New management system for the forests seeks sustainability and viability

With the British Columbia forest industry suffering perhaps its most significant days of decline in recent memory, the provincial government is hoping that revisions to land resource management plans and a new management system will leave the forests stronger and more viable for dependent communities.

The Daily news featured details of Forest Minister Pat Bell’s thoughts on the Forestry as the new objectives come into force.

Allowable annual cut slashed as Bell looks to future
By Leanne Ritchie
The Daily News
Monday, February 11, 2008
Pages one and three

On the same week that the province announced it had signed into law new objectives for eco-system-based management (EBM) objectives for forestry, B.C. continued to reduce the amount of timber available for harvest on the North and Central Coasts.

During the past two years, in an effort to achieve the objectives laid out under the Land Resource Management Plans for those areas, including EBM and establishing new conservancies (protected areas) the province has reduced the overall timber available for harvest in the regions by 22 per cent.

Yet, Pat Bell, Minister of Agriculture and Lands said he believes the new management system will result in stronger local economies for communities.

“It ensures long-term sustainability and focuses on economic values to ensure that we have a viable forest industry and one that our First Nation partners can benefit from and build their communities on,” said Bell.

Bell made his statements at a celebration of the two-year anniversary of the signing of North and Central Coast land-use plans on Thursday.

While there was a lot of back slapping, there was no mention of the province’s decision in the recently-announced Coastal Forestry Plan to continue to allow 35 per cent of raw logs harvested on the North and Central Coasts to be exported without being offered to domestic log buyers, or the expansion of this order to include the Queen Charlotte Islands.

Nor was there any mention of the province’s own review of raw log exports, which stated the Eco-System Based Management practices necessitate the need to increase raw log exports from the region because tenure holders will need to export up to 50 per cent of hembal logs overseas where they will get a higher value.

Under last week’s announcements, the new allowable annual cut for tree farm licence 25 – including parts of the Queen Charlotte Islands, Central Coast communities of Bella Bella and Klemtu and areas around Campbell River - will be 529,000 cubic metres; a reduction of almost 10.000 cubic metres.

The new allowable cut accounts for conservancies (protected areas) established through the Central and North Coast Land Use decisions. The previous allowable annual cut for tree farm licence 25 was 625,500 cubic metres.

“This is a complex decision involving a tree farm licence that is spread across a large geographical area,” Craig Sutherland, deputy chief forester noted in issuing his determination.

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“Forest practices in the area are changing due to land-use planning decisions, and the implementation of ecosystem-based management. This cut level will ensure sustainability and the sound stewardship of coastal forests.”

Under the timber supply review, the chief forester or deputy chief forester determines how much wood can be harvested in each of the province’s 37 timber supply areas and 33 tree farm licences at least once every five years.

Last November, the allowable annual cut for the North Coast timber supply area was also reduced to 400,000 cubic metres, a reduction of more than 170,000 cubic metres since 2006 levels.

The province’s chief forester Jim Snetsinger said the reduction accounted for 24 conservancies established within the timber supply area in 2006 and 2007, as well as the impacts of applying ecosystem-based management and the conservancies are key elements of the province’s North and Central Coast land0use decision, announced in 2006.

Overall, it’s a 22 per cent reduction in harvest levels.

“The province has committed to full implementation of ecosystem-based management by March 2009 and additional protected areas within the North Coast TSA may be established,” said Snetsinger, at the time of the decision. “To ensure harvest levels are sustainable, I am prepared to review this cut determination earlier than five years if necessary.”

Canfor gives Mackenzie hope for the future

Canfor has removed the cloud of uncertainty hanging over the town of Mackenzie since May, the BC forest company today announced that the sawmill in northeastern B. C. will remain open, working on a modified shift schedule and keeping over 300 Canfor employees on the job.

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The development was greeted with happiness by municipal officials in Mackenzie, who will still continue on with their plans to diversify the local economy.

While the news is good for most of Mackenzie, there still will be 130 workers who will lose their jobs with the downsizing, as an older and smaller mill on the Mackenzie site will be shut down.

The opinion 250 website had full details on a much anticipated decision from Canfor.

Canfor Gives Mackenzie Reprieve
By 250 News
Friday, July 27, 2007 02:45 PM

More than 300 jobs at Canfor’s Mackenzie sawmill have been spared.

Canfor has made a decision on the Mackenzie Mill’s “indefinite” shutdown.

The company has decided it will close the old, small mill, but will maintain the “A” mill and will triple shift that facility. The decision means 320 jobs will be maintained.

There will be reduced production however, there will be changes to the mill’s efficiencies.
The decision means there will still be job losses, about 130 people will be displaced. There will be retirement packages offered and the Company says it will do what it can to find positions for employees throughout the Canfor operations.

It also means there is job certainty for the community partners , including the logging contractors, who rely so heavily on the Canfor operations in Mackenzie.

Prince George North MLA Pat Bell says the Mackenzie team worked extremely hard to achieve this result. “The employees have all worked hard to find ways to increase the efficiencies, the management team has really pulled together, and this is a victory for everyone. It is their day to celebrate.”

Canfor has just released its second quarter results which show a continued loss. This quarter, the loss was $38.8 million, down from the first quarter loss of $42.7 million.

Time of historic transition for the Coastal forest industry

The Truck loggers Association has weighed into the debate over the sustainability of the forest industry along the B. C. coast, providing a working paper designed to address issues in the industry with the release of the Forestry Revitalization Plan of 2003.

Their paper is designed as an answer to their concerns of some of the government plans as outlined in that plan of 2003.

The Daily News broke down the issues, with a front page story in Monday’s paper.


‘FOREST INDUSTRY ON COAST AT FORK IN THE ROAD’
By Leanne Ritchie
The Daily News
Page one
Monday, November 27, 2006

The Coastal B.C. forest sector must follow a clear new strategic vision if the industry is to move forward with any success, says a new report by the Truck Loggers Association (TLA).
“We wanted to step back and take a fresh look at how we can assist government in getting where the province needs to go,” said Jim Girvan, TLA executive director.

“We’re in the middle of a historic transition on the coast and if we want to ensure government maintains the ability to provide social programs like health care that benefit all British Columbians then we want to ensure change on the coast goes in the right direction — for everybody.”

The ‘working paper’, entitled Markets and Market Forces: The Key to Prosperity for the Coastal Forest Industry, outlines a new direction for the Coastal industry in light of the result of the 2003 Forestry Revitalization Plan.

The report argues that the “marketplace reaction to the policy changes that were introduced ... effectively derailed the achievements of some of the plan’s key objectives.”

Among the TLA’s concerns are that the provincial plan led to a greater monopoly in the coastal forest sector, that there has been a systematic reduction of the coastal log market which has tightened supply; that log shortages are widespread across the coast; that log exports continue to leave the province as many independent mills struggle due to a lack of raw materials; and that the 20 per cent tenure take-back caused many highly trained workers to leave the industry.

In order to counter this, the TLA has developed a vision they believe will ensure a future for the industry, beginning with competitive log markets.

“With almost 65 per cent of the current coastal (annual allowable cut) in the hands of four players, and 42 per cent controlled by a single company, it’s imperative that all other market-based forest volume is harvested and comes to market,” reads the report.

The report recommends the government allow 120 percent of the current B.C. Timber Sales (BCTS) allocated volumes currently implemented during the next two years, improvement of the bureaucratic cutting permit approval, changes to current log export policy to encourage open market competitiveness and fair market pricing, a new licencing arrangement facilitating concurrent salvage of waste pulp log volumes be investigated, that the current “take or pay” policy be reconsidered, and that the Crown moves to variable pricing on all BCTS auctions immediately.

Secondly, the vision outlines a strategy that would improve the labour market for the forestry sector by having the government provide more certainty by ensuring steady logging, and by the province doing more to promote forestry jobs at the school level.

Thirdly, the paper advocates for a system that protects the working forest land base, meaning there must be a commitment to providing a steady supply of competitively priced forest to be logged.

The TLA calls on the province to ensure Ecosystem Based Management practices are applied equitably and the costs covered and that the North and Central Coast Land Resource Management Plans (LRMP) be modified to include economic criteria.

Lastly, the paper calls for an equitable taxation plan that includes the extension of the PST exemption for logging equipment to cover machines, equipment and supplies used for road building in support of forest harvesting. The paper also calls for the government to work with municipalities to bring municipal taxation of the forest industry in line with other jurisdictions, and that “traditional territory payments” (TTPs) made by companies to First Nations be deducted from stumpage fees.

The Daily News is available on line at this link.

Terrace Lumber goes down again, now on the auction block!

The auctioneers have moved in and the great experiment in keeping a part of the forestry history of Terrace will soon be coming to a close.

The began an auction at the Terrace Lumber Company site today, lot after lot after lot of deals waiting for a bid and a bang of a gavel.

It was reborn after the failure of New Skeena Forest products and almost went up for auction in 2005, only to be rescued by local business men who used a 1 million dollar loan from the City of Terrace to try and get the operation back to a healthy state.

With delays and uncertainty over the pulp mill in Prince Rupert, the market for any chips that might be generated by the mill became smaller and the state of the lumber industry in general in Canada over the last few years worked against a re-birth as well.

As the months would go by it became apparent that it was going to be a struggle to make a go of it and the mill shut down for good this past summer. Maynard’s auction took over the file and began setting up for the auction earlier this week, with the first bids accepted today.

The Daily News covered the developments on its front page and the auction was covered extensively on the Terrace Standard website.

TERRACE’S FORMER SKEENA MILL ON THE BLOCK AGAIN
Auctioneers set to sell mill today after TLC’s efforts to restart it falter
By Leanne Ritchie
The Daily News
Wednesday, October 25, 2006
Pages One and Two

An attempt to revitalize a piece of the old Skeena Cellulose empire dies today with the fall of a gavel.

Maynard’s Auction is in Terrace today and tomorrow to sell off the assets of the Skeena sawmill, following a failed attempt by a community group to restart the business.

At the request of the board of directors for the Terrace Lumber Company (TLC), the sawmill is being auctioned off today and the planer mill and rolling stock tomorrow.

Also for sale is the 73 acre mill site.

The sawmill, part of the former operations of Skeena Cellulose, was shutdown in 2002 and sold by the province to New Skeena Forest Products.

While just days away from being put on the auction block in 2005 following the bankruptcy of New Skeena Forest Products, a group of Terrace businessmen formed TLC and purchased the operations and land with the help of a $1 million loan from the city of Terrace, which the municipality secured by placing a mortgage on the land.

Close to a thousand people gathered in Terrace to celebrate when TLC purchased the mill from the bankrupt New Skeena in August 2005.

The equipment was purchased during the bankruptcy for $3.2 million, which was consistent with what the receiver believed the equipment was worth at auction, and the land was bought for another half a million, although the land had a market value around $2 million.

The mill started running one shift a day, employing 70 people and producing 700 cubic metres of lumber a shift. However, lumber markets have been difficult.

During this past summer, John Ryan of the Terrace Lumber Company said they would be shutting down operations and that unless an investor stepped forward, they would have to go to auction.

Yesterday, it was confirmed that the auction is going ahead.

No one from the Terrace Lumber Company was available for comment.

Former mill manager and New Skeena Products president Dan Veniez said repeatedly that the sawmill was not viable without the operation of the Watson Island pulp mill in Prince Rupert and vice versa because of the decadent fibre basket in the Northwest.

The pulp mill was purchased by a group of Chinese investors known as Sun Wave Forest Products. They are understood to be seeking start up financing for the mill.

However, Ryan, in an interview this August, said the failure of the company had more to do with the high Canadian dollar, unstable lumber markets and the high cost of harvesting timber in the rotting Northwest profile than the lack of a pulp mill.

“The pulp mill operating would have made a little bit of difference but not a lot. The price of saw logs would have been perhaps a little cheaper,” said Ryan, at the time.


All kinds of stuff is on sale today at Terrace Lumber
By SARAH A. ZIMMERMAN
Terrace Standard
Oct 25 2006

SO, JUST how good are the deals at today and tomorrow's auction at the Terrace Lumber Company's sawmill and planer?

Depending on the item people could spend anywhere from $20-$150,000.

And with more than 2,000 lots up for grabs over the next two days, there is plenty to choose from.

Even the few logs that remain at the mill have white tags with a lot number on them.
Officials from Maynard's, the auctioneers hired to conduct the fire sale, have been in Terrace for nearly two weeks diligently tagging items ranging from collections of hand tools and office supplies to front end loaders and forklifts.

But what the items will go far is all up in the air, says auctioneer and project manager Mike Seibold.

A giant Ahlstrom chipping head - a menacing looking circular shaped saw - should fetch in the range of $15,000, but "You never know," says Seibold.

"That's the thing with a sale - sometimes stuff will go up in price some will go down."

Equipment is laid out throughout the mill's property - in the yard and inside the sawmill proper.
A row of ladders, wheelbarrows and metal garbage cans filled with brooms, shovels and other tools, line one area, each item or group of items neatly tagged.

The collection of hand tools can go for anywhere from $50-$100, while the dry kiln alone could fetch in the range of $150,000, says Seibold.

Also up for grabs is the sub station across the street from the sawmill, which could also got for $175,000.

The selection of forklifts varies from newer models to older ones, and the prices could go anywhere from $20,000 to $70,000, Seibold says.

"It depends, everyone is kind of particular about what they like," Seibold said.

Seibold has been fielding upwards of 50 calls per day for the last week from people making inquiries about the Terrace Lumber Company auction.

He's received calls from all over North America including California, Oregon and Idaho. He's also had some interest from potential buyers in New Zealand.

The two-day auction starts today, Oct. 25 at 9 a.m. The first day will consist of larger items in the sawmill and the next day will see all the rolling stock, planer mill items, vehicles and office supplies going on the block.

Seibold says the auction won't stop until everything has been sold.

"We're here until we're done," he said. "We'll sell it all."

Those who do purchase items from the auction are also required to pay a buyer's premium of 12 per cent if they are on site and 15 per cent if they place winning bids on line. The premiums are paid to Maynard's as part of its fee and are not part of the revenue going to the Terrace Lumber Company.