BC's forest industry has been in steady decline for two decades, with the US/Canada Softwood Lumber "Disagreement" being the latest blow. The economies of many rural forest dependent communities were collapsing well before the expiration of the Softwood Lumber deal. Towns like Sayward, Tahsis, and Youbou, once thriving forest sector towns, may soon be little more than points on a map.
What's ironic is that these towns are located in the middle of productive forest farms and, worse, some had profitable sawmills shut down. In the last decade alone, more than 14 saw and pulp mills have been shut down, throwing thousands out of work and devastating BC's rural economy. While many corporations are down sizing milling infrastructure, raw log exports have increased. Ironically, BC's Annual Allowable Cut has, until the most recent imposition of US countervailing duties, remained relatively high.
There are many complex reasons for the decline of the forest industry in BC: Changing global markets, loss of high quality softwoods (Old Growth), and a noteworthy change in the corporate psyche to one of utter disregard for anything (or anybody) but maximizing profits.
At the heart of BC's difficulties is a government-sanctioned forest land tenure system. Nowhere in the developed world is so much of the forest land base controlled by so few. Furthermore, these forest lands are virtually all public. This concentrated corporate control of public land is without parallel anywhere. The American claim that our forest industry is not free market based is probably true. BC corporate tenure holders horde their timber quota, selling only uncommitted surpluses to small local mills.
Timber value can be difficult to determine because the vast majority of logs cut are used internally by corporations and seldom make it to the public auction block. Stumpage, paid to the government for cutting rights is often under valued. Some forestry officials claim the only way they are able to set stumpage rates is through the value of exported raw logs. In effect, we do not have free and open log markets in BC, which leaves the survival of local, untenured manufacturing facilities at the whim of the forestry giants.
The problem with BC forest economics may not be the result of free market conditions or capitalism, but the lack thereof. When we examine the successful forest economies of other countries, like Germany or Sweden, we see that control of the forest resource is highly decentralized and controlled by many small woodlots. In the European Union there are over 1 million licensed small woodlot operators who, independently or cooperatively, direct their timber to saw mills and other specialty manufactures at fair market values.
A major revitalization of our provincial forest economy could be accomplished by a simple stroke of a pen--reform forest land tenure. To a certain extent, the government has recognized the importance of small scale forestry by creating the BC Woodlot tenure. There are presently 800 family owned and operated woodlots throughout BC and they are, by all accounts, exemplary models of forest management.
These tenures, from 200-500 Hectares in size, are coveted by their owners and the pride of the BC Forest Service but represent only a tiny fraction of BC's managed forests. They are the antithesis of the Tree Farm Licence industrial model.
Woodlot owners nearly always live in the communities most affected by their operations and are accountable for their activities. They hire local loggers and contractors and logs are sold to local manufacturers at fair market value. According to the BC Woodlot Association, not only do woodlot owners employ locals, they hire 3 loggers per thousand cubic metres cut--this compared with the Tree Farm Licence Industrial model which provides only 2/3 of a job per thousand cubic metres cut. Woodlot operators also hire more outside help, like mechanics, foresters, and accountants, than do corporate Tree Farm Licence holders. How can this be? Simple economics. Big corporations put the value of a tree into expensive helicopters, office towers, high priced executives, and shareholders. The woodlot operator puts the tree's value into his home, his employees, his contractors, and his community.
And there are other significant attributes of woodlot tenure. They completely embrace free market principles by maximizing timber value. Woodlot style tenure offers the kind of transparency demanded by the US forest sector representatives in softwood lumber negotiations.
Furthermore, woodlot operators provide a steady supply of timber for the open market, a reliable wood supply which will, over time, encourage more value added industry to locate in smaller forest communities. This system is virtually identical to European economic forestry models in terms of employment rates in the woods, and in the mills.
"Magic bullets," easy solutions to regional economic or social problems, are rare but Ralph Keller, long time student of logging practices and forest policy insists there is an effective way to turn the BC forest economy around, for good: Reform the Land Tenure.
Finally, increasing the availability of free market wood will encourage entrepreneurs to maximize local and export market potential, and efficient utilization of wood. Along with all this comes greater community stability, greater employment levels, and increased tax revenues for provincial coffers.