increase utilization?
Secondly, what is Canfor's position in terms of trying to create other economic opportunities and value-add? I know that you have developed plans for partnerships, but what do you see about the future? I mean, the future in these rural communities we visited…. With many of your plants, utilization is great, but the reality is that some of these people in these communities are looking at their future.
D. Kayne: Maybe I'll answer the second one first. First, certainly we see opportunities in residual fibre, biomass, biofuels and whatnot.
We see the whole energy opportunity as a large one. We're working extremely closely with our Canfor Pulp group, which, as you know, is heavily involved in the energy piece already. Certainly, we see, going forward, that there's going to be more and more. And not just pellets either, although pellets continue, in our view, to be a growing opportunity. We do see additional opportunities for heat and power and utilizing some of the residual fibre in some new ways than what we've seen before.
In addition to that, we see the whole economics of that residual fibre increasing. We see there'll be more competition for some of that residual fibre, going forward. It's clearly a key part over the next five years of our strategy — maybe even quicker than that — looking at some of the opportunities that are presenting themselves more frequently in that area.
Clearly, we see that as an opportunity. We've got some minor investments now, and I know Mark is looking at a couple of other ones, as we speak, in the province. So certainly it's an opportunity, going forward.
M. Feldinger: The technology as it relates to new uses — biofuels, torrefied pellets, biochemical opportunities on the pulp side — offers a promise of increased value. And increased value for that residual product will lead to new jobs. The questions just becomes: how soon and how many?
As Don mentioned it's clearly on our radar screen. We look every day. We spend time with people who have those new technology offerings. Separating the snake oil salesmen from reality is a bit of a challenge sometimes, but there is promising technology that is out there, and you can expect to see it coming to B.C. in the next number of years.
N. Macdonald (Deputy Chair): Thank you very much for the presentation. You've been very concise and very clear on a whole host of issues, and I thank you for that.
Now, you would be certainly aware of the leaked cabinet document. You will have known, I'm sure, that we had a presentation on Friday in Prince George from Minister Bell's representative dealing with the Burns Lake issue.
I think that what you've said here seems to be lined up with some of the advice that we were given at that time, where we were asked to not only deal with the Burns Lake issue but each community in a way that conflicts with, I think, what you've laid out here.
If that's an incorrect characterization, then you can correct me on that. I guess that's the first question — if that's a correct qualification. You started saying to be very, very careful, that you've been planning for ten years and have thought it all through and that your expectation is that all the work that's been done is not going to get thrown out. Is that basically what you're saying?
D. Kayne: Basically, yes.
N. Macdonald (Deputy Chair): Okay. I guess the second thing, then, is around area-based tenures. It's been laid out that there are advantages to it, but certainly it's not a panacea — right? There are complexities. I know when we were in Quesnel, West Fraser had an idea about the area that they would go for.
I would suspect that the area-based tenures that Canfor would be interested in would tend to be many of the same areas. I would expect — right? You would be going for places that would be workable immediately. So while there are advantages that the company sees, you're not suggesting that it's really a panacea; it's simply one of the tools. It that basically…?
D. Kayne: I guess, Norm, not necessarily a panacea, but certainly it's something that we would support. As you stated accurately, it's obviously a bit more complex than what we have in volume-based tenures. But certainly it does give more sustainability through the intensive forest management that it requires and everything else. We would support it, but in terms of being a panacea, we probably wouldn't describe it, necessarily, that hard or that positive.
M. Feldinger: Just one quick thing to add to that. The challenge is not just the creation of the legislation or the support to get them in place but actually physically placing them where you don't have parties who believe that somebody else has received a better deal and that the timber supply that they're using to support their cut may have been in your backyard in the past, and finding the right balance.
Having gone through one of these processes in the past…. It took ten years to get an area-based tenure on the land base in the Chetwynd area with one other company to work with. So in areas where you may have three, four, five or six, that's not a very simple process.
Clearly, we support it, but not easy to do.
N. Macdonald (Deputy Chair): Okay. Thank you.
J. Rustad (Chair): Thanks, and we are out of time, although I'd like to throw something on the table just to think about. I doubt it can be given a quick answer, but maybe it's something we can discuss afterwards.
The forest industry, of course, is made up across the province of small-, medium- and large-sized companies. In a constraining world the challenge associated with that could perhaps be disproportionate, just in terms of what that outcome is.
What do you see in terms of how the forest industry will look in ten or 20 years' time in terms of that diversity and opportunity on the land base? Is that something that we as a committee should be thinking about?
D. Kayne: We should probably take you up and come back to you on that, for sure, because that's a fairly long answer. So if we can do that, great.
But, I mean, to me, if you just think about it, I don't think there is any specific formula — small, medium or large — at all. I think at the end of the day it's going to come down to who continues to invest in the province and invest in their companies to make sure that they're competitive on a global basis and shows that long-term commitment and gets themselves in a position to be competitive on a global basis.
Whoever is able to do that, whether you're small, medium or large…. I don't think that's as important as making sure that you demonstrate that you're committed long term to the stakeholders in the province and your customers, particularly, as well, I guess.
We should give that a little bit more thought, and we can give you a lot more of a detailed response. But at the outset, I don't think it has necessarily anything to do with whether you're small, medium or large.
J. Rustad (Chair): Great. I want to thank you very much for the time and for the information you presented to the committee.
Our next presenter is Ken Zielke.
K. Zielke: I feel like I should ask a few of my friends to sit beside me here. There are a few behind me that I know. This is going to be a little lighter, so hopefully it will give you a bit of a break in the middle of the day here.
First of all, I'd like to thank you for the opportunity to make this presentation. I've pretty much written down everything that I'm going to say there, so you can almost follow along with the text. I'd also like to thank you for the efforts that you're making to go around the province and listen to British Columbians. I think that's really important. I think your task is a tough one. I have a lot of respect for you folks.
I am a registered professional forester in the Association of B.C. Forest Professionals with 30 years of experience working throughout the province, in other parts of Canada, the U.S. and Australia. In B.C. I've worked across the province for government, industry and First Nations. My focus has always been to try to help those in the forest sector address environmental and forest management challenges.
I'd like to start by saying that I've seen the effects of the mountain pine beetle infestation firsthand, and it is staggering. Economic impacts will also be staggering in the Cariboo and further north. Yet when I reflect on that, for me the seeds of this economic disaster were sown decades ago. I'd like to just take you back a little bit in time to talk about that.
I've got to be a bit careful because we've got a few ex–chief foresters behind me here. I might end up with a couple of knives in my back. Sorry, you guys. I'll apologize ahead of time.
By the 1970s and 1980s we were well engaged in harvesting and milling the massive blanket of lodgepole pine forest that covered the central Interior Plateau. They would spill all the way down through the Okanagan highlands down to the U.S. border.
Foresters know that lodgepole pine is a short-lived species with many natural stands starting to break up at 80 to 100 years of age. That comes right out of the textbooks. This tree is an interesting one. It has a death wish. It's the James Jones of forestry, really. Its ecological strategy is to die in huge numbers, in large, open, disturbances, because it needs lots of light to regenerate and grow. Its cones won't even open without temperatures over 50 degrees Celsius.
When it gets old it becomes highly susceptible to bark beetles and fire. This has been known for a long time. It's nothing new. But we didn't, or perhaps we couldn't — maybe we didn't even want to — log it fast enough. This is the part where I have to apologize to Larry and Jim behind me there.
By 1994, just using the Quesnel timber supply area, or TSA, as an example, lodgepole pine covered 85 percent of the timber-harvesting land base, which we refer to as the THLB. More than 40 percent of the THLB was in 60- to 120-year-old lodgepole pine with 25 percent in lodgepole pine greater than 120 years of age.
At that time the chief forester predicted that the current harvest levels could be maintained for 70 years. After that time I think it was reduced by about 14 percent just because of moving from old growth into managed forests. But there was no mention at that time of the highly risky assumption that the old lodgepole pine forests would last that long.
Us foresters — we're pretty optimistic. Unfortunately, now and then we do a fair amount of wishful thinking. So what's the point of that tale of wishful thinking?
Well, I'll assume you're familiar with the ancient parable of the goose and the golden eggs. Actually, when I did a little research on that little story, it goes back to the Middle Ages. I think it was designed for farmers, to remind them what was important when they managed their land.
For the past hundred years or so in forestry we've been focusing our attention on the golden eggs — all the economic and other benefits that we could get from the endless timber provided for free by nature. We hardly needed to manage the forests. But today, with most of the high-value valley-bottom old growth gone on the coast and the combination of logging, fires and mountain pine beetle in the Interior, we really do have to manage our forests — our goose — in a thoughtful, strategic manner.
How does this relate to the questions that are before your committee? Well, I'll get to that. Sorry if it's taking a while.
The forest industry, clean water, fish and wildlife, biodiversity, forest recreation and the scenic beauty that allows us to call our province the best place on earth are all golden eggs. The goose is the forest — the single greatest asset that we collectively own as British Columbians. I truly believe that.
As professional foresters, I believe that we can help to increase the mid-term timber supply in those areas hit by the beetle — somewhat — using a range of management techniques that your committee has identified. Harvesting marginally economic timber — Canfor talked about that a little bit. Changing timber flows with commercial thinning. Using fertilizer and other silvicultural techniques. In fact, right now as we speak, analysts and foresters are at work in the critical TSAs to determine how much these management techniques can contribute to that problem. But I think it's unlikely that these approaches will, by themselves, solve the problem.
This comes back to some points that I think the gentleman before me made as well, and that is that when it comes to harvesting timber from areas reserved for other values — such as visual quality, wildlife habitat and biodiversity — as a professional forester, I need to provide some words of caution.
These values were also impacted significantly by the mountain pine beetle. If we further increase those impacts now with harvesting, we owe it to the people of this province to quantify what those impacts are, how long they will last and just what we've gained in timber and jobs in the short term. And if we go there, it better darn well be worth it.
Now to my main point. Remember my story at the start. With abundant high-value old-growth timber and natural forest to buffer our mistakes in the past, strategic forest management has never really been our strength in B.C. In fact, Dr. Gordon Baskerville, the recognized expert by most professional foresters across Canada, just five years ago called B.C. forest management a trivial token, at best. Dr. Baskerville would be here playing what he calls his one-string banjo if he wasn't with severe health problems.
Yes, we are doing some things in the woods. We are indeed. We try to find the best wood that's out there, log it an environmentally sensitive fashion and then plant trees back. Now we're talking about fertilizing and other treatments in response to a natural disaster that we probably should have anticipated to some degree.
But the real problem here is that the B.C. timber supply areas, or TSAs that we have in British Columbia, have no ongoing strategic planning process that analyzes current conditions, sets strategic objectives, explores various management scenarios over time to choose targets that will guide all management activities while monitoring results and exploring management assumptions and then, after five or ten years, doing that all over again. This is what I would call true strategic management.
I learned this from Dr. Baskerville. It's exactly what a good pension fund manager does, though he or she would do it every five months. At least, my investment manager is doing that about every five or six months. They have to do this because they're in it for the long term, and the long term is highly uncertain. So it's an ongoing, never-ending process.
Our forests are like a pension fund to the communities of this province, and considering all the natural risks and the complexity of our B.C. forest ecosystems, forest management is also highly uncertain. And we're in it for the long term. I can't think of too many folks who manage something that lives as long as a stand of trees or a forest, or that is nearly as dynamic.
Climate change will increase this uncertainty that much more, with a projected large increase in areas burned by wildfire, many more large disturbances from a variety of insects and disease, and probably even more surprises lurking out there for us.
I therefore ask you, at this point in the history of B.C. forestry, to use this opportunity to urge government to organize our forest professionals in a framework of continuous operational strategic forest planning, management and learning that focuses on managing risk and increasing forest and economic resilience.
I believe we professionals can do this. Alberta and Saskatchewan are way ahead of us and have some good, contemporary examples. We just need government to put into place in B.C. a framework to facilitate such an approach. Maybe that way we will not just be able to manage our way through this current catastrophe but perhaps avoid or at least lessen the impact of the next one.
J. Rustad (Chair): Thank you. Hands have gone up all over the place. I should be starting with Norm.
N. Macdonald (Deputy Chair): I'll just be really quick. Thank you very much for the presentation. You mentioned other jurisdictions — in particular, Alberta and Saskatchewan. You said you had some concrete examples. Maybe just one or two, just to give us an idea of what sort of things you would say it would be wise to look at there.
K. Zielke: Well, I mean the approach that I described — which is similar to what a pension fund would do — to managing forests is being played out exactly with Alberta-Pacific in Alberta, Millar Western. This is all under the Alberta strategic planning regulation that's in place.
Now, one thing I should tie back to — because this is a question that came up with Canfor just before they finished — was: it is indeed easier to do that for licensees in Alberta because they operate under area-based tenures, but the province of Alberta does the same process in some of their tenures that aren't area-based — okay? It's the same thing in Saskatchewan with their area-based tenures, and there's a similar planning process in Ontario. Certainly, I think it is more challenging with volume-based tenures. I don't think it's impossible, though.
D. Barnett: Thank you for your presentation. I find it very interesting, in your last paragraph: "Organize our forest professionals in a framework of continuous operational strategic forest planning." How would you feel that the government should go about that? We've heard that forest professionals should be independent, in more of an arm's-length relationship with government. You've come up with another idea. How do you think that framework should be put together?
K. Zielke: Yeah. Don't give us rules, but give us a regulation that would provide a framework for planning and management. So give us structure, not rules.
D. Barnett: Independent from government?
K. Zielke: I think government has to play a role. I mean, every time you talk to foresters from companies like Canfor, they'll tell you that the strategic long-term interests in this province lie with the government and communities.
Probably Canfor is safe, but I would say most companies in British Columbia don't know if they're going to be here five or ten years from now. So it's very difficult to take that very long-term viewpoint.
Forest professionals working for companies work within…. I always say they work within a box. They work within a box that is provided by legislation and the corporate philosophy for sustainable forest management. That philosophy might expand that box for some companies if they are really concerned about social licence, but not necessarily. There are some forest professionals that only work to the law.
B. Routley: Very interesting presentation. Are you advocating basically to return to a B.C. Forest Service, somebody who actually focuses on putting our B.C. forests first?
We've kind of morphed into a…. I call it a permitting service, but I know that there are a lot of good people in there trying to make it work because that's what they have to do.
How do we do what's best for the forests of British Columbia? You talked about Alberta and Saskatchewan. Where in the world would you say are the best practices in terms of getting back to making sure that we're managing for the forest, for forest health, for all of the other values that are critical? Where are those examples?
Is it as simple as getting back to a professional reliance model that has some kind of meaning? When you say, "Structure, not rules," I'm really fascinated by that. I'm trying to understand what structure you're looking for.
K. Zielke: The Alberta planning regulation provides a framework for planning that guides foresters to produce plans and to manage the forest, but it doesn't tell them exactly how to do it. It's not going back to the forest practices code. Indeed, within most strategic planning processes, operational…. I'm talking about operational stuff. I'm not talking about land use plans, where we're dealing with stakeholders that are arguing about values.
Within a strategic planning process like this, you're setting targets and objectives that may not necessarily be met for one reason or another. There are surprises out there that can be economic, that can be biological. The key is that it's clear what you're managing toward, and if you don't get there, then the rationales are also made clear to the government. Then you clarify what your plan is to address that, to move forward and try to continue to improve to meet your strategic objectives. This is true strategic forest management, and I believe it's true professional reliance.
Alberta is less concerned that every little hectare has X number of trees per hectare planted on it, which we seem to worry endlessly about in British Columbia. They're more concerned that you've got a large unit of land, that it's being managed over the long term sustainably for all the different values and that there's clear, thoughtful balance of those things, and there are explicit targets set, and you're managing toward those targets. That to me would be the ultimate in professional reliance.
I think it lines up really well, this kind of an approach, and it's pretty easy to access. Some of the folks who helped design the strategic planning process in Alberta actually live in B.C. Dr. Gordon Weetman at the University of B.C., who's a professor emeritus now, was on that advisory committee in Alberta that helped design that planning regulation.
We're not without any experience in this in British Columbia either. Canfor has made some huge strides in their Fort St. John code pilot project, and I think what they did was incorporate a lot of the learning that they have east of the Rockies.
J. Rustad (Chair): I've got myself on the list next. We heard earlier that we should be managing for all forest values, basically on every hectare out on the land base. You have just suggested — and I just want some clarification — that rather than do that, manage over a landscape for values. Would that apply not just for the timber values but for all forest values, managing for the landscape as opposed to trying to manage for all values on basically every hectare?
K. Zielke: Yeah. I think a huge problem that we've created in British Columbia is that because we don't have this kind of planning process I'm talking about, we set ourselves up for expectations to manage all values on every hectare, and essentially we can't do that. We're managing a natural forest, and what you have is what you have. We've pretty much set ourselves up for failure with that scenario.
The only way to manage and balance these various objectives is to do it scale-appropriately and to set targets and objectives and manage toward them at the appropriate scales across the landscape — in watersheds, in stands and across the management units. Foresters can figure that out with the appropriate support from wildlife managers and so on. But again, we don't have that. There's no requirement for foresters to get together within a timber supply area to engage in a process like that.
J. Rustad (Chair): I wanted to draw from your experience. You know, in other jurisdictions around the world, places like Sweden, New Zealand, Alberta — other places that have different models, obviously, in terms of who owns the land and those sorts of things — management regimes that are on those land bases.
I'm just wondering if you can comment around that. I ask the question directly to you around area-based management in B.C. and whether or not a model that incorporates perhaps not 100 percent but more area-based management in B.C. might be more successful at being able to achieve landscape objectives.
K. Zielke: Yes. I definitely think that the area-based model…. It would be easier to engage in this sort of planning process with area-based tenures. Then you're dealing with one licensee, with one philosophy, with one group of planners, without hidden agendas and so on. It is more challenging to get competing companies together within a TSA and try to agreeably manage for the future together as a group, but there are, as you noticed in the previous presentation, challenges with that as well. But I definitely think, and I think most foresters would agree, that area-based tenure…. They would welcome more area-based tenures in this province for that reason.
In terms of other jurisdictions, I would have to say that there's success in a range of models. The one in British Columbia is quite tenuous, where you've got the partnership between government and industry, unless you have sort of an area-based tenure arrangement connected to it.
I'm not aware of too many other highly successful volume-based arrangements where you've got multiple licensees interacting like we have that we're managing in a sustainable manner in the way I've described. But there are some completely other models out there for managing on public lands.
In Tasmania, which holds most of the natural forests in Australia, or a good chunk of them, they took their forest service and made it Forestry Tasmania, one company, to manage the whole land base. They, instead, have wood supply contracts with milling companies. That seems to work fairly well, although they'll tell you, if you're down there, that they have environmentalists that make our environmentalists look rather tame. If you read some of the stories in the papers and whatnot, you'll understand that. It seems to be a model that's working well, but it's quite different from the direction we've decided to go.
B. Routley: I've become concerned from what I've heard out in the field of kind of a Wild West or gold rush mentality going on right now. I talked to a forester who said that he'd been dropped off in a helicopter to go and ribbon off areas. With this volume-based situation, could you explain to us a little bit about how that process works? I mean, is it basically that simple — that all they have to do is look for a bare spot of ground that nobody else has put ribbons on?
It just makes no sense to me, I guess, coming from an area that had primarily private lands and tree farm licences — the notion that there's this vast wood basket, that everybody just kind of ribbons off areas whenever they feel like it. Maybe it's more complicated than that. I hope it is. But maybe you'll fill us in on…. What's the benefit of having that kind of Wild West approach?
K. Zielke: Yeah, I don't think there is any benefit. You know, the areas that you're talking of, the Quesnel area — you hear about it up in Quesnel and Williams Lake and so on. It is more complicated than it used to be, and it is this large basket of salvageable, dead pine and all the salvage licences that overlap the volume-based tenures and the charred areas and so on. So it's a race, and it's time-limited. That pine's only going to last so long, and everybody's kind of racing to keep those mills alive. They've all expanded to deal with that volume.
So I think it is somewhat of a unique situation. That doesn't describe all of the volume-based TSAs in the province.
J. Rustad (Chair): Ken, thank you very much for your presentation and for spending some time with us here today.
K. Zielke: Okay. Thank you. I hope it was useful.
J. Rustad (Chair): At this time the committee will be recessed. I'm not going to set a time for back because we may have to come back a little bit early other than the next presenter, which will be at 1:50. For committee members, we may have one additional presenter that comes in a little early, so we'll have our lunch break now, and we'll see — have to play that a little bit by ear.
The committee recessed from 12:48 p.m. to 1:55 p.m.
[J. Rustad in the chair.]
J. Rustad (Chair): Good afternoon. Welcome back to our Special Committee on Timber Supply's first day of hearings here in Vancouver. We're just back from our committee recess.
We will now go to our first presentation of the afternoon, which is L&M Lumber.
Dave, we're going to have to get you to introduce yourself.
Over to you, Alan.
A. Fitzpatrick: Good afternoon. First of all, thank you for the opportunity to present to the committee today. My name is Alan Fitzpatrick. I'm the general manager for the Nechako Group of Companies up in Vanderhoof and the president of Nechako Green Energy.
With me is David Watt, RPF. He's the woodlands manager for the Nechako Group of Companies and for L&M Lumber.
First of all, what I plan to do is just to give you a brief background on who we are and what our companies are in Vanderhoof to give you a little bit of context. Then I'll pass the balance of the presentation over to David. He has some direct recommendations for you.
The Nechako Group of Companies is four companies located up in Vanderhoof: L&M Lumber, Nechako Lumber, Premium Pellet and, our newest company, Nechako Green Energy. The four companies have been in Vanderhoof for over 43 years. They're locally owned and operated, and they're the second-largest employer in Vanderhoof.
Each of the four companies is known to be competitive, highly efficient and very innovative leaders in their respective fields. I'll just give you a few examples of that.
L&M Lumber processes about 800,000 cubic metres of timber a year and produces about 250 million board feet of stud lumber. L&M Lumber was the first sawmill in North America to bring the HewSaw technology into Canada to process the small-profile pine that's in the area.
We were also the first company to have an opportunity licence to harvest the small-profile pine. At that time it wasn't being utilized in the area, so it was kind of a unique profile. L&M Lumber was also a beta test site for the log crack detection software that's widely used in the industry today.
Nechako Lumber, the planer, is known as the first company to have stud lumber in Japan. We're still considered to be the highest-quality stud in Japan today. We also helped develop the high-speed planing technology and the grade-scanning technology that's used, in fact, around the world today. We've had visitors from all over the world looking at our technology. We're still considered to be the fastest planer in the world.
Premium Pellet produces about 190,000 metric tons of wood pellets per year, sold primarily in Europe. At the time that it was first constructed, it was one of the first pellet plants in Canada and was at that time the largest. We're known in Europe has having the highest-quality pellets in North America. I can say that because we're the only producer in North America that qualifies for the German DIN Plus quality certification standards.
Nechako Green Energy, our newest company, will soon be producing about two megawatts of electricity from recaptured heat throughout our operation. It'll be enough electricity to power the pellet plant. We're the first sawmill in Canada to utilize that technology to go from waste heat to electricity. We were also the first sawmill to successfully negotiate a load displacement agreement with B.C. Hydro. We understand that some of the upcoming agreements will be sort of loosely based on the process that we went through with that.
In the future we plan to explore additional energy opportunities, including the use of the harvest residuals.
All four of those companies have been successful because of innovation and investment. We look at innovation not just as technology, but it's a culture. It's a culture of always driving to be the best and, I guess, about not being afraid to be first.
We don't look at the mountain pine beetle as the end of the timber resource in that area. We look at it as a transformation of the resource from purely lumber to lumber and energy, whether it's electricity, pellets or energy of another form.
We have a very strong partnership with the Saik'uz First Nation up in Vanderhoof that we're very proud of. We have fibre agreements for sawmill residuals that we make pellets from with Canfor plateau division and with Conifex Fort St. James. And we have a very longstanding and supportive relationship with the district of Vanderhoof and the Ministry of Forests in Vanderhoof.
With that, I'll pass the presentation over to David Watt.
D. Watt: Thank you very much. As Alan said, my name is David Watt. I'm the woodlands manager for L&M Lumber.
I guess before I begin our presentation, there's a question I'd like to put forward for the committee to contemplate. That question is: how do you want the forest industry to look after the mountain pine beetle epidemic and the reductions in the annual allowable cut?
The recommendations that are made by this committee have the potential to significantly alter the shape and structure of the B.C. forest industry moving forward. Currently we have an industry that's made up of large, integrated multinationals, medium-sized multidivisional operations as well as small operations and remanufacturers.
It is our belief that you need a diverse group of operators, such as we have here in British Columbia today, actively participating in the forest industry in order for this industry to be healthy, sustainable and economically viable into the future. If the recommendations from this committee do not consider the potential effect of changes to various sectors within the forest industry, they could inadvertently render one sector of the industry not economically viable. So we do have concerns with what happens going forward.
I want to start out by giving you a quick picture of our current fibre requirements and supply for L&M Lumber. Currently L&M consumes approximately 800,000 cubic metres of timber per year from the Prince George, Lakes and Mackenzie TSAs. The breakdown of that timber is roughly 72,000 metres from replaceable licences, 250,000 from a non-replaceable small-pine licence and about 480,000 cubic metres from private landowners, B.C. Timber Sales, whoever else we can buy it from.
Just to put that in perspective, what that leaves L&M with is 9 percent of our required timber coming from replaceable sources. That's a significantly lower amount than most licensees in the province have.
Options to increase timber supply. Before speaking to the individual mitigation measures that are being proposed, I would like to speak to the values and principles that we feel should guide the decision-making process. We feel that all decisions should be based on sound scientific principles and research. The work must be completed by qualified professionals and industry experts. All options considered by the committee need to be evaluated using a form of cost-benefit analysis that recognizes both the economic and social values that are being impacted.
The decision analysis must be completed in a timely fashion, as time is of the essence in dealing with the critical issues that are confronting us as an industry. Decisions and recommendations made should not pick winners or losers but should benefit TSAs as a whole and allow the industry to compete fairly for the available timber.
Harvesting areas currently constrained from timber harvesting. Many of the land use plans that exist in British Columbia were completed before the mountain pine beetle infestation and are dated — in some cases, not as relevant to the land base as they were ten years ago. These plans need to be dynamic and have the ability to change as changes occur on the land base. In other words, these plans need to be updated and maintained moving forward.
Before any updating can occur, we need to review our current forest inventories and ensure that they are accurate. Without understanding where we are, we cannot plan the trip to where we need to go. As we develop these inventories and begin reviewing the plans, the community as a whole must be given the opportunity to participate in the process in a meaningful way.
Although this review process is key to the developing of the LUPs, it should be noted, however, that time is of the essence in making these decisions. Possibly, an expedited process should be looked at to gather input and help reach consensus at the community level.
Increasing harvest from marginally economic stands. I think this is something that L&M does have a fair amount of knowledge in and does have some ideas on. Harvesting from stands that were previously considered uneconomic is a concept that L&M Lumber is very familiar with.
L&M started production in 1973, sawing pine from agricultural leases in the Vanderhoof area that was previously piled and burned due to its size. For the past 25 years L&M has operated on two small-profile pine licences in the Vanderhoof district that were created to deal with problem forest types that were not being utilized.
We believe that harvesting these types of stands could be part of the solution for our current timber situation. However, there are some factors that the committee should consider.
Inventories must be updated so that these stands can easily be identified. There are some current rules in the appraisal system around cutblock blending that should be reviewed to allow for the mixing of economic and uneconomic stands. If there is to be a partitioned licence that is restricted to these stand types, ensure that the other licensees are required to give the restricted licensee the right of first refusal on any candidate stands. When the other licensees harvest at the top of the restricted profile, the restricted licensee is very quickly left with a profile that's uneconomic.
Changing administrative boundaries. Companies have invested in operations based on the current administrative boundaries and have been proven sustainable performers in providing stable employment and stability to dependent communities. That being said, if AAC is not being utilized within a licence or administrative area, the province should ensure that the volume is utilized in a timely fashion. This unutilized volume comes at a great opportunity cost to the Crown in the form of lost revenue and results in pine stands being considered for biofuel instead of sawlogs.
Accelerating timber availability. Borrowing timber from our future in order to keep the mid-term timber supply higher in the short term is a concept that concerns us a great deal. We have concerns with how our certification body's customers and external stakeholders may view this practice as being unsustainable.
Shifting to more area-based tenures associated with more intensive management. While we agree that area-based licences have certain features that are generally better managed for long-term sustainability, there are some significant drawbacks. Given the profile in the Vanderhoof district, for example, there may not be sufficient area to provide long-term tenures post–mountain pine beetle epidemic.
Increasing the level of intensive forest management. We agree with the concept, especially when you add it in with accelerating timber availability. We agree with the concept of intensive forest management on the most productive sites. However, the government needs to look at several items prior to proceeding with this direction. We need to develop a detailed cost-benefit analysis that can be used on each project to ensure that there is an economic payback.
We need to ensure that there's adequate long-term funding for this program in place, as we have seen many programs such as FRBC, FIA, and so on and so forth, come and go over the past 15 years due to other funding priorities from government. We need to ensure that the program has a streamlined and efficient administration process at the beginning of the program.
As a province, there are certain steps that we can take to help mitigate the effects of the mountain pine beetle on our future timber supply. We feel these steps include ensuring that the chief forester's partitions to the AAC are monitored and enforced in a standardized way in all affected TSAs. Amending licence documents to include the partition restrictions, in effect making it a hard partition, might be something we want to look at.
Ensuring that the harvest of damaged pine stands is maximized in all districts. Harvesting of non-infected pine and other species must be minimized in order to have an adequate mid-term timber supply. We need to ensure that regeneration delay is minimized on areas which have been affected by the mountain pine beetle, major fire events and major blowdown events.
We need to ensure there are adequate funds available to deal with the other forest pests such as Douglas fir bark beetle, spruce bark beetle and other forest health issues that have the potential to reduce the volume of species that will help fill that mid-term timber supply.
We need to encourage the spirit of investment and innovation that exists in our industry today.
If and when our AAC is going to be reduced, we need to use a slow and stepped approach rather than a deep dip with an early recovery.
I guess that concludes our presentation.
J. Rustad (Chair): Thank you very much.
Questions from members?
N. Macdonald (Deputy Chair): First, thank you very much for the presentation.
I'm interested not only about the number of companies that are involved here, but also all are after a slightly different product. Could you just explain how the companies…? Is it similar ownership? Maybe that's in the presentation, but I don't know. Is it similar ownership? What brings these various companies together, in terms of their organization?
Also, how do they cooperate in terms of product? Maybe just explain that relationship a bit more.
A. Fitzpatrick: Certainly. We have two of our shareholders here today. Lloyd Larsen and Michael Manojlovic are sitting in the back of the room. I refer to them as the L and the M of L&M. The Stewart and Andersen families in Prince George, who also own Sinclar, own a portion of the mill. So there's common ownership.
All of the fibre on site is basically used for those operations. We bring the log in. We have the primary breakdown in the sawmill. The lumber goes to the planer. All the sawdust shavings and dust are captured and used in the pellet plant. And the bark that comes from the tree…. We no longer have a beehive burner. We created an energy system about 12 years ago to burn the hog to heat oil to heat the kilns to dry the lumber.
So all the fibre is used on site. All of those operations came from the idea that we review our operations, and we look for ways to monetize or create revenue streams from flows of what would otherwise be waste.
We like to say: we use everything of the tree but the shadow. We are looking at taking that philosophy out into our harvest residuals as well.
N. Macdonald (Deputy Chair): Okay. That's the other issue that we've dealt with this morning but also has come up repeatedly: how to economically get the full value from what is cut, rather than just burning off waste?
Is the configuration you have something that you think is really helpful in that regard, in getting greater utilization of the resource?
A. Fitzpatrick: We think so, yes. The solution, I think, in the harvest residuals may not be one large solution or one single solution. We think it's going to be a combination of things. We are investigating right now to find out the exact volume we have of harvest residuals, how much we think that we'll be able to access and looking at a way that we can make it economical.
At the current point it's very difficult, as you know, to make it work, but the factors are changing. We believe that if we use all of the residuals in various different formats, we will be able to eventually make some economics of that.
J. Rustad (Chair): We've got four other people that want to ask, and we've got just over five minutes. So please keep questions and answers brief.
B. Stewart: Thanks very much. Great presentation.
Just a couple points of clarification. On your cutblock blending. Can you just explain that? Secondly, the candidate stands. I just want to better understand those two terms.
D. Watt: Cutblock blending. Basically, when you develop a cutting permit, there are rules in place right now that all cutblocks must be within ten kilometres of one another. By going past that ten-kilometre rule, there's the ability, at times, to mix in sort of the upper end of a profile with the lower end of the profile in order to get a stand that is a complete cutting permit that is economically viable for a company.
If you end up with something that everything's too small or low volume per hectare, you can't necessarily develop an economic harvest plan.
B. Stewart: The other one was the candidate stands.
D. Watt: A candidate stand would be a stand that meets the requirements of whatever that partition could be. It could be a stand that, as we've mentioned, is lower than 140 cubic metres per hectare. Or in other cases it's for our small pine licence. A candidate stand is generally a stand that's less than 0.19 cubic metres per tree.
B. Routley: Because of the innovation that you've talked about, I guess you'd be one of the best candidates to ask this question of, that I've had burning on my mind. If you were Burns Lake and if you had a mill that burned down, would you be looking at something more innovative or different, faced with the fibre supply changes and the pine beetle?
You've obviously talked about high-quality pellets that are desirable throughout the world, I assume. We've heard about emerging technologies. I guess my question is: if you were given a similar situation, would you be rebuilding a mill, or would you be putting in something new and innovative?
A. Fitzpatrick: Wow. I find that difficult to answer on behalf of another company. There are a lot of factors….
B. Routley: I don't want you to answer for them — what would you do?
A. Fitzpatrick: What would we do? I think the model that we have, where we use all of the resource and we get as much revenue from each particular part of the resource as possible. I think the economics of rebuilding would have to weigh on that factor because we have a mill that's in existence right now. So it may be a different factor, including the cost of capital and what the cost would be of rebuilding.
You might find the cost of rebuilding prohibitive to use that model, but for the existing plant that we have, it definitely is the model that we're in favour of.
D. Barnett: When the chief forester gave the uplifts in the AAC because of the mountain pine beetle, did you receive an uplift?
D. Watt: No, we did not.
D. Barnett: You did not?
D. Watt: Well, we did receive an uplift through the innovative forest practices agreement, IFPAs, in Prince George, and that lasted for five years. We did end up with another small uplift through the IFPA in the Morice and Lakes, and that was a three-year uplift.
D. Barnett: Is your business model that you have here based on the uplift or based on the AAC before the uplift?
D. Watt: I would say that our business model is based on the AAC before the uplift.
H. Bains: A couple of quick questions. First, so that I understand your company a little better. You gave pretty good information. You said you utilize about 800,000 cubic metres per year. How many jobs would you say are directly created out of that 800,000 cubic metres?
A. Fitzpatrick: We would have 250 processing jobs, and then I would ask Dave approximately how many harvesting jobs.
D. Watt: We probably have approximately 115 to 120 harvesting jobs on a full-year basis.
H. Bains: So the other jobs that you have mentioned, whether it's energy production or other: would you not tie those along with them as well? It's a by-product being used — right?
A. Fitzpatrick: That's included in the 250. All four companies are located on the same site.
H. Bains: So about 400-some jobs, I guess.
A. Fitzpatrick: Approximately.
H. Bains: The other thing is that in your presentation you talk about changing administrative boundaries. You talk about companies invested in operations based on current administrative boundaries and that they have been proven sustainable performers. But then you went on to say that that being said, if the AAC is not being utilized by a licensee or an administrative area, the province should ensure that this volume is utilized in a timely fashion because if it's unutilized volume, you went on to say, it comes at a great opportunity cost to the Crown.
Can you expand on that? How can the province actually ensure that the volume is utilized in a timely fashion, if it's not harvested, I guess, according to the AAC volume?
D. Watt: I would have to put a little more thought into that. Basically, what we were talking about was the fact that dealing with the dead pine stands and watching the speed at which some of these stands are deteriorating today, there is a huge opportunity cost in not harvesting some of these pine stands in a timely fashion.
If we have areas where pine stands are being left, not being harvested and the AAC is not being used, I think it's incumbent upon us to make sure that we deal with those stands in a timely fashion in some way, shape or form so that they don't end up falling down and becoming, I guess, silvicultural slums, moving forward, that we have to spend a great deal of money to try and fix up and repair.
H. Bains: Would you go as far as saying allocating that unused portion to someone who maybe is willing or able to utilize it?
D. Watt: Yes, I guess I would.
E. Foster: Because you have all the facilities — you have the hogger and the pellet plant and so on — are you bringing fibre in from the bush smaller than your sawlog requirement? Are you going to a two-inch top?
D. Watt: At this point in time we are not. We go down to a 3¾-inch top, which is a little smaller than a lot of other sawmills, but we're not going down to a two-inch top.
J. Rustad (Chair): We're over time, but I just want to ask one quick question on your small-volume pine licence. Your small-volume pine — do you take that from areas that may have been burned years ago and have come back with a very high-density type of fibre? Is that the type of wood that you're looking for?
D. Watt: Yeah, generally they're stands that have come back either a very small piece size because they're very dense or poor growing sites — anything that basically produced a less-than-optimal tree in most other sawmills' minds.
J. Rustad (Chair): Do you think there's an opportunity to look at that type of stand where you may have 20,000 or 30,000 or 40,000 stems per hectare, and rather than cutting it all, doing a selective cut and leaving 2,000 or 3,000 or 4,000 stems per hectare behind? I'm just wondering if you've looked at that as a possible management, and if not, what would be a barrier to doing that type of approach for you?
D. Watt: We haven't looked at it up to this point. I think the key things that we would have to look at are the economics behind doing that sort of operation. It is different than the logging that we're normally used to in northern British Columbia, so there would be a learning curve for our harvesting contractors and their operators in order to carry out that sort of operation, moving forward.
J. Rustad (Chair): Thank you very much for your presentation and for providing us with the material.
Our next presenter is Pacific BioEnergy Corp.
B. Bennett: It's me again. Thanks very much for allowing me the opportunity to speak. Obviously, I've been involved in a couple of other discussions or other groups that have presented, so today I want to focus on the wood pellet business. I really want you to get a sense of what the opportunity is in the future.
We talked a little bit on Friday. Obviously, it was involved with the Nazko band. Today we talked about some specific policy-related things, but again, today I just want to give you a sense of what the wood pellet business is all about.
I'm Brad Bennett. I'm vice-president of operations for Pacific BioEnergy. We're a Vancouver-based, privately owned company. Currently we're focused, obviously, on the wood pellet business and the export side of the wood pellet business. We see wood pellets as, really, first-generation biofuels.
Again, we've focused on the policy side. I want to focus a little bit more on the business. At Pacific BioEnergy we believe we're one of the leaders in the production of wood pellets for the export market. We do not produce anything for what we call the bag market or the commercial greenhouse market.
If you kind of break the market down, it's roughly about 25 percent greenhouses, 25 percent bag product and about 50 percent, actually, for the export markets.
Our plan. We currently have a facility in Prince George. It's one of the largest in the world at 350,000 tonnes or just under 800,000 cubic metres of consumption. We have plans to grow our business to one million tonnes by the end of 2013 or roughly 2.2 million cubic metres of consumption. Right now we are in the sort of detailed engineering stages of a facility in Chetwynd, and we have a couple other pipelines of projects throughout the province. Again, on Friday you saw some of the work we're doing with the Nazko band.
Our facility in Prince George was just recently expanded. It was a joint venture with a company called GDF Suez, one of the largest integrated utilities in the world. Its gross sales are somewhere in the neighbourhood of €125 billion.
The reason they did that is they were making a conversion of one of their coal power plants in a place called Ghent, Belgium, of about 225 megawatts to go from what they call co-firing, which is firing a blend of coal and wood or wood pellets to 100 percent biomass. That was a billion-dollar investment that they made in that facility, and their whole objective was to secure supply for that facility in the long term. Part of their fibre procurement strategy was to take an ownership position in our facility, along with buying other wood pellets throughout the world.
Just to give you a sense, also, of the scale of some of the operations worldwide, in the last three years there have been half a dozen facilities that are all larger than the last facility. They're upwards of a million tonnes or 2.2 million cubic metres. There was a recent plant done in Russia. There was one done in Waycross, Georgia, recently that was 700,000 metric tonnes. So again, even our facility would be in the top ten worldwide. There are larger facilities being built throughout the world today.
What I'm trying to get to is that there's a sense of growth. There are opportunities throughout the world. And British Columbia, given the right circumstances, is poised to take advantage of some of those opportunities.
Just in the brochure you can see…. This is typical pile — our facility in Prince George. When we did the expansion, all of that expansion was predicated on using forest residuals as the additional raw material supply. That's a classic example of some of the piles that we're grinding up today and utilizing in our facility.
Second page. As part of our growth strategy, it was quick to understand that if you want to be in the game in forestry in British Columbia, especially if you want to go out to the bush, you have to have forest assets. So we purchased…. We have two forest licences: a large forest licence at Quesnel of 700,000 cubic metres for 15 years and a replaceable forest licence in the Kispiox TSA.
The Kispiox one — not only is this a wood pellet biofuels business an opportunity for the beetle-kill areas, it's also for areas like the northwest, where there's a problem. The sawmilling sector and the pulp sector there have pretty much declined to nothing. We believe there's an opportunity in that region also.
Just go back to the business thesis. Why is this business a good business? What's the growth opportunity, etc.? The global demand for renewable energy is obviously growing, despite the recession. Prices for our product today are as high as they've ever been, despite the Euro going from about 145 to the Canadian dollar to about 128. So in real terms, the prices are still going up.
Wood-based biomass, if you look worldwide at the alternatives for renewables, is one of the most-abundant, least-cost opportunities out there, and B.C. is, frankly, poised. We have good infrastructure. We have a large supply. Obviously, the mountain pine beetle creates an opportunity for us.
Wood pellet business. If you look at it, what's happening is that a lot of the jurisdictions are being driven by policy changes that are driving them to divert away from fossil fuels to use renewables. If you have a series of old coal plants, the quickest and easiest and least costly on an overall basis including capital is to use wood biomass in those old coal plants. A lot of them had made conversions, again, to use what they co-firing, which is firing about a third of their plant on wood and about two-thirds on coal. A lot of them are making the plunge to 100 percent conversion.
Again, what's the market size? Worldwide the use of coal…. Hey, I'm a kid that grew up in British Columbia. I thought power came from hydroelectric dams. Frankly, the rest of the world is burning coal for electricity.
They're burning six billion tonnes of coal, which is almost 18 billion cubic metres of wood biomass equivalent. So really, if you kind of do the math — at least I did it on the back of an envelope one day — we just don't grow enough in the world to support the use of coal that's going on today, and it's obviously growing.
The current market today for wood pellets is western Europe, and of course, we're the most freight-illogical place to be supplying that market. It's currently roughly about 15 million tonnes. Expected growth to 2020, on the very low side, is in the 25 million, and some numbers are as high as 200 million tonnes of wood biomass or wood pellets. But 100 million tonnes seems to be the right number when you talk to a number of the experts.
What's driving it? Of course, the EU mandate of a clean energy policy that was implemented in 2005, a 20 percent reduction of greenhouse gases by 2020. The European requirement alone of wood pellets, that growth, is somewhere in the neighbourhood of 60 million tonnes.
South Korea has implemented what they call a renewable portfolio standard. It started in 2012. It starts out at a very low level, and it's ratcheting up every year. There was a BioEnergy Conference in Prince George recently — a lot of interest from the Koreans. Actually, in the latter part of this week I'm going to spend…. Again, more education, more dialogue with more large Korean utilities that are getting ready to utilize biomass and utilize wood pellets. Again, today the market is essentially zero. It has the opportunity to be probably in the neighbourhood of 15 million tonnes — the current size of the market today.
In 2011 B.C. exported about 1.2 million oven-dried tonnes of wood pellets. We're on course for about 1.6 million tonnes this year, and I believe the inherent capacity within the province with sort of projected growth is somewhere in the neighbourhood of eight million tonnes, or roughly, almost 18 million cubic metres of wood pellets.
If you kind of look at pricing today…. And if you've heard me talk before, it's about sharing the costs of what's going on in the forests today. Currently, today, with Europe being the primary market and the euro being at about a 128 we can support roughly in the low $30s per cubic metre of cost on a cash break-even basis. If you just adjusted the euro to a more normalized level of 145, 155, you're talking about $38 a cubic metre.
We're expected to exceed $40 a cubic metre within the next five years. Therefore, we will be able to, on a cash break-even basis within five years, sustain the total cost of harvesting, roadbuilding, etc. So we can participate in utilizing and propping up the use of those marginal stands.
Just a few comments on the mitigation of the mid-term timber supply. When I look at it: VQOs, looking at harvesting potentially in protected areas or old-growth management areas or adjustment of boundaries…. Frankly, I think those are tinkering around the edge. The really key thing is to maintain the size of the timber-harvesting land base. What we have happening today is as these stands deteriorate and the shelf life for sawlogs deteriorates, these stands are actually moving from the timber-harvesting land base into the non-timber-harvesting land base.
Our philosophy is: "Let's get this industry going." We can help at least mitigate the erosion of the timber-harvesting land base and potentially expand the size of the timber-harvesting land base.
Some of the recommendations are…. Historically, the chief forester has looked at what is current practice as it relates to what stands are part of the timber-harvesting land base. We think this committee should direct the chief forester to have a look at some of the forecasted growth that's potentially going to happen. We've got an industry here that potentially is going to expand by fivefold. It's already shown evidence that it's growing, and it will continue to show evidence that it's growing.
Obviously, as we move forward as an industry, we need to have security of supply, and we need to have long-term access to fibre. Again, our customers went through…. In 2007 they sent ships here, and there weren't any pellets to put on them because we were completely hinged to a sawdust-and-shavings type of marketplace. We were required at that point in time to go out in the bush and figure out how to utilize forest residuals, which we've done as an industry, and we currently do today.
Again, they are demanding, though — both our bankers and our customers — that you have long-term access to trees, essentially, so that if the sawmills stop or something doesn't go right, you can still support and get….
Again, we've got billion-dollar plants that are relying on supply from us, so their key thing, as our CEO will say, is that they can keep the lights on. In a lot of cases it's not about price; it's about security of supply with these customers.
Again, the expansion in Prince George — we would not have been able to do it without the forest licence that we bought in Quesnel. Neither our bankers nor our customers would have allowed us to do it.
Forest residuals today, for the most part…. We have had some success — the project in Chetwynd, for instance. Canfor has entered into long-term agreement with us on forest residuals. Elsewhere in the province we've had really limited success, and any of the access to forest residuals has been more or less spot market or it has been without any price, certainly. It's almost been an auction at a block-by-block level.
One thing we'd ask the committee to be mindful of is using high-priced B.C. Hydro contracts to prop up the economics. I think it's a tool. It definitely has its place in this. But understand that we are all in competition for fibre in the marketplace. We had an example with the pulp mills recently where there was federal money through the green transformation program that they were allowed to expand their green power generation capabilities — so essentially got free capital. Then they went out in the marketplace and secured it with fibre. A lot of that fibre came at our expense.
All I'm saying is that it's a tool. I think it's going to work. But be mindful of the impacts that propping up these stands with, you know, exorbitantly high-rate B.C. Hydro contracts, with the impacts, could be.
Sort of in conclusion, we're here to stay, I think. I think we're going to be here in the long term. I think there needs to be a set of forest tenures that gives us the security that we need, some carrot-and-stick approach to contractual business requirements. There are things in certain parts of the province, like infrastructure…. We talked on Friday about power. The northwest is still struggling for an opportunity. I mean, the pellets from Pinnacle's plant in Burns Lake go through North Vancouver. They don't go out through Prince Rupert. They're trying to solve that problem, but it's not solved today.
There are some basic infrastructure problems also. It's really about accelerating the sector so we can prop up the timber harvesting land base.
In the last picture there, you'll see…. This was just about three weeks ago. There are two Korean companies represented there. The lady in the centre is actually from Jobs and Tourism. Those companies combined generate probably four times the power that B.C. Hydro does. They're there. They're on their investigation tour. They're here to find out what the opportunity is in British Columbia. Obviously, from a freight logical perspective, Korea is a much more attractive market to us than Europe.
Anyway, thank you very much.
J. Rustad (Chair): Thanks very much. I'll go to Norm first.
N. Macdonald (Deputy Chair): Thanks. It's good to see you again, Brad. I think it's the third hat you've had on.
B. Bennett: No more hats, guaranteed.
N. Macdonald (Deputy Chair): Just to understand, you have fibre. You have sawlogs that are available to you, and you use those, presumably, for trading to get the residuals that you need. You can correct me if that's wrong.
Then just to understand the economics of this, because you pull in from Quesnel and around Kitwanga…. You're pulling in, or is that being held for the future? How does that all work? What are the economics of moving this wood around for you to the centralized plant that you have?
B. Bennett: To be truthful, the economics I describe is really stuff that's local to Prince George. When we did the Prince George expansion, our customer or our bank wasn't really too concerned what the cost would be on the fibre if we had actually logged those stands and delivered them to Prince George. Frankly, it's cost-prohibitive. We can't do it.
What was important to them was that you had access to trees, no matter what the costs were, so that you could ensure that this supply chain of wood pellets would continue. It really wasn't a cost thing.
On the utilizing it as a trading chip, again, as I described earlier, the problem was we've had this flood of AAC that's been out there. We went around and said: "Are you interested in trading wood for sawmill residuals?" Now, that situation…. The AACs were quite high. The utilization in the industry was quite low. That is starting to come back into balance today, and we're starting to see that engagement where companies are interested in saying: "Hey, Brad, you know, I'm willing to trade my sawdust and shavings or my forest residuals for access to your sawlogs."
I think that engagement, that tool, is starting to work for us.
As far as Kitwanga, it's really just a chip in the game in the northwest that we're planning to build something around in the future.
E. Foster: Thanks, Brad. A couple of things. To go back to the comments that were made just a couple of minutes ago here by the L&M fellows, they've got a pellet plant on their site and a hogger, and they're still not bringing the residuals into the mill. When I look at your last picture here with a group in front of that garbage pile…. Two questions. Are you grinding it in the bush? How can you make it viable?
B. Bennett: Well, as Alan said, they produce to what they call a DIN Plus standard, which is really the bag market, a highest-end standard. When you use forest residual, it is to a lower standard. So we're sort of targeting slightly different markets. I don't know exactly what their strategy is. They maybe grind those residuals up and utilize them in their power generation unit. I'm not exactly sure.
How can we make it work? Our pellets are to what they call an industrial standard, so it's a lower standard than what they produce to. We've invested certain equipment into our facility that they don’t have in their facility, to do that. Will they in the future? Potentially. You'd have to ask them.
Three years ago we didn't really know how to spell grinder, to be honest with you, and we've learned a lot. Some of the secrets that we've learned, and we're not alone in this, that we're going to use…. Originally, we were using 20, 25 percent. Now we believe that we can run a plant on 100 percent forest residuals, given the right equipment and the right situation.
I'm not really sure. You'd have to ask Alan and Dave.
E. Foster: That's fair. I didn't realize you made two different products, so that makes more sense.
B. Bennett: Yeah. They are slightly different products.
E. Foster: You are grinding in the bush, are you?
B. Bennett: Yes, we do.
E. Foster: You just take the chip wagons to the bush?
B. Bennett: Basically, like I said, our plant will run on about 50 percent forest residuals, and that's what we run it on, on a day-in, day-out basis. If you actually look within Prince George…. I mean, some of the bioenergy stuff is working. Within a four-hour cycle-time radius of Prince George there are no piles being burned, or if they are, it's usually because they're contaminated. There's usually too much dirt or rock in the piles. So we are utilizing it. It's actually starting to become competitive, where we're actually paying money for access to these piles now. I think what I've seen over the last three years is going from not using it to now paying money for it.
One of our issues is that I don't have any security on those piles. If somebody decided to do something different, I'm out. So we have no security on those piles other than levering the forest licence that we have to try and acquire that security.
D. Barnett: Thanks, Brad. If I read this correctly, you're looking at expanding your operations in the future?
B. Bennett: Absolutely. Yeah.
D. Barnett: Of course, as you know — it's one of the reasons we're here — we do have mid-term timber supply issue coming down the pipe in the not-too-distant future. How do you foresee the long-term future if the annual allowable cut comes down and there's nothing there for you? How did you build your business plan on the long-term, mid-term timber supply?
B. Bennett: Well, the way I see it is that there are two land bases. There's the existing land base, which is the traditional pine land base that we've had. What's happening as the stands deteriorate and the economics are declining is that those stands are starting to get pushed into a marginal category. What I've said is: "Keep them in the AAC." I see a business that's going to grow on that and potentially give me access to some of that material to backstop my facilities.
It's sort of a mix. As the sawmillers go into those stands and they harvest, those stands will go from 75 percent sawlog to 50 percent sawlog. What I'm saying is our business will grow to a point where we can start to carry some of the burden on those stands, where 50 percent of the material can go to us and 50 percent can go to them. It's really a conversion from a sawmilling sector to a biomass sector. I don't think the AACs necessarily have to go down, if we can keep the land base as large as we can.
What's happening is that it's declining. It's not that the pine's not there; it's that the economics around those stands are declining. There's a balance there. I think that if we can keep those stands in the timber-harvesting land base that may not be suitable for sawlogs in the future but are suitable for biomass, get this industry going, then we have….
Again, my vision is that it's about liberating the sawlogs so that they go to the sawmills and they stay running for a longer period of time. We've actually done some projections in looking way out to the point where there are no sawlogs, or there's 20 percent sawlogs in those stands. We believe we'll be at a point there where we can harvest those stands, bring them in as biomass and generate a profit. It's a conversion of the industry.
We can't replace the number of jobs, obviously, in our industry. I mean, we employ, roughly, about 40 directly, and then in the contracting world probably another 50 in our facility in Prince George — it consumes 800,000 cubic metres — compared to Atlin's 250 jobs. We can't do that.
D. Barnett: Could I just ask one more question? When you're talking about these stands, where you're talking about 20 percent sawlog, 50 percent sawlog, and the rest would be residue that you could utilize for bioenergy, would you see a special type of sale out there from the ministry for these particular stands?
B. Bennett: Yes. Obviously, there has to be something there that supports the investment that's being made. So I say yes. There has to be something out there to allow…. I mean, the discussion today was basically: take the overall pie, throw those stands in, and then split it between the two groups. One way or the other, we can't grow our business without security of supply. We won't grow our business.
I believe there are opportunities in the province — southern Interior, parts of the Cariboo — that are not being utilized today and other parts that are outside the mountain pine beetle area that could be utilized today given the right situation and investment portfolio of licences and infrastructure to make the thing go forward.
J. Rustad (Chair): We have got just a very short amount of time, and we have three more questions, so try to keep everything really short.
B. Routley: Definitely the province has to find a way to solve this problem. I'm interested in the redistribution that you've talked about but also the carrot-and-stick approach. Just sitting here, I was thinking that if there was 25 cents more a cubic metre that the licensee had to pay, or the person that had the volume of tenure…. If they were wasting material, and they had a waste assessment that was 25 cents more than what you're willing to pay, there would be a sudden interest in your business.
Would that be…? That's obviously just an "off the corner of my desk" idea, but surely there's got to be to some solution that the great minds we have in this province can come to, to find a way to utilize this resource, although I know we have spent time in the Legislature working on various kinds of licences.
Anyway, other than this redistribution — which, again, I'd need to hear more about — have you got some other ideas of how this could work? I just don't know how we can redistribute the land base, the pie — make the pie bigger for you — without incurring some costs to the Crown. How do we do that?
B. Bennett: Yeah, I think there are two things: monetary value — or penalties, obviously — and the other one is, as the AACs start to come down, access to AAC that you can trade back. If a mill is short of AAC, and you have AAC that you can say, "If you utilize that material and bring it to me, I can give you an AAC chip that you can use to go out and harvest some more," that's one alternative.
The other one is the financial part. I mean, we are paying the market price for a pile of biomass. Within four hours of Prince George, it's somewhere around $1.75 a cubic metre right now. We are starting to actually pay money, and there is starting to be a bit of competition for the fibre. In the overall scheme of things, it's not huge dollars, but it's starting to have an influence, where three years ago nobody would pay anything for it.
That part is starting to grow. There is starting to be a recognition of the value. Again, from our business, if we have to survive on spot market, if we can't get a long-term agreement on it, it makes it really tough for us to build any kind of business.
B. Stewart: Thanks, Brad. We appreciate the investment and the effort going into the biomass and bioenergy part of the forest industry.
One of the things that we have to be concerned about is the long-term viability of the forest. Now, the way that you're currently buying material, you're not necessarily participating in silviculture except by giving some funding back to the company that actually has cut that timber.
I'm wondering what you see as how you can participate in that. Of course, it's obviously to your long-term benefit that those trees are there — the right stands. How do you see that?
B. Bennett: Again, I think our vision is that we can get to a point within the next five years that we could go out and harvest a stand that was 100 percent biomass, and we could incur silviculture. We're actually doing it today. We have some trials that we're doing in the Prince George area, where there are stands that are considered non-sawlog stands. They're actually between 40 and 80 years old. Typically, a sawmiller will use stands that are older.
They're small-diameter material. We're going to log them. We're going to build the roads. We're going to reforest the stands. We're going to essentially rehabilitate those stands. I think our view is that we will be part of that solution. If it's a business relationship between a sawmill licensee and a biomass licensee, it's really about an exchange of dollars, and the amount of dollars that we're going to exchange is probably going to go up over time.
J. Rustad (Chair): We're just about out of time, but I want to ask two very quick questions. The first is on electricity rates. How sensitive is the pellet industry to the price of electricity in the province?
The second question, which has come up often, is this: security and access to fibre. We hear that from many small entries into the sawmill business — that they can't get access to fibre, because it's all locked up. My concern is that if we lock up all the fibre that has potential for bioeconomy, then we'll run into the same situation with new players in five or ten years' time, because all the biofibre is locked up and new entrants can't get an opportunity to access fibre.
So the first one is the electricity rates — how sensitive it is — and the second one is: how do you solve that fibre problem and have an open, competitive market?
B. Bennett: Yeah, I'll answer the second one. It's really a balance here. I mean, there's not one size that fits all in any of these things. As we said about it, in different parts of the province there is room for new entrants in the bioenergy field, and in other parts of the province there isn't. I don't know how you're going to answer that question. Obviously, it's….
The only comment I would make is: there is…. You know, these stands will only stand for so long. They are deteriorating. To go to a board and ask for an investment, you need ten to 15 years of, "I've got the wood, guaranteed," and as they deteriorate, that window shrinks. In a lot of these areas, I think we're right at the precipice now, where we're not going to be able to build new facilities because the window is too short and we're going to be looking at stands that are going to be lying on the ground at some point.
As far as electricity, absolutely. I mean, the cost of electricity and the cost of labour are about the same in running a wood pellet business, so it is quite significant. Next to wood, labour and power are about the same, so very sensitive to power costs. Our facility in Prince George uses somewhere around eight megawatts of power on an annualized basis, and most sawmills are using three to four. So it is very significant.
J. Rustad (Chair): Great. Thank you very much, Brad, for your presentation.
Our next presenter will be the Healthy Forests, Healthy Communities. Bill, over to you.
B. Bourgeois: My name is Bill Bourgeois. I have a PhD in forestry and 38 years' experience, mostly in the forest industry, promoting forest management and involvement in the core land use planning process. I'm a registered professional forester, a consultant and coordinator for the non-partisan, volunteer-supported initiative called Healthy Forests, Healthy Communities.
I'd like to thank the committee and the staff for providing the opportunity to share the views we have collected through the 20 dialogue sessions held last year, the 27 expert background briefs produced during the year and the more recent letters and opinion submissions that relate to the mandate of this committee.
I'd also like to recognize the government for establishing the public consultation process, even though I believe it has limitations, especially relative to the narrow terms of reference and short timeline for consultation and reporting on a very critical and long-term impact issue.
I will not reiterate the concerns over the options of harvesting and forest reserve — areas articulated in my letters to the ministers on April 8 and May 8. I assume you may have already had the opportunity to read them. If not, I am providing copies that I think were distributed just a few minutes ago.
I would also encourage you to review the nearly 40 other letters and opinions posted on the Healthy Forests, Healthy Communities website. Suffice it to say, as it did in the letters, that consideration of the option is unwise, shortsighted, and has a high potential of losing community diversification opportunities.
I'd like to focus my comments on the considerations outlined in the committee's terms of reference: maintaining high environmental standards and protection of critical habitat for species and key environmental values, optimal health for communities as an orderly transition to post-beetle cut levels and maintaining a competitive industry.
It is through the communities' response to these considerations that you can provide the leadership to B.C. communities and those concerned about the future forest that has not been seen in other areas around the world suffering from catastrophic events.
Communities told us last year that they want to have more influence in forest management decisions relative to their local and regional forests. They also said they want a more diversified economy coming from the forest. As it relates to the communities in the mountain pine beetle epidemic area, the concern over post-beetle was forefront in their comments.
As the mountain pine beetle epidemic progressed across the central Interior, the vulnerability of communities to the potential impacts was well known by 2005, as was the projected downfall in timber supply. Government encouraged communities to develop adaptation strategies through the creation of the beetle action coalitions and the Northern and Southern Development Trusts.
The governments of B.C. and Canada have collectively spent $1 billion on the mountain pine beetle issue to date. Previously, there was a commitment of another $1 billion. If realized, the epidemic would have cost us taxpayers $2 billion. To date, this further commitment of $200 million from B.C. and $800 million from Ottawa would be very useful in helping communities adapt to the conditions following the epidemic. I would encourage this committee to recommend that the B.C. Legislature both pressure government to live up to their commitment and insist that Ottawa fulfils theirs.
To date, it is my view that the funding for implementation of the BACs' adaptation strategies has been totally inadequate. This response was not unexpected. Politicians around the world and across Canada have long been known to focus on analyzing impacts, taking action on mitigation and forgetting about adaptation. This leaves the communities hung out to dry and scavenging for needed funds. We are doing just this in B.C. by only committing $1 million a year for three years to each BAC for implementing the adaptation strategies.
This is small in consideration of the several hundreds of millions of dollars over a 20-year period estimated by the BACs to implement the strategies. I would hope B.C. politicians can learn from the mistakes of others and rise above the low standards set to them. Unfortunately, I don't see any action that would suggest this is in the cards.
However, the Timber Supply Committee has the opportunity to take a leadership role in this regard. I would encourage you to recommend in your report that government embark on a ten-year strategy with a focus on priority actions to help communities adapt to the changing economic and social environment.
We need to build on the work of the BACs. If you have questions about their priorities, take time to talk with them and come to an agreement on the highest priorities. The first action should be to establish a community forest vision to guide decisions related to the local and regional forests.
Where communities, aboriginal and non-aboriginal, do not have a clear vision, government should encourage them to produce one, if they are to influence and guide forestry-related decisions. It should be expected that the strategies created by the BACs are consistent with these visions.
Building the consistency may require time. However, the committee could recommend that government take steps to assist in this critical process. Without the vision, decisions are commonly knee-jerk, driven by special interest groups and/or subject to the politics of the day, all of which are commonly not in the best interests of the forests or affected communities.
The decline in available timber supply has created a crisis and the need to utilize the forest to generate more sustainable jobs compared to those traditionally provided through the current forest-related industries. Moving towards this goal has been a common call for 40 years, with limited success compared to other jurisdictions in Canada and the U.S. If we are to move beyond the rhetoric and into action, it will require communities to investigate and encourage new businesses, and government to provide enabling support.
Healthy Forests, Healthy Communities is holding expert and community workshops now and through the fall, related to the priority issues identified last year. We have just completed two of the expert workshops, one of which was on June 26, where we asked experts in four forest management fields — solid wood products, forest management, outdoor recreation tourism and botanical forest products — to provide recommendations to decision-makers related to assisting communities with economic diversification opportunities.
The experts told us that the recommendations provided are, for the most part, not new. In some cases they were presented to government 30 years ago. Why have we not moved forward to any significant extent? It appears that the politicians of the day wanted a simple and quick solution, when achieving success takes time to work on a number of issues and encourage investors and entrepreneurs to create viable, sustainable, community-based businesses. Removing one of the assets to the non-timber forest industries — those forest reserve values — will make the job more difficult, and in some cases impossible.
Obviously, we're in the process of digesting and summarizing the information from the two expert workshops, but it will be available for community input in September. The communities will be asked to review the results and identify any concerns from their perspectives. The combined input will become part of the Healthy Forests, Healthy Communities report expected in January-February of 2013.
If the committee were to recommend and get legislator acceptance of retaining the values in forest reserves and taking action on enabling communities' innovative businesses to generate more economic diversification from the forest, this public consultation process will be a success. If it is just maintaining the existing mills for a short period, it will be a failure.
Again, I would like to thank you for the opportunity to share the views of the Healthy Forests, Healthy Communities initiative collected across B.C. last year. I encourage the committee to take a leadership role through focusing on a long-term approach to addressing the community sustainability issue. I'm available now for any questions that you might have.
J. Rustad (Chair): Thanks very much, Bill.
Questions from members?
D. Barnett: Thank you very much for your presentation. I know you were in Williams Lake. Unfortunately, I was in Victoria. I do have a couple of questions, though, if I may.
First of all, Healthy Forests, Healthy Communities is sponsored by whom? What organization is this?
B. Bourgeois: There is no specific organization. It is a grass-roots initiative. Last year we had over 150 volunteers in various forms from across the province, contributing to putting it on, holding it, reporting and so forth.
D. Barnett: Well, I commend you for doing this. It always takes funds, and if everybody is paying out of their pocket and going around to the communities, I commend you for this. I'm very pleased to see that you've taken the time and energy to read the BAC reports. I was very involved in it. Unfortunately, an awful lot of people don't read those reports. I think that, as you have said, they will build the future for our rural B.C. communities, so thank you for reading those reports. I look forward to your end report next spring.
B. Bourgeois: Thank you. Money is always an issue, so if you've got any, we can use it.
N. Macdonald (Deputy Chair): I just want to thank you again for the work that you've done and for the presentation and all of the participation on this issue over the years. I think it's obviously really important.
I'm interested in the beetle action committees as well. I mean, the challenge with good work that's done on the ground and ideas is to move them to fruition. What sort of sense of funding are we talking about? There has been investment. I think it's not insignificant investment, but obviously, moving forward, what sense of government participation in adaptation strategies are we talking about here?
B. Bourgeois: Well, it's hard to kind of just pick numbers out of the air for it, but it would seem to me, in looking at the strategies that were put forward and giving some consideration that we don't have as much money as we would like to have these days…. I think that if we had for all three now, combined, $40 million per year for ten years — and I would argue that half of that should come from Ottawa because of their previous commitment — that would start to identify and start moving things along on the high-priority items.
The BACs may have a different view on that, but I think that would be a significant contribution. But it has to be consistent over that ten-year period. You can't — you know, up and down like a yo-yo with this thing. That means that you're going to put the money in a place where, with all due respect, you can't mess with it.
B. Routley: I want to join in thanking you for all of the work that you've put in and going all over the province to hear from citizens as well as forest professionals in reviewing options and ideas for what we should be doing more of. That was long before this committee was thought of, that you were out doing that, so thank you for that work.
There are obviously a lot of interesting outcomes from your recommendations, but one of the things that comes clear is that it joins with what we're hearing: the need to go back to communities if there are any changes.
Would you view it as worthwhile to update land use plans within communities? Are there options for any timber supply to come out of that process, in your view? What other options do you have to look at actually increasing timber supply, which is kind of the mandate of this group? Other than the ones that are obviously confrontational, the ones that are outside of that box, like commercial thinning or fertilization, what other ideas might you have?
B. Bourgeois: I'm not so sure you're going to be able to increase the timber supply much. As others have mentioned, you can do a little bit here and a little bit there, but is it going to be significant enough to really be a major focus? My guess is that it's not, but then, people who are giving you the data might know something different than that.
Land use plans. We used to have implementation committees for all the land use plans. We don't anymore. They were dissolved or at least not funded by government, and so they became inactive. I think if we were to have those in place, at least you would have communities and everybody else — stakeholders and, hopefully, First Nations, because they weren't involved in the previous ones, generally — come back and be engaged in that. At least then you would get some ideas coming out of how we could do things: "What are we confronted with?" etc.
That's the first thing that I would do. I would go back to those implementation committees. Land use planning doesn't go…. It's not an event: "I've done it, and now I don't have to worry about it anymore." There are some people who believe that that's the case. It's an ongoing process, not unlike what Ken Zielke was talking about from strategic level planning.
The other thing that I would caution is if you choose to go that route, you be careful on the terminology and the terms of reference. If it is viewed as we are opening up the land use plans, you are going to be in a whole lot of trouble.
I happened to have, previously…. As an example, I had a client who asked me to do an assessment on cumulative impacts up in the northeast. My job, as two of us were doing the job…. One of those was to go and talk to the First Nations. That was five, six years ago now. I went and talked to those First Nations, and whether I was talking to a chief, a land administrator, a member of the community, whatever, I asked them about their LRMPs. They said: "We don't like them." I said: "So what do we do? Do we throw them out, start again?" They said: "Absolutely not, but we want our interests incorporated into those land use plans."
A lot of First Nations have land use plans now. It's not going to be easy to blend those together, because you're going to have to do that.
Anyway, that's what I would do, as far as the land use plans. You're going to have to it anyway. Some way, whether it is in an organized way or in an ad hoc way, you're going to update those land use plans, so do it. Organize it.
J. Rustad (Chair): Thank you. I have myself next on the list.
From your forestry background you've suggested $40 million a year for ten years to fund the BACs and the outcomes of the BACs. From the background information that was provided to us from the Ministry of Forests, an investment of about $11 million or $12 million a year in fertilization, in terms of intensive silviculture options, would yield more than 670,000 cubic metres per year.
If we were take the $40 million and put that through, you'd be looking at well over two million cubic metres a year in potential gains through intensive silviculture, which is a significant portion. That's a 20 percent reduction in the potential impact in that alone.
Would you recommend the investment you're suggesting into silviculture, or would you recommend that we take that drop in reduction of AAC and invest it in potential diversification?
B. Bourgeois: The latter, being that I would invest it in the adaptation for communities. My background is in forest soils — granted, I have not done any of that for a lot of time — in forest fertilization.
I don't dispute what the ministry has said as far as the increases. We know that when you fertilize, you have to keep doing that, or it has to be at a certain age of the stand in order to reap the benefits of that. I guess I don't trust the continuation that's necessary in order to fully realize that benefit.
The research has been done, and I'm not disputing the ministry research. They've done great work in that regard. But keep in mind that those are only in certain stands that you get responses to, not across the board. Those stands, those types are not everywhere.
I will share with you an experience that Weyerhaeuser had in the northwest. Granted their soils are more productive, but in the '60s they were in the business of producing wood. They didn't care about deer or anything else at that time. They put a lot of money into research. When they did that, they said: "Here are things that get you your best bang for your buck in forests."
The first thing you do is you make sure that you put trees in the ground as quickly as possible, preferably improved-seed trees. You get full site occupancy. In other words, every growing site has a tree in it.
The next thing you do is you control the vegetation, so the competition. When it came to fertilization, they showed a line on the graph. We said: "So why is that line…? How much did you get from fertilization?" The answer was: "We had to have it on the graph, but the productivity is less than the thickness of the line."
Whether that applies to us in the Cariboo or not, I don't know, but it is another example. So if you're committed to it and if you know where that is and if it's going to benefit certain areas, absolutely. Go for it, but not at the expense of the community's adaptation.
J. Rustad (Chair): It's interesting. Fertilization in sites in Sweden that are similar growing sites to our interior of B.C., the impacted area…. Fertilization was the answer to how they managed to overcome much of the downfall that they had from overharvesting.
I have one other quick question for you as well, which is based on your background in land management. Do you prefer a management model of a volume base that we currently have, or do you prefer more of an area-based type of management system?
B. Bourgeois: I chuckle because you obviously have raised this with a number of people today.
I'm in the camp of an area-based management. I think that's the proper way to go, instead of volume-based tenures. But there are problems with it, as you've already heard today — about how you would move from where you are to area-based management.
It clearly identifies an area from which a company or a licensee is responsible for managing. Depending upon the nature of the contract that you enter into, you can encourage them to do other kinds of higher-level forest management. Don't get the mind that just because it's an area-based tenure, forest management will be intensive or that it will be, necessarily, at a higher level, unless that contract makes it so.
Area-based management is the right way to go, in my mind, clearly.
J. Rustad (Chair): Thank you very much, Bill, for your presentation today.
Our next presenter today is the B.C. Community Forest Association.
Kevin and Marc, over to you.
K. Davie: Thank you for seeing us today and for the increase in time. Marc has come down from McBride today. He's my right-hand man. That's why he's on the right.
My name is Kevin Davie. I'm the president of the Community Forest Association. Marc von der Gonna, RPF, is the vice-president of our association as well.
You have the notes here. I'm going to move around a little bit and try to leave more time for questions.
We want to thank you, certainly, for being involved in this process, as well as all the people that have presented before us. I've read most of the Hansard notes — all the effort that went into these things. There's a lot of information there and your task of making those decisions on what are obviously far-reaching effects on the province.
I've seen a lot of written technical data. I've seen a lot of good ideas. I think everybody is trying to work through this process.
I'd like to thank Bill for mentioning communities, because community forests are from the communities. On that note, communities are going to be the most majorly impacted people in this decision-making process.
You know, as Marc brought to my mind here, we have a million and a half cubic metres, but it's scattered all over the province. Some people have more than two million cubic metres, and it's in one TSA. So our members are far-reaching, and they come from very small 2,000-metre cuts to 150,000-metre cuts. So we span quite a variety of corporate structures, I guess you could say.
One thing with my travelling around with the Bridges project last year was that the impact of the beetle on communities could be devastating and probably will be to most communities.
For example, if you look at the effect that the Coquihalla Highway had on the Fraser Canyon, the Fraser Canyon is basically dead. You look at Spences Bridge, and you look at Boston Bar — the decay there. Yale — they have community garage sales right on the highway to entice people in, but there's nowhere to stay and nowhere to eat.
Do we want to see that for our communities? I don't think so. That just underlines the enormity of the decision you people have to make, and it's a pretty weighty decision because you're all from the communities, and you're going to be living those decisions too. I commend you for being here and being able to take this task on.
We've come a long way — community forestry — since 1999. There's history before that, but we've come from 2,000 cubic metres a year and people working on their kitchen tables — I can tell you where that place is — to 150,000 cubic metres, to people that are very skilled and people that are just off-the-cuff in our communities, working.
It's hard for us to represent everybody. For us, it's finding the balance in everything. While we can have a position on something, there are 51 community forests that may differ with us, and that's their prerogative because they're all over the province.
Our community forests include First Nations — the Klahoose band in Toba Inlet; Cheslatta, Likely; Xat'sull; Esk'etemc. So we cover most of the communities, and I think it's fair to say that we do have a voice for that.
Many of these community forests have diversified their economies by supporting value-added industry and increasing on value-added as a goal in the community to make them more self-reliant.
I think that one of the previous gentlemen spoke and said that large companies hire a lot of people in the communities. But there's a diversity of these companies and sources of timber, and that's what we speak to as well.
Seventy-five percent of our cut does go to large corporations, large mills. They're just as important in the community as what we are. They provide more jobs, of course, and a large tax base. But when the cut's gone, when there's nothing left, perhaps then we'll still be there. I think there has to be a lot of resilience in our communities and support for our communities to still be there, because one day somebody will be back.
We're a volunteer organization. All of us are volunteers, except for two paid staff, but it's a great day to be in Vancouver.
What do we bring to the community? We do some very rudimentary surveys of our community forests. Of course, some respond and some don't. But in 2011 a community contract spent just under a million dollars. This was only with 12 community forests reporting. Again, some were able to log, and some were not.
The average percentage of employment to local employers in each community is around 90 percent. The money stays in the community. The average percentage of contracts to First Nations is 18 percent. So First Nations are a significant portion of our cut.
We found in 2011 that our donations to the shareholders, whether it's share equity or donations to the community, were about $1.1 million, and in the last five years, out of 17 communities, a total of $4 million. So there are significant dollars to our communities. They may not be large, but for us, it makes a difference.
We also supply a much-needed service in educating our communities about forestry, building trails, the environment. We work with schools. We work with local community groups and sometimes spend a lot of time trying to convince local governments of the benefits of forests.
Again, large corporations and large sawmills have their place. In Canada we're very competitive in that market. Community forests sell about 75 percent of our cut to these mills.
According to your information that I've read about this committee, the effective falldown is going to be the equivalent of eight sawmills. So somewhere along the line, unless you can pull a rabbit out of a hat, there are going to be sawmills that may suffer. Some will be indefinite, and some will be permanent.
There's going to be a scramble to secure volume. Right now there are a lot of mills that are going out and trying to secure five-year contracts with community forests. That's great for those community forests, because it means they've got five years of income coming in that they've got some certainty with.
There's also a need to support local jobs in our communities. In a lot of our communities we're losing our youth. The average logger is getting to be 55 years old with grey hair — some that are here. I'm from Surrey, so that's why I'm grey.
What about community forests? We've had lots of tables. We've had the round table, and the round table said that we should expand the community forest tenure program. The forest sector strategy that was announced this spring: new community forest agreement opportunities will be created in suitable areas.
Clearly, the province has recognized there's some value to the community forest program. Although we can't quantify it, because that takes a lot of money to do, we can generally come up with support, with our mayors and our local regional districts.
We're just going to address three recommendations that we have. The first recommendation is to obviously increase the number of community forest agreements and expand the program. There are 47 operating community forest agreements. There are another 11 in the application process. There are at least eight waiting for an invitation, and there's probably an ungodly amount of communities that would like one.
We estimate that…. I believe we figured we'd need another two million cubic metres. So there's an appetite for more community forestry. How that works, how you can get that in a climate where everybody wants a piece of the pie…. Just sitting in this room today, there's a lot of demand for a very finite and shrinking volume.
One of our other recommendations, No. 2, is to update forest inventories with better information. Using TEM or VRI information, at least on the coast, I've seen increases in cut of up to 20 percent. Most of the inventory before that was using old data from TRIM maps going back to the early '90s.
Brand-new inventories. It's a big investment, but the potential increase in volume is bigger too. We think that's a good mitigation strategy.
We'd like to do more of that. LBI is a good avenue to provide funds for that; however, LBI has to be told to allow those funds to be used. That's going to be one of our main requests — to get more funding from LBI and expand the program so that we can do inventories in our communities.
The biggest…. Probably one of the other things that helps us is encouraging innovation and investing in value-added manufacturing initiatives. I came here with a bunch of wooden knives and forks. Apparently, McNaughton scooped me. He got you guys spoons — okay? He was getting you to dessert; I brought the knife and fork to cut up the pie. I don't know how you're going to cut up the pie.
That's a great example. That knife and fork per cubic metre is worth more than ten times the price of a cubic metre of 2-by-4. We have lots of successful stories like that. There are people in the Crescent Spur area and Clearwater cutting birch flitches, and they're selling that for upwards of ten times the price per cubic metre of lumber.
But they're hidden out everywhere. We think there's a bigger market out there. Most of us are just working in our communities and working off our kitchen table. We don't have time to do a lot of this marketing. The province has done an excellent job in marketing the high technology of our wood. Look at the Olympic oval — a huge success. It's a showcase of what we can do.
But we've got to look a little bit closer to the forest and a little bit further into our communities about what else we can do. What is going to get us five to ten jobs in our communities and is going to provide more economic diversity? It's going to cause the logger to be able to sell his log inside the community, and it's also going to provide wages and benefits to young people that otherwise will end up in the tar sands — oil sands, I mean.
When I look at my example, living on the Sunshine Coast…. My boys — guess where they are. They're in the oil sands because they have jobs that are 52 weeks a year and they're good-paying jobs. They would not be able to buy a house on the Sunshine Coast, let alone Vancouver.
Our association has been moving forward. We did our Bridges program last year. Out of that came WoodSource B.C. Thanks to the Ministry of Forests, Lands and Natural Resource Operations, we're going to be incorporating Fibre Connections into that program — into the WoodSource B.C. That will certainly assist in helping market the products and, hopefully, selling logs.
We also have not only small people on it, but we have people across Canada starting to get on it and large corporations, as well, looking for wood. There are lots of success stories around the province with people in small communities doing something that's going to hire a few people. We need more of that going on. We've often talked about that we need to have a culture of wood in our communities, as well, so we actually buy some of our wood instead of buying it from…. Can I say Wal-Mart? With Chinese wood.
In conclusion, you're considering ways to address the pine beetle epidemic. You have to take into account the high environmental standards that our province is proud of and showcased to the world, and you have to consider the health of the communities. We don't need more Yales and Spences Bridges.
One of the outcomes of the Working Round Table on Forestry and the new forest sector strategy is for more community forests. Let's just go there. Senior bureaucrats — no offence — have to be directed to allocate the remaining community forests backlog volume and find other ways to expand the volume as well.
We have been working with the province, with the joint working group in finding solutions for this, and it's pretty tough. Bureaucrats can only go as far as they're told they can go, and they have to be given more.
By investing in value-added, we're going to be providing more certainty for our communities, we're going to be providing more jobs, we're going to diversify the economy, and hopefully, that's based on a larger volume.
Again, we've added just a list of all the community forests on the back here — those that are operating — and invitations and intentions. There are a lot more that would like to get an invitation to apply.
We think it's the answer. We would like to have more volume, so we hope that your deliberations are successful, and good luck to you.
E. Foster: Thank you very much. I've got a couple of questions, but just before I start that, if you look on that sheet, I was the mayor of Lumby before I was here. I initiated the community forest application there. Not quite there yet, but they're getting there.
On page 2. I'm working the math here, but it's not working out for me. The paragraph starts out: "In addition, we also found the direct community benefits." When you get down into: "$1.1 million were the donations to shareholders in communities." Is that over all of the operating?
K. Davie: No, that's just on 12 of them. That's not on all of them.
E. Foster: Okay. Then if we expand that over the 55, we're between $12 million and $15 million a year. Is that…?
K. Davie: I think that's fair to say.
E. Foster: Okay. So we're doing about a million metres, so between $12 and $15 profit to the shareholders.
M. von der Gonna: If you look at that, too, a lot of that is used to leverage other funds because in a small community…. Where I'm from, McBride, they don't have the tax base to contribute $300,000 just to get provincial funding or federal funding for a larger project. So you can take that dollar value and multiply it by whatever stack you want.
E. Foster: If they're netting out $12 a metre, that's a pretty good return.
K. Davie: You can pretty much figure that…. In my calculations on the coast they're running about $40 a cubic metre, is the benefit to the community. That's in logging contracts, engineering and all that other stuff. So that's the direct money that goes straight into the community.
E. Foster: The actual chunk of money that goes into the tax roll, at $12, is a pretty decent return.
K. Davie: Absolutely. Yes.
B. Routley: In my previous life, when I represented forest workers, I also sat on the Lake Cowichan Community Forest board. I'm a big supporter of community forests because I happen to know that the statistics were very good for the utilization, within the community, of the wood from the community forests.
Ideally we would…. I think it does come up in various round tables and in various conversations that obviously community forests are a great way to go in terms of supporting our communities.
I guess my question is: how much of your fibre supply is ongoing and how much of it is temporary licences? You've got it pretty well laid out here, but I'm not…. Does it show what percentage is temporary and what percentage is ongoing?
M. von der Gonna: In the tables in the back. Those are all community forest agreements. They're based on replaceable volume, and because we're area-based, as long as nothing catastrophic happens to that area, the AAC should be continuous through time, in perpetuity.
Now, when we did the recent survey, some are impacted by the beetle; some are in an uplift situation. They see their AAC going down, roughly a third. Another third look at it and say: "Well, we might find ways to increase that AAC." Another third are projecting that it'll stay the same. But it's all long-term volume.
K. Davie: I think, Bill, that some communities have uplifts. Some communities also have NRFLs. So it depends on the tenacity and how the community wants to run the community forest. For instance, Mission and Revelstoke: their TFLs are not community forests, but they're part of our organization. So we have quite a range of people that are there. But they're all area-based tenures.
D. Barnett: I, like my colleague over here, did everything for 100 Mile except get to sign on the dotted line, because I left before we did that. But it took ten years to get to there, so I'm really pleased we're there.
I go back to your Bridges project. I just want to mention that I think you've done a great job in partnership with the beetle coalitions and, of course, Community Futures. I think all of you working together and what you've done with WoodSource, the Bridges project and all the projects that you've been working together on have really helped move some of this specialty timber to places where they couldn't get it before. I'd just like to say thank you. Keep working with those groups and I know you'll all be successful.
N. Macdonald (Deputy Chair): Thank you for the presentation. There are areas, obviously, that traditional licensees have challenges operating in, in proximity to communities in particular. We have other problems that we need dealt with — in terms of interface fire issues; there are often watershed issues. In terms of looking at expansion — especially when, obviously, a number of groups want the same fibre basket…. How much work has been done by the Community Forest Association in looking at getting an area-based tenure that deals with a host of issues, not only providing funding to the community but also getting fibre options for more work and also interface fire issues and watershed issues?
M. von der Gonna: In terms of the community forests, the tenures are typically located around the community. So they are in the most highly constrained areas, with the community watersheds, the interface issues, water lines, all those recreation uses. You get out on the land base and you find people have pet cemeteries out there, things that aren't in the Forest Service inventory mapping. We end up dealing with the most highly constrained land base.
Your task is you're looking at saying: "Well, how do we give you guys more when we're dealing with less?" What we're saying is that we're providing more with less because we do use the full profile of the forest that's out there. A major licensee might be looking for a specific profile to fulfil their mill, but we're using it all. If you're giving area to us, we're finding ways to access that volume but we're still saying three-quarters of it is going to the major licensees. You're not really taking it away from their fibre supply. You're just creating an opportunity for us to find all those markets. That's because you're delinking the wood from the mills.
That's why we've entered into projects like WoodSource B.C. and Bridges, to try and find all those little markets out there. It is a win-win.
K. Davie: A lot of community forests deal with water. Harrop-Procter: I remember when they started, they would never log in their watershed, and they're logging there now.
The Sunshine Coast.
M. von der Gonna: Creston, with the brewery there.
K. Davie: Right. The brewery's still there. So yeah, we handle contentious things: viewscapes, trails, recreation. These things all work.
M. von der Gonna: You know, your previous speaker talked about the LRMP process and the fact that there isn't really an implementation committee any more. Because we're in the community and we're managing the area around the community, we've become the de facto LRMP implementation committee. We are having annual meetings or semi-annual meetings with the public and getting input. We have our own management plan for dealing with all those constraints. We've sort of helped take that on.
N. Macdonald (Deputy Chair): It just seems like an elegant answer to a whole bunch of problems. At different times MLA Rustad and I have talked about how you do the interface, for instance. It's a huge cost the government struggles to fund — and I think any government would struggle to fund — and yet the community forest has a flexibility that may allow that to be dealt with and generate the revenue through other ways — basically fund it through other activities and meet a number of needs.
K. Davie: The town of Logan Lake — they've been doing fire interface mitigation for ten years now. In fact, I think they're the leaders, at least in terms of the Community Forest Association. It's a huge basket of problems, and we've got them all.
M. von der Gonna: It depends what is important to your community. Where I come from, again, you know…. The Forest Service in 2003 was getting rid of their involvement in rec sites. There were important recreation sites around our community, so we took those on. We funded the management of them, and we've been maintaining them ever since — right?
It's just a matter of putting the money back into the community to where the committee wants that directed.
N. Macdonald (Deputy Chair): So even though it wasn't in the community forest, you had areas outside, like recreational trails and recreational sites?
M. von der Gonna: We had some outside and some within. We seek out other forms of funding. We've partnered with clubs, even maintaining Ancient Forest, which is halfway to Prince George — totally outside our area, but it's within the broader tourism region. We do whatever we can.
J. Rustad (Chair): Thank you very much. I've just got one quick question for you.
One of the communities that presented to us, one of the communities from my riding, had said that they would love to get a community forest but, of course, looking for a community forest you're looking for the right mix in terms of some age, in terms of different species mix, etc., to be able to give a balance and to be able to have something that's sustainable over a period of time.
In some of the areas…. We're dealing with areas that are killed by mountain pine beetle. I'm just wondering about low-volume stands — some of the challenging stands where there is more biofibre or, you know, a mix of biofibre and sawlog components — and whether or not you think there may be opportunities for a potential expansion of community forests into those types of stands or even creation of community forests in those stands.
Given the understanding that there may be a period of time when there wouldn't be harvesting, but there would be management opportunities so that 40 or 50 years down the road, obviously, the composition of that would look quite a bit different. And given that communities, for the most part, aren't going anywhere, along with First Nations, there may be an opportunity there.
I'm just wondering about your thoughts about what that would look like as an expansion to community forest areas or the creation of new community forest areas.
M. von der Gonna: Yeah. I mean, absolutely. I think it is…. You hit the nail on the head in that you're saying, you know, companies will come and go. What was a weed species 20 years ago might now build a whole industry on. The land base isn't going anywhere. Its ability to grow trees isn't going anywhere. It might not be the best hands of cards to be dealt right away, but long-term, absolutely. It's worth doing.
If it's low-volume stands, if it's not merchantable volume at this time, you know, the community will find a way to use that and market it. We've heard already that the technology is changing so rapidly in terms of bioenergy, biofuels that I think it's worth it.
K. Davie: I think even NSR areas are opportunities, especially if the communities can restock them and tend them. I guess there's one thing too, and that is that we're considering the price today. As less timber gets on the market, the price is going to go up. It's certainly just like Bill on the coast where we went from cable to ground-based systems, and the price of logs went down because the cost of the logs went down.
Now we're getting back up on the hillsides, and we're adding $20, $25 a cubic metre on for road and high-lead costs. People are going to want that volume, so the price of logs has got to go up. It has to go up.
What is garbage today is gold tomorrow.
J. Rustad (Chair): Let's hope.
Thank you very much for your presentation and taking some time with us today.
Our next presenter is Ray Travers.
R. Travers: Good afternoon. It's my pleasure to be with you here today. I'm very interested in the work of the select standing committee on mid-term timber supply.
Just so you know a little bit about my background, I grew up in the place where Marc von der Gonna comes from, a little place called McBride, and I'm now here. I've seen a lot of changes and so on. I went into forestry, and majored in silviculture and forest management.
Where I sit today as a forester and as I listen to the proceedings here, there is obviously a lot of really good work going on, a lot of hard thinking and so on, but I am of the view today that we have to change direction, that we just simply cannot accept the management model that probably made sense in the '50s when this whole system was set up. I think it's run its course.
I look at the sawmill production on the coast. It's now 10 percent of the total province. It used to be over 50 percent. I would say that once the old-growth timber supply is depleted in the Interior, that's the kind of future that could happen there. That's another reason why I'm pleased that we're talking about these really important issues.
You have my handout. I just try to get a little bit philosophical here at the beginning. We're not facing anything new. All human societies, all nations and so on, have faced great issues before, and our country has as well, through two world wars and a worldwide economic depression, which certainly had a huge impact on our parents' generation and, I would dare say, had a huge impact on setting up the management system we have today.
Let's put our heads in that space. They had gone through not one but two world wars and a worldwide economic depression within 31 years — okay? And they weren't sure what was going to happen post–World War II. They weren't sure. They had no crystal ball any better than what we have today. So they developed the system as we've inherited it. The whole idea, if you look at the royal commission hearings from those days, was community stability, steady employment and so on, regulation of the cut and all of those important things.
We now have 50 or 60 years of experience to look back and say: "Well, how well did that work?" I would argue that we should be better off today. If that was really a good system that was set up, we should be better off today than what it was when it got established. And are we? Well, I think the facts speak for themselves.
Ultimately, I have a lot to say here today, and I only have a few moments, and so I will stay close to my notes and try to leave the ten minutes for questions at the end.
I think that in terms of setting forestry on a new course and setting a new direction, we have to be globally oriented. We have to be oriented in wealth. We have to be oriented in value. When I define "wealth," I define that as our capacity to do things. It's the condition of our forests. It's our skills; it's our technology. It's our government structures. That's our real wealth. That's our ability to do things. So if we can invest in those things, we will be in the right direction.
General George Patton had a nice little quote. He said: "Success is how high you bounce after you hit the bottom." So 2009 was probably the bottom, at least in our recent memory. It's all about developing capacity. I have a couple of definitions for "resilience" here, but I won't spend time on that now.
When I put my silvicultural hat on and when I think about lodgepole pine forests, I see highly changing forests. The ecologists call them natural disturbance type 3. What they meant by that is that they have frequent stand-initiating events — lots of fire, lots of bugs, probably a fair amount of wind. That's the nature of those kinds of forests. They turn over quickly. Now, you tell my city colleagues that that all happens in a hundred years. A hundred years? People have a hard time getting it. But relative to other forests, that's fast.
What we have seen in terms of the recent outbreak is, quite frankly, probably worse than what was ever experienced before. But Hec Richmond, an entomologist, said that there was a big mountain pine beetle outbreak here in B.C. in the 1890s, another big one in the 1930s, another big one in the 1980s. And it will happen again — okay? It's going to happen again. That's the nature of those forests.
That's why I brought to your attention this little definition of "sustainability," which I think helps us get beyond that. You'll see that here on my page 2 — where sustainability equals productivity, which is the existing way of thinking about this. But ecosystem maintenance — if we want to manage those highly changing forests, it's going to take more effort than what we would assume normal for other types of stands which don't change so quickly.
I also happen to be a member of the International Society of Arboriculture. If in urban situations we want short-lived trees, we actually put a levy on property to pay for the annual maintenance of those. That's the kind of additional obligation that's needed if we want to enjoy the benefits from these highly changing, usually short-lived species. I think this is a very strong definition which would help us get beyond some of our difficulties.
Then in the next two pages, again, in terms of, let's say, ecosystem health or forest health issues, we're not new. The Americans have had them for years. Now, they use a little different terminology. They don't talk about coast and interior. They talk about west side and east side. When they talk about the east side forest health ecosystem health assessment process, it's all there. There's a lot of really good information.
Where they seem to come down on all of this is that when we want to, let's say, enjoy benefits from these forests, there has to be an overlap between what we want and what's possible biologically. Then what we have to do is understand the kind of natural stresses there that are going to occur and then make sure that our management stress that we impose on them through the kinds of silviculture and so on that we do basically helps maintain the productivity of those forests.
I focus, in terms of my presentation today in looking at your terms of reference, on the whole idea of increasing the harvest of economically marginal timber. When I saw that, I assumed that was economically marginal today, when I read that. Now, we have a history of this. We've already done it.
I'm old enough to remember when the forests in the Chilcotin weren't even included in the allowable annual cut because they were considered to be unmerchantable. But the engineers understood that it was really easy logging. It was flat. They understood that although the trees were small, they were high grade. And they understood that if you had mills in Williams Lake that were designed for those small trees, a viable industry could be set up.
Where I'm leading with all of this is that what we assume today, in terms of what that economic margin is, can change.
I am very committed, as a forester, to the notion of growing high-quality wood. How should I put this? I don't get a lot of dialogue on that in B.C. You're with the wine industry, Ben. You've seen your industry going. I remember, when living in Kelowna, that the available wine was kind of a joke, really — Baby Duck, and all those kinds of things. Today you're a world-class industry. You can compete with the best.
I think that we have a parallel there that could give a lot of insight in terms of how we need to rethink how we place ourselves, position ourselves, in the global market and how we develop management systems so that we go for the very top end.
When I look at global forest products markets, what I see is that, yes, we're very good at commodity markets. Yes, that does a lot of good things for us. But there are high-end markets there that we get very small percentages of.
As an example, I asked a construction fellow in Victoria a year or two ago: "In the terms of an average house in Victoria, what is the value of wood that goes into that?" He said: "About $120,000." I said: "Well, how much of that is framing?" Most of what we produce here is commodity lumber — 2-by-4s, trusses, sheathing, and that kind of thing. He said: "Well, that would be about $20,000." The other $100,000…. If you're using wooden shingles, that would be part of it, and we've been moving out of that. But the siding, the wooden doors, the wooden windows, the panelling, the moulding, the cabinets — that's that other $100,000.
We get very, very little participation, by the way we're structured here in B.C., to contribute to that market. Actually, as I talked to the old-timers, they said that we used to produce what they called factory-grade lumber and millwork-type lumber but that we don't do that anymore. We have opted to go for a commodity industry.
That market, I would dare say, is one that I sure would like to know why we're not accessing more of it, because it's right here, available to us.
When we grow high-quality wood, the trees need to be straight. They have to be low taper. They need to be high density, and so on. From a silviculture point of view, and this is absolutely critical, we want the rings per inch to be more than seven rings per inch. Less than that, you start producing low-grade lumber. It warps. It twists. It shrinks.
That's what happens to coastal Douglas fir. I went into a furniture store in Victoria called European hardwoods. I said, "Do you have Douglas fir for sale?" "Oh no, we can't use it," for the reasons I just stated.
I'm just very interested in terms of…. You mentioned about fertilization in Sweden. Yes, they do fertilize, but it's in the north, where the trees are slow-growing. It works for them, providing they don't get less than seven rings per inch. Once they start doing that, then they're starting to produce the lower grades of lumber and pulp and all those kinds of things. So they thought that one through, in my opinion. They don't do the kinds of things that we do.
On my next page here I've got a figure of three trees. This comes from Les Jozsa. He's retired from Forintek. I'll spend a bit of time on this, because I think this is really, really critical.
They're talking about conifers here. For the sake of argument, they're on the same site and they're the same age. So we're not comparing apples and oranges.
If you look at the open-grown conifer, you'll see the green branches to the ground. That's like the big sequoia on the lawn of the Legislature. Take a good look at it the next time you're by. What do you see when you see that tree? It's a beautiful tree. It looks like an inverted ice cream cone. Why? Because the width of the ring depends on whether or not there's a green branch beside it — green branch, wide ring.
Crowd the trees, like you see along the Island Highway, and you'll see that the green crown is in the top third of the tree. And the quality of wood goes up a lot. It's not just using coastal log grades from, let's say, an H-grade log, which is a high-grade sawlog — 120 bucks a cubic metre. If you do it well enough, long enough, you start to get into the veneer grades of logs and the increments and values start to go up — $200, $300, $400 a cubic metre.
I'm not making those numbers up. They're available on the Forest Service revenue branch website for coastal log grades that's published every month. You can see those numbers.
What I'm arguing for here — and this is what the Swedes do — is start with high initial stocking because the types of wood qualities are dependent very much on how crowded those trees are early on. Then what happens, of course, as the stands age or grow, is that they crowd each other out and the weaker ones die.
The levels of mortality, naturally speaking, can be quite large. You can start with 4,000 trees per hectare at ten years of age, let's say. But by the time they get to 100, you can be down to less than a thousand.
What would success look like? I'll just quickly move into this, and maybe that'll be time to turn it over to some questions.
My ideal in this is Sweden. They have the identical commercial forest areas we do — 22 million hectares. They have eight million people. We don't have that many. They go from about the equivalent of Williams Lake up to Norman Wells. They are considerably flatter, generally speaking, than we are.
You'll see here…. This comes right out of a document that's called the Swedish Forestry Model. It's available on the Internet. It's right here — Swedish Forestry Model. That's where that came from.
You'll see that through time the total volume of timber — and it's spruce and pine; we're not talking totally different species — is going up and up and up. Now, our line is going down. There are a whole lot of reasons for that.
Then you'll see down here, in terms of the next figure, where their annual growth exceeds their annual cut. In other words, they have a growth depletion ratio of one or more. Our growth depletion ratio is less than one because we have a scheduled falldown. That's part of the plan. That's what we've decided to do in terms of scheduling our harvests.
This is the ideal. Now, could we get there in a few years? Probably not. Could we get there eventually? I'm absolutely confident that we could, if we made it a provincial priority.
Okay. Then, basically just to wrap up this part of it, where I'm leading on this. What I want to bring to your attention in terms of specifics…. I've given you a lot of general comments, but in Sweden, in the spruce and pine forests, they will log in total somewhere around…. Well, 72.7 million cubic metres was the average between 1999 and 2010. That's how much they average.
Of that, the thinning was 21.4 million cubic metres. In other words, over 20 million cubic metres comes from that source alone. I understand that this committee is looking for ten million. That's right. Ten, I've seen in the transcripts.
Well, potentially, that's what Sweden does. If they didn't have the thinning, instead of logging 72 million cubic metres, they would be down to 50 million cubic metres.
Now, to do that…. What it means is the type of on-the-ground management that you heard from the community forest people here. Ultimately, forestry is a craft. Ultimately, it requires hands-on, well-informed people making good day-to-day decisions on a whole lot of things in terms of the forest. In Sweden the average property size is about 93 hectares. That's much smaller than ourselves, of course, but they do have the hands-on management.
I'll just wrap up with this page here, comparing it for 2009, which was a tough year for all of us. Again, 22 million hectares is the comparable land base in both cases. In Sweden in 2009 they logged about 65 million cubic metres; we logged 48 million. The value of our production was $13 billion; with theirs, it was $29 billion — 2¼ times, almost. In terms of our forest industry jobs, it was about 46,000; theirs was 85,000. Then you get into log exports and imports, but they actually — let's see — imported a lot more than they exported. That's basically what this is saying.
In terms of my recommendations: grow high-quality wood. I think it would be a very important thing to have, let's say, a thorough public conversation on that and on what the potential benefits would be. What you get into are extended rotations. What you get into are frequent light thinnings. What you get into is high initial stocking. You get into a different management model, and I've provided you, in the outline here, an example of what the Swedes mean by that.
I am talking about building on the recommendations of the B.C. Auditor General's report. It said a number of things which I think were very helpful in terms of getting better objectives. What I read into the Auditor General's report is that we have to go beyond just talking about efficiency. We have to talk about effectiveness. He has told us we need to get goals. We have to incrementally challenge ourselves: are we meeting our goals that we've defined? As I read the Auditor General's report, he says we're not doing a very good job of that.
Ultimately, I think what all this will do is that it will help us create conditions for attracting investment. My view is that if you don't have a high-quality timber supply or enough quality in the timber supply you've got, the investors are not going to be interested. They're not going to be interested in low-grade wood that is defective or whatever. The whole challenge that we have, I think, from a timber point of view, is to ensure that as we deplete the quality in the forest, we're replacing that quality annually so that as the years go by, hopefully, we'll be better off than when we started, rather than worse off.
With that, I will conclude and invite any comments that you have that would be on your minds.
J. Rustad (Chair): Thank you. First question goes to Bill.
B. Routley: Thanks, Ray. I think I met you probably a quarter of a century ago.
R. Travers: Yeah, it has been about that long.
B. Routley: You were definitely inspiring then as well, so thank you for speaking up for the forests of British Columbia and, certainly, for the value versus the volume. In fact, it was you that kind of emphasized that to me in a very major way, and I realized that what you were saying was true: we were essentially liquidating our forests at rates that, while they may be sustainable for volume, in terms of value, what we're passing on to future communities does not have anywhere near the value that we once had.
That's true today, especially in coastal communities, and as you mentioned at the outset, the number of mills that have closed and more logs being exported seem to be an indication of what has happened in the loss of value. We've got, you know, communities that don't have the valuable forests that they once had and that were easy to convert into high-value products.
Anyway, I'm interested in what you say, in particular because of having been to Sweden. I've always kind of dreamed about having more of a Swedish-type model here in British Columbia, but it seems to have been the economics. And you've pointed out that their return, for almost the same level or a comparable level of products, is 2½ times that they get in value.
Do you think some of that is attributable to their practice of getting more value out of the forest? Or is it simply the economics of being closer to a large customer base?
R. Travers: Thank you, Bill. I think what has helped them do this is that when I read their literature, they talk about the wood supply chain. And when I hear them say that, they're thinking about the properties of wood that are in high demand in the marketplace, whether it's strength or appearance or whatever it is — all the way back to the forest. What I think they do well is that — how shall I put it? — they're organized internally so that they are willing to work toward those goals.
I think of a group in Ontario just in the last two or three months called the Bluewater Alliance. It's a group of woodworkers at the community level in southern Ontario. They said: "We finally woke up and realized that our competitors were in the marketplace, not with each other." Now they collaborate within Ontario so that they can better participate in this.
Another person who spoke very eloquently on this whole issue of working together more effectively was Michael Porter. Now, he's kind of the global guru on competition strategy. Basically, what he said was that we've got to develop clusters. We have to learn how to organize ourselves together. When I talk to people here within various organizations, they say: "We live in silos. We don't communicate with each other. We don't know what the others…."
As a matter of fact, quite often we make it difficult for each other to understand. That would be my sense of why the Swedes…. And I don't think they're the same kinds of products. I think they're much more into the high-end products. I was just told in the last few days by a couple Swedes visiting B.C. that they really go for the high-grade in pulp too. And actually, the pulp and paper is a very high percentage. It might even be the largest percentage of the value of their forest products.
Of course, here in B.C., just think of all the mills that we've lost in the last decade or so: Ocean Falls, Campbell River, Gold River, Tahsis, Woodfibre, Port Edward — and then a large number of other sawmills, which you would know better than I. I would say that a large part of the reason for that is that the world is passing us by. It's something that we just simply have to grab hold of, because we can do all that we want here in B.C., but unless we can be competitive players on the global scene, once the red ink shows up, that'll be the end of it, operation by operation.
At any rate, if we can go for quality and value and understand that in terms of the lodgepole pine forest they're going to require a higher level of management than the conventional forest, I think that we'll start to go in the right direction in terms of the issues that are facing this committee.
I'm an optimist. Ultimately, I believe that we can do it. We've shown before, as Canadians, that we…. You know, we won here just in Vancouver 14 gold medals in the Winter Olympics. In Calgary we won none, and in Montreal we won none. That didn't happen because we just sort of — what should I say? — went along with the crowd. I've talked to people in the sports field. They said that the real difference was coaching: that we went for the best — the best minds, the best advice — and then we committed ourselves to it. I think that there's a real model there for helping us get beyond just simply mastering the routines of the day, as important as that is. If we can set a new direction in the types of things….
I'll just wind up here. I'm on my last page here.
Last December I became aware of these long-range planning scenarios by the Port of Vancouver. It was just really interesting. Basically, what it says…. This is all maritime terminology, but it's the supply-demand matrix on the last page here. If we've got an existing economy, and we're not well adapted, they call that missing the boat. If the world is improving but we're not really changing in terms of our ability, they call that the rising tide. If we become defensive about our situation, they call that the local fortress. Then they say here that the real opportunity is what they call the great transformation. I think there's a model there for us — the Port of Vancouver.
As I look at the future, as affected by climate change, if the scientists are even close to what they're saying, we're in for some changes that we can't even imagine in terms of what that means. I think that the real challenge. All we can do in this generation, I think, is try and get the initial conditions right — try and make sure that whatever our legacy is for the future, we're putting investments where they're going to have the biggest opportunity for payoff and that the forests are going to be as healthy and resilient as our skills and knowledge will enable us to be. This is very consistent with my notion of the kind of new direction we've got to take.
J. Rustad (Chair): We have just a few more minutes left, and we've got two questions.
D. Barnett: Thank you for your presentation. By looking and listening to what you've said here, with the Swedish model, I guess, then, you would support area-based tenure?
R. Travers: Oh, absolutely, yeah. It all comes down to the relationship between the decision-maker and the forest. Really, all silviculture is, is making good decisions on what trees to leave and what to take. It's got to be at a scale where there's that connection with the land. When we do that, we've set up the context for the kinds of things to happen, which…. Well, I think the community forest people talked about that.
B. Stewart: Ray, thanks for the analogy about the wine industry.
B. Stewart: Well, no, but it's a really good example of when everybody kind of dismissed the whole prospect of ever doing something right. There were a few that had a bigger vision than that, and of course, they took it on.
When we talk about this value-add in terms of fibre supply from a government point of view, I just kind of wonder: how do you see us kind of like…? There was some inertia on the part of a small group of vision-based producers that created VQA and so on with the wine industry. But in the timber supply, how do we get the mills that are out there, and the people? I mean, a lot of these smaller individual producers of higher-grade materials used for musical instruments, etc…. How do you see us transitioning to get into that market?
R. Travers: Okay. Well, there are four things, and I'll be real quick. One is that we need a new information system. I would argue that the existing information doesn't tell us what we need to know — okay? We have the coastal log-grading system, which was good when it was set up, but it's way out of date.
The interior log-grading system is based on utilization, and it's my understanding that the industry actually rescales their log — a number of times I've been told this — because it doesn't give them the information. It's designed to collect stumpage — okay? That's what they…. We need a new information system.
Secondly, what I would argue for are regional log markets. We used to have them. You know, we used to have the Howe Sound log market. We used to have the log market at Vernon, which you would probably be familiar with. We don't have those anymore.
Very quickly. Every stand of trees has a percentage of high-grade, medium-grade and low-grade. Basically, what it is, is that the lower portion of the tree is the high-grade, and then way up in the branches that's the…. Then, of course, the wider the tree and the taller the tree, the more value, very generally speaking. So there's a real challenge there in terms of logistics.
In Sweden, even though it's a socialist country, and even though it's mostly private land, it's market-based. It's 100 percent market-based. The big companies own no land of their own. They get all the wood that they need through the market.
That's the next one. We need the small-scale tenure. Then I've already talked about growing the high quality.
If we could do those four things well, I think we would start to build the kind of infrastructure that we need. When I talk about log markets, it doesn't have to be a place; it just can be a set of transactions on the Internet if you have confidence in the nature of the deal that's being made.
J. Rustad (Chair): Thanks. One last question from me. I'm glad you've talked extensively about the Sweden model. I'm a big fan of that. Of course, in Sweden a big chunk of the land is privately owned, whether it be corporate, small corporation, individual. I don't know if that would be something that would be saleable in British Columbia in terms of how we manage our land base.
You've mentioned that you're supportive of area-based management. The question I have…. Of course, in Sweden, as you say, the mills don't necessarily own a whole lot of the fibre, or have access to a whole lot of fibre; they buy it on a market basis. Are you suggesting that we should be moving away from more of the security of tenure, which companies have used to be able to leverage and access capital, to something that is more mirroring the idea of an open market for the purchase of logs?
R. Travers: Well, I guess my view — maybe it's a belief — is that what every manufacturer needs is access to the logs they really want at competitive prices and in volumes that are, let's say, predictable. If we could get that, then I would think what would really drive that is having well-informed buyers with well-informed sellers coming together. The sellers, I think, would be best if they were landowners or land managers.
So yes, I think that would be a big help. I agree with you that the whole idea of privatizing the land would not be welcomed by many sectors in B.C., but I've been assured by people in the tenure branch of the Forest Service that we could get closer to that through the types of diversified tenure. We were already making considerable progress in that with community forests and First Nations licences and so on. I would welcome the acceleration of that to get closer to the many buyers, many sellers type of arrangement.
I think one of the benefits of that — and what I'm told — is that then you start setting up a history of transactions so that investors can look and see what's increasing, what's decreasing, what has opportunity, which doesn't have any opportunity anymore. We don't have that kind of institutional framework here, but I think that would be one of the payoffs of moving in the direction we're talking about.
J. Rustad (Chair): There are probably half a dozen other questions, but unfortunately we're out of time. Ray, thank you so much for taking your time, passing on your knowledge and presenting to our committee.
Our next presentation is from the Wilderness Tourism Association of B.C.
E. Loveless: Good afternoon — good evening, almost. My name is Evan Loveless, and I am with the Wilderness Tourism Association of British Columbia.
The Wilderness Tourism Association, WTA as it's known, represents the hundreds of small businesses that offer nature-based tourism activities throughout British Columbia that contribute significantly to B.C.'s economy. These businesses are small and localized and provide stability, diversification and job creation in their communities. The WTA has for decades been involved in discussions and planning initiatives relating to forestry and land use in British Columbia.
I would first like to acknowledge the creation of this committee in response to the critical forestry and land use issues that need to be addressed and your efforts to deal with the devastating effects of the pine beetle infestation on the forestry sector.
We'd also like to acknowledge the committee members that have been appointed to sit on this important committee. You collectively have the depth and breadth of experience required to find solutions to these issues and to put forward prudent recommendations. I personally have had the pleasure of working with some of you, and I know how much value you can bring to this committee.
Most of our concerns and comments and our submission in this presentation speak to the potential action related to harvesting of the areas currently constrained from timber harvest in order to support other resource values as identified in the committee discussion paper. However, we'll provide brief discussion on some of the other identified potential actions and our options. It's probably no surprise, but all our comments are with respect to tourism, which, we would suggest, is the other forest industry — major forest industry anyways — in British Columbia.
I apologize in advance. Public speaking is not my forte. Let's see if I can get through this.
It is critical for your committee to keep front of mind not just timber supply, but the full range of values, products and experiences which flow from or are attached to our provincial forests. In this context, we are concerned about the committee's terms of reference and specifically, the lack of mention or acknowledgement of other key socioeconomic values such as tourism and recreation values.
We would also suggest that making the assumption in the committee's terms of reference and discussion paper that mid-term timber supply needs to be increased fails to acknowledge a more holistic approach to forest management. With the current approach, sectors like tourism and recreation, non-timber forest products and other sectors may be impacted or other opportunities lost.
Tourism makes a significant contribution to our local communities and the overall provincial economy. Nature-based tourism alone, which is our sector, generates $1.6 billion for B.C. and is a major driver of B.C.'s $13 billion-plus tourism industry.
Many tourism businesses in British Columbia are directly dependent on the forest land base for their tourism product. Fishing lodges, guide-outfitters and back-country adventure lodges, to name a few, all depend on a healthy, natural and pristine environment and healthy, productive fish and wildlife habitats, wilderness landscapes and spectacular scenery.
Relatively few tourism operations are entirely untouched by forestry decisions, including timber supply management, in the province. Major ski resorts and all-season resorts, for example, require maintenance of viewscapes around the resorts. Hotels, restaurants and other tourism services, even in urban areas like Vancouver and Victoria, derive some portion of their income from visitors attracted by the natural beauty and attractions unique to British Columbia's forests.
Tourists come to British Columbia because of our wilderness and natural reputations, supported by our "Super, natural British Columbia" brand. Our natural endowments, such as healthy, intact forest landscapes, are major drawing cards that attract tourists to B.C. They're also the major reason why many British Columbians spend their vacation dollars at home, exploring their own province. Our highways and other travel corridors and recreation areas are an integral part of this experience.
The actual dollar value to the tourism industry of managing or protecting forests and landscapes is hard to quantify. There has been virtually no empirical research done in this regard, but it's certainly something that we should be looking at. We do know that it is a significant travel motivator for tourists coming to British Columbia, as opposed to other jurisdictions.
There are several issues and concerns raised by the tourism industry regarding the impact of forest development on their operations, including, but not limited to, quality of viewscapes; wildlife and fisheries values; recreation features and trails; changes in access; environmental practices and safety standards; seasonal operations; and the rate of planned development, harvest and reforestation.
We would also like to highlight our concern with a process that may consider changing land use objectives.
Forestry objectives and other land use decisions have been realized after years of deliberation, review, analysis and planning, with strong participation from volunteer stakeholders and the public. Now in the space of a few months this planning could be thrown aside for the minimal short-term gain of the forest industry but with long-term negative implications for biodiversity, wildlife and tourism.
We are certainly sympathetic to the losses incurred in Burns Lake and the need to develop economic opportunities and employment for that community and other communities that will be impacted by the pine beetle, but again, we need to carefully consider what other values may be impacted with these changes.
Speaking specifically about harvesting constrained areas, as we have identified, tourism in British Columbia is dependent on a healthy and well-managed forest land base with some protections. As such, we rely on forestry and other land use objectives — or constraints, as they're referred to in the forest industry — which serve to protect forest values other than timber, whether they be scenic quality, wildlife refuge or habitat protection.
Visual-quality objectives, for example, consistently come up in the top three issues and concerns raised by the broad tourism industry. Visually sensitive landscapes — also known as scenic areas, viewscapes or visual quality — are integral to B.C.'s tourism experience and are key to both present and future tourism opportunities. All tourism products rely on scenic quality to support B.C.'s global reputation as a provider of a super, natural tourism experience.
We know from the limited studies that have been done that tourists are less likely to return to B.C. — or to any area, really — when they experience significantly altered landscapes. Once visual quality drops below the tourist's acceptable level or expectation, the tourist no longer visits the area, and the tourism revenue is lost. Those tourists will go elsewhere for the experience they seek.
The mountain pine beetle epidemic hasn't really changed anything in this matter. Grey trees are better than logged cutblocks to the tourists. They see pine beetle–killed trees as part of a natural process which they accept quite readily. In fact, an MOF study of public perceptions of mountain pine beetle attack and resulting salvage operations found that people preferred grey trees or dead pine trees over harvesting. That was in a 2007 study done by the Ministry of Forests and Range.
Residents of mountain pine beetle–impacted communities are slightly more accepting of harvesting. In many cases, secondary understorey growth is already rapidly greening up the grey or dead trees in these areas.
The WTA has prepared what we call a fact sheet on visual-quality objectives. I am remiss. I did forget to bring it, but I will attach it in my final submission for your benefit.
Changing or removing constraints such as VQOs will have little effect on a region's timber supply. This is supported by the Ministry of Forests, Lands and Natural Resource Operations' own analysis. The forest industry doesn't really gain or lose jobs by changing these constraints. What may change is that the forest companies will be able to access a very short supply of timber in areas which are closer to mills and, therefore, cheaper to access. Sacrificing the long-term viability of tourism for the short-term forestry gains is neither reasonable nor desirable for long-term benefits to our communities and their overall economy.
The accelerated rate of forest development is already placing increased pressure on the tourism industry's ability to deliver quality tourism experiences. The changing or eliminating of existing constraints will further impact the tourism industry. Such developments will constrain tourism businesses' ability to operate. They will also make most businesses reluctant to expand, discouraging investment and any entry by new operators. Surely, these are not the types of actions we want in our effort to build upon the "Super, natural British Columbia" brand as a travel motivator, which is identified in our government's five-year tourism strategy, Gaining the Edge.
It should be noted that landscapes under VQOs have actually decreased across the province since 2004 by approximately 500,000 hectares, contrary to perceptions of many government and forest industry officials. This is an important point for us, because in the last two years we've heard many in local government and at the provincial level saying that constraints are on the rise. But we would argue that certainly in the case of VQOs, they have been decreasing over the last several years.
The forest industry is facing difficult times. We acknowledge that. The situation is expected to only get worse. But changing constraints to accommodate more logging is myopic and extremely shortsighted. Now with the dire predictions for the forest industry, what we really need to be doing for our local economies is not removing constraints and objectives but rather strengthening them, strengthening our tourism economy by increasing VQOs and associated land use objectives which support tourism.
The Ministry of Forests, Lands and Natural Resource Operations has done a good job of laying out the implications of other values on timber supply, but hasn't provided the same analysis in terms of what relaxing constraints would have on non-timber values. In order to address this gap, the tourism industry would expect a full cost-benefit analysis on all forest values before any possible changes to constraints are considered.
As noted, forestry and land use decisions were realized after years of deliberation, review, analysis and planning in provincial land use planning processes. So we need to be very cautious about how changes to these constraints and objectives and the land use plans that govern them will occur. We would expect the tourism industry to be active participants in any analysis, decisions or recommendations that are made and that would impact our sector.
In reference to marginally economic timber and accelerated timber availability, these are not areas which we have expertise in. However, I will just touch briefly on this. I'm not exactly sure which species you'd be looking at in terms of marginally economic timber, but again, we would just want you to be cautious about rushing to do anything in this regard unless there are some assessments of what other impacts may result from that — whether they'd be to critical habitat for ungulates or other wildlife, for example.
We assume that the proposed action or potential action around accelerating timber availability would mean either removing the green-up and adjacency provisions, which were originally in the forest practices code, or lowering the age at which a tree is considered mature and available for cutting — i.e., shortening the rotation period.
Again, in keeping with our comments pertaining to harvesting in constrained areas, we would be concerned about the impacts to tourism-related values if this were the case. For example, measures such as the attainment of green-up on a cutblock before logging can proceed in adjacent areas are critical for visual quality. Shortening the rotation periods may also have impacts on wildlife habitats.
In reference to area-based tenures, we have been asked to comment on the potential action of shifting to more area-based tenures and associated more intensive forest management. We assume that you're referring to moving away from volume-based tenures to area-based tenures in this aspect.
The tourism industry and the WTA specifically are supportive of this. It's actually something that we have supported for a long time. We have some conditions with it, though.
The first is that the tourism industry is also provided or accorded a secure working land base to operate. These would generally be the existing tourism land tenures and features that would be free from or have minimal timber harvesting. Tourism and recreation zones adjacent to communities could also be considered.
The impact or the threat of impact of timber harvesting on wilderness characteristics on which tourism depends has been severe in some locations around the province. There are numerous provincial examples that highlight tourism businesses being significantly impacted, in particular by mountain pine beetle–salvage logging operations and the uplift in AAC in response to the mountain pine beetle epidemic.
Tourism is even more prevalent now than when the regional land use plans were developed. As such, these plans and the government management of our lands do not adequately account for tourism-related land and resource issues and values. Our management approach is also based on the concept of multiple use, where the prime use of land is either forestry or mining extraction of undersurface resources.
Tourism and any other activity can take place on the land as long as these primary uses have their priority and aren't unduly interfered with. Consequently, tourism is subservient to forestry management decisions.
If tourism is to expand in rural British Columbia, which I think is something we all desire, land and resource security needs to increase in key areas of operation. A land use and/or tenure system where forestry has priority over its working land base in some areas and where tourism and recreation and/or wilderness have priority in other areas would be a win-win system for us.
The higher level of certainty over the land and resource availability would provide most tourism operators with the ability to continue the normal business practices of investment, marketing and expansion.
We hope to provide more context on this concept in the near future when we submit our final submission. We also expect other organizations to present on ideas about tourism and recreation zones adjacent to communities. We hope that these concepts will be considered as well.
Another condition for shifting to area-based tenures would be appropriate communication and notification regarding harvesting plans and the consideration of tourism interests and concerns.
Currently forest licensees are required under FRPA to notify all registered interests of land, including tourism operators tenured under the Land Act, about their forest stewardship plans. One of the problems with current volume-based forest stewardship plans is that because areas are so vast and there are so many ways to manage resources and to meet the objectives, the information is often too broad or too high-level to be meaningful to tourism operators and other stakeholders during consultation.
We would hope that forest stewardship plans for area-based tenures would allow for better planning and management and for better communication of important information. In addition, we would hope for improved notification and consideration of interests at the site-planning stages.
In addition to prior notification during the initial FSP planning processes, the tourism industry also requires and requests respectful communication regarding the details of proposed cutting and roadbuilding plans prior to site plans being developed and the appropriate permits applied for.
In summary, while forestry has been the traditional backbone of the rural economy in B.C., tourism more and more is becoming a promising new opportunity for growth. Both sectors use trees — the forest industry for processing into wood and paper products, and tourism for viewscapes, the harbouring of wildlife and the setting of recreational experiences. Tourism businesses rely on delivering to their guests the super, natural wilderness experience that they come to British Columbia for.
According to the recent B.C. tourism strategy endorsed by Premier Clark and Minister Pat Bell, the primary provincial marketing focus is to build upon the "Super, natural British Columbia" brand as a travelling motivator. This is our wish also. However, this is impossible if trails and other features are rendered unusable and viewscapes and travel corridors in surrounding tourism operations are deemed unsightly by heavy forestry development activities.
We also need to consider future tourism opportunities, opportunities we don't even know about yet. Tourism development and ongoing enhancement opportunities are very sensitive to social desires and economic and cultural forces. New activities can become popular in a short period of time and are often difficult to predict in the short term.
We urge the committee to consider tourism and recreation values in your recommendations. Rural British Columbians are resilient and enterprising people, and they will get through this temporary downfall crisis, but we all need a diverse, healthy forest to sustain our collective well-being. If collaborative and equitable planning between all forest-related sectors could be achieved, there is great potential for all industries to coexist and thrive. This would be good news for rural communities across B.C. intent on economic health and diversification.
J. Rustad (Chair): Evan, thank you. Your public speaking is just great. Thanks.
Questions from members.
N. Macdonald (Deputy Chair): Well, thank you very much for the presentation. Certainly, your members took the opportunity that was there when we went to communities to talk not only in general terms but also specifically about some of the concerns they had, which was great.
I just have a question about something that you spoke to towards the end, which is about the land use of tenure systems, of parts — I don't know of a region or the province — where forestry would be a priority and other places where other values, including tourism, would be a priority. Maybe you could speak to that in more specific terms — if we're talking provincewide or if we're talking within a region. Just maybe to build on that idea.
E. Loveless: Well, sure. Right now the way the system is set up is that forestry is reigning supreme on the land base, by legislation and by culture, and other uses like tourism are subservient to that. So in our tenure contract documents, it's very clear that you can go about your business and do what you want to, but you're subject to all these different acts, whether they be forestry or others.
We don't really have a secure land base to work in, so even though an operator can have an established tourism business and the things that they need to survive and be successful in tourism, whether they be scenic quality or specific features, they can be logged out, and that's the legal framework that we work with. So if we had a secure land base where recreation had a priority in a specific area, that would provide the certainty that we need to grow our businesses.
N. Macdonald (Deputy Chair): So the existing areas, with the various reserves for values that would include the visual quality and wildlife, doesn't address that?
E. Loveless: It does in some ways, certainly. I think you can appreciate that even within the VQO framework, there's preservation on the one hand and maximum modification on the other.
Even at the high end of preservation, there's still logging that occurs in those areas. It's not necessarily protection, either, in terms of a park, but something that's maybe in between, where tourism and recreation would have a priority. In some cases the concept has been put forward around communities specifically where there's a zone. It's a tourism and recreation zone around a community, and then forestry would be beyond that — that type of idea.
We would like something similar in the back country, where tourism operators are specifically on a specific basis, so if an operator has a lease for its one-square-kilometre parcel of land, there might be a buffer area around that which is set aside for tourism quality, and then beyond that would be forestry or other more resource extraction.
D. Barnett: Yes, we have had two or three presentations from wilderness tourism operators, and I live in the heart of a lot of them. Of course, one of the main issues — and I've done a lot of work with the wilderness tourism groups — is notification from logging tenures when they're coming into logging areas, and that's been quite a big issue.
I think in our area we've maybe got it resolved. We're getting closer and closer. The forest industry has come to the table there, and the tourism operators have come to the table. You know, sometimes you get a little frustrated because it takes two to tango, and so I think that the responsibility lies with both.
The other question I have, though, is…. It's very interesting. You say in your document here that tourism land tenures, much the same as if you had a forest land tenure, an area-based tenure — that the wilderness tourism industry would be interested in the same concept.
The same concept, of course, would bring dollars and cents to the table because the forest industry would have to take that responsibility, and there would be dollars and cents. So of course, the cost to the tourism industry would then go up.
How would you feel about additional costs in order to have these tenures? You would have the liability to take care of. You would have rental. You would have management because these areas still have to be managed by someone for the health of the forests and other things. How would you perceive the tourism industry coming to the table with that?
E. Loveless: Again, it's not a concept that we've fully fleshed out. There are going to be lots of questions, your comments being some of those things we have to consider. In some cases within our tenure documents there already is some responsibility — stewardship responsibility that we have over the land in terms of performance plans and those types of things.
Certainly, one of the ideas or concepts could be that maybe it's not area-based tenure where there's only tourism activity. Maybe it's forestry activity but tourism is allowed to take place as well, but the impact on those operators would be more minimal than it would be in other areas. Sorry. I can't answer your question specifically. It's something we have to consider and something we have to think about.
Regarding communication, you're quite right. We have worked very well with the 100 Mile district office — a coming together of all the parties. The communication there is well ahead of what it was a few years ago.
D. Barnett: It's 100 percent.
B. Stewart: I'd like to just ask: from a wilderness tourism operator point of view, what harvesting practices are acceptable?
E. Loveless: Well, there's the whole gamut, really. We're under no illusion that forestry is not going to take place in areas. But certainly in some areas I would suggest that logging could be improved — certainly in some key viewscape areas on certain corridors. A specific example I could draw for you is in the Burns Lake area, where most of the…. I use Burns Lake just because it's obviously been a topic of conversation.
Most of the existing viewscape objectives are on either the lake corridors, key fishing lake areas or on Highway 16 itself. I would suggest that in those areas we'd certainly want a much higher level of protection — not no logging specifically but certainly logging in a way where the natural viewshed is maintained.
We live with clearcuts. It's a reality in British Columbia. The tourism industry knows that, understands that and respects that, and there are tourists that understand that as well. But again, in those key areas which are important to tourism we would like to see logging practices done in a different way.
B. Stewart: The follow-on question is: how do we know what the important areas to tourism are? You talk about these tenures. Anybody that has an idea about a particular lodge or wilderness experience, etc…. I think that it is difficult, and it is mixed use. I'm not going to make that a question, but I'm going to just suggest one thing.
When we had a chance to visit up in Quesnel last week, we had a chance to tour some of the areas that were reforested and some of the innovative practices that were being used, especially around areas of caribou management, to minimize impacts, etc. Is anybody taking the initiative in your group to work with registered foresters or biologists to talk a little bit about the positive things we're doing?
E. Loveless: Absolutely. I would suggest that over the years we've done a lot of work with COFI and the professional foresters association and others to do exactly that. There have been small-scale pilot projects that have been done over the years with specific lodges and licensees.
By no means would I suggest that the working relationship is tense. I think it's actually very good. There are some problems, though, like there are with anything, I would say. We can always make improvements.
J. Rustad (Chair): Evan, thank you very much for your presentation.
Committee members, I'll do a call right now for anybody that would like to present on behalf of ForestEthics Solutions. We have a presenter that was registered but is not currently here — or possibly is.
V. Langer: I apologize. I made arrangements to present at 5:20, and then I got an e-mail saying I was on at 4:50. I apologize for being a little late.
J. Rustad (Chair): No problem. So it's over to you.
V. Langer: First of all, thanks very much for having me and for giving of your time to listen to presentations. I'm sure it's been a long day already, and I don't know that it's the best that I’m presenting at the very end of the day. You've probably heard everything that you possibly could need to know. But let me try to give you something new.
I'm going to start with a quote by Chris Spray, who works on water conservation issues out of England — about sustainability. He said that sustainability is a lot like teenage sex. Everybody claims they're doing it. Hardly anybody actually is, and those that are, are doing it very badly. That's just to set the context for my comments.
The question that the committee has before them is to take a look at or examine ways to address timber supply shortfall in the mid-term, which is actually now, given when the AAC uplifts happened a decade ago and some of the projections about when timber supply shortfalls would happen. So that's kind of the context.
I'm going to take primarily the proposal that's being discussed currently to open up wildlife habitat areas, reserves of various sorts, visual-quality areas, in order to supply timber for a short while longer to mills that are finding that they have a shortfall of wood.
I'll narrow it down primarily to that part of the proposal and, in my recommendations, some other issues that I think we should be addressing — sustainability being the key for organizations like ForestEthics, the context for all decisions around land use management. I think we should take a look at these proposals as to whether they are sustainable.
Unquestionably, it's in the province's interest to manage resources and the economy in a sustainable manner. There is plenty of marketing that's going on by the province currently out into the marketplace. B.C. market outreach network and others have put out several brochures saying this is the most sustainably managed province.
I think that if that's what the province is messaging to the world, that shouldn't be a lie. It should actually be based on practice. It's quite dangerous to start taking short-term economic decisions that have a long-term impact if those are certainly going to have an impact on what is communicated to the marketplace by others. The province may continue to communicate in one way, but if others see it differently….
I mean, there's been at least a decade now of fairly good communications for B.C. because the war in the woods was on a kind of low boil instead of the overflowing boil. That's been a benefit to a lot of companies in British Columbia. I work on the Great Bear rain forest campaign. We have specific joint communications or ways of communicating to the marketplace that we've agreed to with the companies. We're hoping that can kind of expand as British Columbia becomes more and more sustainable and learns from some of the practices that have been developed in places like the Great Bear rain forest.
I'm very worried what the impact will be if, in other regions of the province, we actually start taking the actual opposite and we don't learn from what we've been doing for the last decade in places like the Great Bear rain forest and some other regions, and take a step aside.
I just think that when you take a look at what the data shows on how the province is being currently managed…. We have a lot of data that shows that it isn't currently really sustainably managed. This would be indicators like the number of species at risk, the state of the inventories and the controversy around inventories. You can't manage sustainably if you don't have the right information.
The methodology, I would say, for calculating the long-run sustained yield is quite controversial in that it front-ends the problem on the assumption that things are going to get better in the long run. That's dangerous. It's an ex ante approach to making decisions. The controversies that currently exist around whether forestry is sustainable…. There's quite a bit of data that supports the "It's not sustainable" side of things.
It's a bit of a knife edge right now to continue to market British Columbia as having the strongest environmental laws around forestry — amongst the strongest in the world — if we're considering going down a pathway of opening up the conservation that we do have in order to provide a short-term timber supply bump, which would in the long run have a significant impact on ecosystems.
I just want to step back a moment. The current problem that we have in pine beetle areas is not actually a problem of running out of wood. It's actually a climate change problem that started more than 20 years ago, where we did not reduce emissions. The climate started heating up. Pine beetles were not kept in check through natural forces. Then we had a pine beetle infestation, which is a secondary problem. Then we had the timber supply uplifts almost a decade ago now.
The problems that we're currently facing with timber supply shortages were actually predicted. They were predicted at least twice — once around the environmental impacts of climate change, a second time around when the province actually wrote in their documents…. I've got a quote. On the second page here the province wrote:
"In the short term communities in the impacted areas may experience an economic benefit due to increased harvesting and forestry activity related to salvage. However, this increased activity will be temporary and will begin to decline by the end of the decade. Since economic development and diversification can take several years, work will be initiated now with communities, First Nations and the federal government to address future needs….
"The projected future decline in annual timber-harvest levels will result in a decline in forestry-based incomes in the area, expected to be 25 percent or more of the present income level in several communities."
This was written in 2005. What we are currently experiencing is exactly what was predicted. Over $50 million was allocated from the province and the federal government to help communities transition exactly for the moment that we are currently in.
It is a bit baffling to have a kind of panicked response to a timber supply shortfall that we've known is about to happen — in fact, that is not only expected but is a normal outcome of having created a timber supply uplift to deal with the pine beetle, with the expectation that we would ramp down. To go looking for timber that is outside of the normal timber-harvesting land base at this point, as if there's an unexpected shortfall, is really quite an unusual approach to take.
I remember when the province announced the uplifts. There were, in some cases, a threefold increase in the annual cuts. In some areas it was twofold. The province was very specific about saying that this would be temporary and that it was specific to literally exhausting the dead pine beetle wood and then going back to a long-run, sustained-yield approach.
Anything we do in terms of how to cope with a mid-term timber supply crunch should be done in a long-run, sustained-yield timber supply approach moderated by knowledge that we've gained over the last decade. That knowledge would be around everything from climate change to taking a look at other regions in Canada and how they've developed economically on smaller cuts, or equal cuts in some cases…. Well, actually, no province has an equal cut to British Columbia, but at least smaller cuts yielding more jobs per cubic metre. Take a look at the policies in some of the other regions which, rather than more timber supply, create more jobs per cubic metre cut, and see that as a more sustainable pathway to go down.
This diagram is very small. I thought I might be able to do a PowerPoint. Bear with me for a moment. If you look on page 3, there's a diagram called "Shifting the burden." I don't know how many of you have ever read or heard of Peter Senge's book called The Fifth Discipline. It's utilized in the Harvard Business School. It's kind of a basic business school text. One of the aspects that he delves into is system archetypes, in particular system problems that are archetypal.
There are about a dozen types of problems in this world. If you study systems analysis or systems thinking, one of the things that you get to know is how systems work and create problems so that when you're trying to find solutions, you're finding a solution to the type of problem that you're in and not creating fixes that fail. It's a very common thing to do.
A very simple example would be…. I'll give you two simple examples. One would be that you get into a shower in an old house. You turn on the water. It's too cold. You turn on a bunch more hot, but in that house it takes a long time for the hot water to go through the pipes. You've turned the hot up, and it's still not hot enough. You turn it up a little more, and all of a sudden it's just boiling. What you do is you overcompensate, and you turn it down too much, and then it's too cold. It's very hard to regulate, and the reason is that there's a delay.
This is a very common problem in systems archetypes. You actually have to account for the delay in how you fix the problem. For example, in the pine beetle you know there's going to be a certain length of time before the wood runs out at the rate of logging that you're doing. There's a delay. You actually fix the problem based on an understanding that there will be a delay for the problem to act itself out.
When you implement your fix, you don't overcompensate the fix that throws you into a reinforcing cycle of the problem — right? That's one of the types of problem archetypes. It's an overcompensation.
Another one would be Argentina back in the 1970s having terrible economic times. What did they do? They printed more money because they thought they just needed more money in the system. Of course, that created inflation. Logically, if you were just thinking, "Well, we just need to get more money into people's hands. Why don't we just print more money?" that seems logical, unless you know the economic system that you're in, and then it was really a very irrational thing to do. It sent them into a reinforcing inflationary cycle.
The type of problem that we have with the pine beetle…. Well, actually, the type of problem of a climate change–induced environmental issue causing a problem in the forest, then causing a problem with timber supply…. The problem is not timber supply. It's actually further back down the line. If you understand your problem, you know that fixing it doesn't happen in the timber supply section. You actually have to deal with the whole system that is creating the problem.
This situation, if you try and fix the problem simply by dealing with timber supply — that is, by increasing the cut for the short term in order to maintain capacity at mills that have invested based on uplifted AAC — what happens is that you will actually reinforce the problem. In whatever — a year and a half or three years or five years, however long it takes to log out these reserves — you would end up with the same problem again. The mills are still invested. They might have a 30-year capital investment. If it's only 25 years down the road, they still need to throw a bunch of timber through the mill. How do you deal with it at that point? You've exhausted the reserves, you might have exhausted the parks, and you're still in exactly the same problem.
It's not really a fix-it. It reinforces the problem that communities never actually adapt to (1) climate change (2) the notion of sustainability and long-run sustained yield and (3) having an economy that actually maximizes benefit to the communities and diversifies the communities — i.e., whether it's tourism or other types of jobs that might depend on good water, wildlife viewing, ecosystem services, carbon credits, any number of other things of that sort.
The kind of problem that we are currently in by considering opening up reserves to logging is called shifting the burden. It's a problem archetype. It's one of the 12. It's a reinforcing loop that is reinforced by dealing with the symptoms and can only actually be solved by dealing with the fundamentals of the problem.
I lay this out because I think if we're going to really deal with…. I think the communities deserve to have a real fundamental resolution to economic woes and uncertainties that they're facing. We have to put in place fundamental resolutions to a system problem. In this case it's both an ecosystem and an economic system. They are incredibly, always, interlinked systems.
The systems-thinking approach would be not to address the shortfall. It would actually be to address the economic factors that are driving shortfalls and the environmental factors that are driving shortfalls. It would be a much longer conversation if I got into how we might address climate change better so that we don't reinforce the problem to forests across the province. This epidemic is something that was predicted —not exactly but for the most part — over 20 years ago by climate scientists.
Do we have one minute left? I can't present everything. I realize that I wrote more than a ten-minute presentation. I'm going to have to pick and choose a little bit. Let me go, then, to….
We're wondering now, with pine beetle infestations in play, whether parks and reserves are currently serving the function that they were established to do, whether they're providing habitat, whether they have those kinds of ecosystem values that were originally established.
I think it's really worthwhile to take a really good solid look at whether reserves and protected areas are fully performing the function. I don't think that moving precipitously to assume that they're not performing those functions in order to resolve an economic crunch is a very rational way to go.
Establishing wildlife habitat areas and parks took, in many cases, ten to 20 years. I worked on some of these land use plans, and I know that blood, sweat and tears go into the kind of public participation, the science, the negotiations, coming up with consensus. I think it would be very disturbing to people who have participated across the province in land use plans to see a very cavalier dismissal of the kinds of decisions that took decades of considered approach to develop.
Further to that, almost none of these areas only contain one value. The ways in which wildlife habitat areas and parks are established in the province is to actually kind of layer multiple values in and choose areas where a number of values are being achieved at the same time. To assume that because a wildlife habitat area may not be as good a habitat now for, let's say, winter ungulate range, as it used to be, does not actually take into account that it might also be overlapping with First Nations sacred areas, that it might be a very important soil feature — a number of values that are often piled into one reserve. Visual-quality areas have similar kinds of factors in them.
Simply because an area has pine beetle in it does not mean that it no longer has ecological value. There are lots of green trees that are not pine within pine beetle areas. Soil has a function, particularly for carbon storage, that's at least equal to trees. In fact, about 50 percent of the carbon in forests is stored in the soil, not in the trees. As soon as you log an area, as soon as you create an opening to full effects of sun — for example, you don't get the same amount of shade — you immediately begin to degrade the carbon values.
In the case of the provincial carbon emissions data, in 2010 the memo…. We don't have to count forest emissions in the official provincial carbon data, the carbon inventory. If you look at the 2010 British Columbia carbon inventory memo — because they decided to count it in an addendum because it's so significant — it's almost equivalent to the entire official provincial carbon emissions from forestry. So if you were to count forestry-related emissions, double again what our current carbon emissions are in the province.
If you accelerate logging and expose soils, you accelerate the amount of emissions from forestry yet again. In the era of climate change, this is not actually meeting the provincial objectives. The province has an objective of reducing carbon emissions.
We have to meet multiple objectives at the same time every time we make decisions. There is no one, singular decision where we don't have to account for multiple values and multiple objectives. In this case, I think the province really has to take a look at what its objectives are in the big field of things, what our responsibilities are globally, to the rest of the province, as well as to communities, and take a look at resolutions and solutions that address multiple values.
I'm going to just go through the five key dangers I see to moving precipitously to fill timber supply shortfalls by seeking timber in the short term in reserved areas.
First is that it undermines an already inadequate level of conservation for species, for habitat and for maintenance of ecosystem services, particularly in an era of climate change. I know that we have somewhere between 12 and 15 percent. It might actually be a little bit more if you count some of the watersheds that are reserved — if you counted them. We may actually even be closer to 20 percent if you count some of them that are reserved from logging.
Why do I say that's not enough? Well, if you look at the best available science…. There have been reviews of the best available science, to date, that say the province needs to actually conserve. And I don't mean "protect." Conserving does not necessarily mean that you have to protect. It means that you have to manage better for conservation values — in some cases, maybe, protect as well.
We need somewhere around 50 percent of the province being managed specifically for ecosystem values, even if you are logging — managing on longer rotations, for example, in order to maintain soil and carbon functions, as well as habitat — okay? That's the best available science. We need to increase conservation, not decrease it.
Logging in reserved areas would reinforce a culture of expectation that supports an unsustainable activity for the provision of a short-term economic benefit, and we are in 2012. We're supposed to know better than to do that now. The implications on our economies, on our ecology and, in the long term, on our societies, are just too great.
Third, it undermines decades of scientific input that has gone into public processes that went into establishing these reserves.
Fourth, it negatively impacts existing businesses that rely on visual and recreational values of these areas and leaves communities with even less resources within which to diversify their economies after the timber supply from the reserves has been exhausted. There are already conflicts between a number of lodges and people who do the horseback riding tours in the Interior and timber companies, because their visual quality is actually impacting their ability to attract guests to their lodges.
What are we going to do after three years if there's even less of the visual quality and less of the wildlife habitat? It leaves people with less opportunity in three years. That's part of that reinforcing — or we sometimes call them vicious cycles. It also sets a very alarming precedent with respect to other provincial commitments and lasting legal protection for environmental values following land use planning processes. This is actually a very frightening proposal to many of us.
I am involved, and have been for a decade…. I have literally brought millions of dollars of investment, and I would say…. I'm not going to minimize the amount of investment. We raised $120 million, $60 million of it from private financiers and $30 million — thank you to the province for putting in $30 million — from the federal government to match the private dollars, because we had conservation under a land use plan in the Great Bear rain forest.
That kind of money is waiting out there again. I've been talking to investors exactly about these kinds of things. They are very interested, but if the province reneges on land use plans and conservation, there is no way that I can get an investor to come and book what we call conservation financing. You can't do that if they feel that the province isn't good to its word — okay? It's very important.
And for carbon credits, you have to be able to demonstrate that the province — when it preserves an area, if somebody is going to pay money for the carbon in that area — can deliver over time. We have to be able to demonstrate that the province is good on its word.
Just to wrap up, the recommendation from ForestEthics Solutions, my organization, is to significantly reduce the annual allowable cut, as originally stated a decade ago, to deal with the mid-term timber supply falldown that resulted from the AAC uplift of almost a decade ago.
We need to move quickly to help the impacted communities identify sustainable economic options and investment for economic development. We need to introduce policies that require a minimum number of jobs within the province per cubic metre cut, as the terms for accessing public forests. That's required in order to stimulate value-added processing and get — rather than the current less than one job per thousand cubic metres cut — the three to four jobs per thousand cubic metres cut.
Ontario gets three jobs per thousand cubic metres cut. Quebec gets four jobs per thousand cubic metres cut. British Columbia gets 0.9 jobs per thousand cubic metres cut. We could reduce the current amount of logging in the province by 50 percent and increase the number of jobs that we currently have if we simply met Ontario's jobs-per-cubic-metre-cut ratio.
Following upon this with the possibility of an economy that actually values its ecology, values the communities and gives the jobs to the people in the province out of the resources that we hold, we also need to identify key areas for greater conservation, for protection and for connectivity in order to maintain economic benefits and the options into the future.
These large areas for conservation should be based on multiple values — First Nations important areas; economic development; those areas that should be protected; those that should have longer-run rotations, better forest management; those that are going to be identified for selling as carbon credits, hopefully for more per tonne than you can get per cubic metre.
By the way, a cubic metre is almost equivalent to a tonne of carbon. So if you get a net of, let's say, $10 per cubic metre out of logging but you can sell a tonne of carbon for $12, then you should protect the forest instead. It's a better economic option. And you should figure that out before you log the option.
Finally, I think we need to become a global model for sustainable economic development and practices. It's something that we communicate to the world. We should live up to it.
We are a developed nation. If we cannot do it here…. How can we possibly expect Indonesia, Brazil, the Congo, Costa Rica or any other place in the world to do what we think is right for species like the orangutan, the Sumatran tiger — any number of species that are currently on the endangered-species list — if we can not do it ourselves?
We have species on the endangered list here in British Columbia because of habitat degradation. We should be addressing that seriously. Otherwise, it speaks to our culture. It speaks to a disrespectful culture, and it doesn't actually recognize that a healthy society is actually sustained by a healthy ecosystem and a healthy economy is sustained within a healthy society.
It's actually a nested approach. It's no longer that idea of…. The three-legged stool is very passé. That was the Brundtland Commission over 20 years ago. Sustainability thinking has evolved dramatically since then. The understanding, especially when you look at climate change, is that although there are delays in system effects, as I spoke of earlier, any society that tries to operate over the long term by degrading its ecology is fooling itself.
We are seeing that now. The chickens have come home to roost in terms of the pine beetle. It is an effect of ignoring all of the recommendations on reducing our carbon emissions and then acting surprised when in fact everything that was predicted came to pass. The chickens always come home to roost.
In this case the AAC was uplifted because it was recognized that there would be a shortfall eventually, that this could not be sustained. The chickens come home to roost again.
We have to deal with maintaining as healthy an ecosystem as we can in order that we maintain as healthy a community as we can in the area and not act desperately. Desperate decisions are inevitably bad decisions.
My final thing that I'm going to say — because I'm very worried, very concerned about this — is please, please, please do not open up any logging in parks and reserves. These areas are special. They still maintain values that are important. The science that went into them is still relevant today, and we should take a good, strong look at where we need to increase conservation, not decrease it, in the province.
Thanks so much for your time.
J. Rustad (Chair): Thank you, Valerie. Unfortunately, you've gone five minutes over the half-hour.
V. Langer: Yeah. I'm so sorry.
J. Rustad (Chair): There were a couple of questions from members, but I think, in fairness to all presenters…. I just want to thank you very much for your presentation and for providing the information for our committee.
V. Langer: All right. I should have given you my e-mail. I'm open to phone calls or e-mails. If you have any questions, please just send them to me, and I'll get to them.
J. Rustad (Chair): Thank you very much.
That was our last presenter for today. I'd like to thank all of the presenters for the information they provided to our committee.
Our next meeting will start tomorrow morning at 9:30, I believe.
With that, I move that the committee is adjourned.
The committee adjourned at 5:26 p.m.
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