Government announced major changes to forest policy in B.C. that will turn stumpage on its head and replace FRBC. Enhanced forestry got an increase in funding in spite of program cutbacks in other areas.

Forest Investment Account Update-Enhanced Forestry Funding Increase; Stumpage etc. Turned on Head

Everybody should hit the reverse button and play back this week’s open cabinet meeting. (You can actually do this by going to http://www.gov.bc.ca/prem/popt/cabinet/playback_videooct_24.htm ) In the course of last Wednesday’s morning of politics the Liberals—who are now noted for having their story and sticking to it—made good on their promise to make dramatic changes to the ailing B.C. forest industry. Unplugging Forest Renewal BC is a sideshow compared the implications of turning the stumpage system on its head. Which, in essence, is what Minister de Jong got approval to do.

Appurtenancy, cut control, stumpage royalties, and repossession of cutting rights, the foundations of the status quo for policies governing the forest industry, are all up for radical change, if not abandonment. All this in aid of “maximizing” returns from publically owned timber. Minister de Jong pointed out how previous policies were developed for “social engineering” purposes and were not geared to the marketplace. This practice created distortions in the distribution and cutting of wood often producing the wrong products, putting wood at the wrong mills, and cutting wood when there wasn’t any market. Under the old system prices and revenues were out of touch with marketplace realities said the minister.

The minister used the words “market driven” on numerous occasions referring to the new pricing regime which he promised would be in place by next year. These changes could have huge social impacts as forest companies will no longer be tied to delivering wood to certain mills in certain communities. However, at the same time, the minister suggested that with tying government revenues to the marketplace, stumpage rates might actually increase, as companies work to extract more value from their products to stay competitive. The end result would be more taxes, benefits, and jobs from the resource.

As for silviculture de Jong announced a tightening of focus of funding for the Forest Investment Account that will replace the moribund FRBC. Enhanced forestry will actually see an estimated 20 per cent increase in funding levels next year with a proposed $49-million budget. This will happen as overall investments fall to half the previous FRBC forecasts with approximately $134-million budgeted. This includes $9-million for value-added, $32-million for inventory, $20-million for research, $24-million for environment. The information provided at the meeting did not mention money for backlog reforestation or the fate of the estimated $300-million left over in FRBC equity including the program continuity fund.

Even with the increase, current silvicultural levels are not where they need to be to make us “globally recognized” for our forestry practices. Enhanced silvicultural activities have recently slid under FRBC’s watch to levels we outgrew two decades ago. The smoke has not cleared enough from the latest announcements to see whether the minister has got religion on silviculture. The plan is to have government set the course and then let free enterprise release the ingenuity to make it work. The minister and all of us in this for the long run have now had our hopes pinned to the success of this strategy. If it works it will raise the funds we need to practice silviculture at the appropriate levels as well as create a major revolution in our forest sector. If it doesn’t it will be business as usual which doesn’t look like much business at all.