Are big-five forest firms about to get a windfall?

Ancient Douglas fir on Juniper Ridge marked for death so Island Timberlands shareholders (including the BC government, Timberland's single largest investor), can realize more profit.
Photo: TJ Watt

Are big-five forest firms about to get a windfall?

From: The Province - Ben Parfitt, October 20, 2013

Shortly before the May election, the provincial government withdrew legislation that could have handed de facto control of publicly owned forestlands to a handful of forest companies.

The contentious sections of the bill were dropped amid a swelling chorus of questions about why such a gift would be bestowed without any debate about what it meant for our shared lands and resources.

It took little time, however, for the government to reverse direction again. During a campaign stop in Burns Lake, Premier Christy Clark said that if re-elected, her government would reintroduce the bill because that is what “the people” wanted.

Given that only weeks earlier the government had pulled the bill from the order papers in response to objections from First Nation leaders, environmental organizations, social-justice advocates and forest professionals, among others, the premier’s choice of words was, to say the least, odd.

What “people” did she refer to? Well, we may soon find out. Following her party’s re-election, the premier instructed Minister of Forests, Lands and Natural Resource Operations Steve Thomson to make the campaign pledge a reality.

A good bet is that the answer lies in understanding who would benefit most from such a change. In that regard, the shareholders of the five largest forest companies operating in the province fit the bill nicely.

Between them, Canadian Forest Products, West Fraser Timber, International Forest Products, Tolko Industries and Western Forest Products control the bulk of what is logged each year in British Columbia. They would control even more under the proposed legislative changes.

To understand what is at stake, it helps to know that outside of parks, virtually every standing tree in B.C. is spoken for, because the province has allocated the rights to log them under numerous licences issued to forest companies, logging contractors, woodlot owners, First Nations and communities.

The most important and valuable of those licences are Tree Farm Licences. Holders of TFLs have exclusive rights to log trees over defined areas of land. Currently, TFL holders log about 11.3 million cubic metres of trees per year (a cubic metre equals one telephone pole). Of that, the top five companies control 9.1 million cubic metres or 80 per cent. TFLs are as close as one gets to private control of public forestlands in B.C.

The next most important licences are forest licences. Forest licence holders have rights to log set numbers of trees over vast landmasses known as Timber Supply Areas or TSAs. But because many different companies may hold forest licences within the same TSA, forest licences have less value than TFLs, which give one company exclusive control over a specific area.

One other essential detail: the most valuable forest licences are “replaceable” or renewable. Far less valuable are non-replaceable forest licences, which are usually issued on a one-off basis to deal with perceived crises such as mountain pine beetle attacks or forest fires. Significantly, the overwhelming number of licences held by First Nations — who are typically on the outside looking in when it comes to benefiting from natural resources in our province — are non-replaceable.

As with TFLs, the top five forest companies hold a virtual monopoly on replaceable forest licences. Two out of every three trees allocated under such licences are theirs.

What the government now proposes in the name of “the people” is to allow the holders of replaceable forest licences to roll such holdings into far more secure TFLs. This could lead to near total control of public forestlands by an exclusive five-member club.

In 2012 and in the lead-up to the 2013 provincial election, that club made $556,020 in political contributions to the Liberal Party and $115,200 to the NDP — big dollars for some, but no more than modest investments for a powerful handful of companies who have a very clear vision of what lies ahead.

Entire TSAs — where trees are in increasingly short supply and where what little timber remains is oversubscribed — are on the cusp of being rolled into TFLs. And the Gang of Five is well positioned to divvy up the spoils.

Left on the sidelines would be First Nations, rural communities, small independent and value-added mill owners — people made poorer to give “the people” what they want.

Whether the government’s second attempt at this legislation will move forward remains to be seen. It has promised a public consultation process of sorts. The voices of opposition were heard loud and clear in the lead-up to the provincial election. This time out, which people will the government listen to?

Read more here: http://blogs.theprovince.com/2013/10/20/ben-parfitt-are-big-five-forest-firms-about-to-get-a-windfall/

Read even more here: http://www.vancouverobserver.com/news/island-timberlands-log-contentious-old-growth-forests-vancouver-island

See much more on continued threats to BC's old growth forests here: http://www.ancientforestalliance.org/news-item.php?ID=705