Category Archives: Opinion / EdiTOADial

Opinion / EdiTOADial

Modern technology could end illegal logging

By Carlton Owen
Emeritus President & CEO, U.S. Endowment for Forestry and Communities
September 9, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Carlton Owen

While the United States and Canada continue their more than four-decade war over softwood lumber imports/exports, a malignant enemy is undercutting the forest sectors in both nations and stealing billions in global economic value every year.  Illegal logging – the harvest, transportation, purchase, or sale of timber in violation of laws – not only takes money from the pockets of landowners, both public and private, but it also destroys irreplaceable ecosystems and drives human-induced climate change as well. The American Forest and Paper Association puts the impact to the U.S. industry at $460 million annually. While not chump change, the number appears to be a rounding error to the problem globally. …Estimates of the global costs of illegal logging vary widely from a low of US$15 billion to more than US$200 billion annually.

What about Solutions? We must appeal to the power of first-world markets and technology to cut deeply into the problem. In my last couple of years at the U.S. Endowment for Forestry and Communities, we hit upon what I believe could be the breakthrough solution – blockchain technology.  The ability to track wood anywhere in the world from its source to the market. The Endowment created ForesTrust, a blockchain ledger-based technology, as the vehicle that if embraced could drive the nail in the wooden coffin of illegal logging. …It’s past time to stop the flow of illegal wood and wood products.  Landowners and governments need the revenue that is being stolen. And our precious forests around the world – especially those in parks and reserves – need greater protection for the benefit of current and future generations.

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Canada’s greenhouse gas offset credit system could be a game-changer for forestry

By Tony Kryzanowski
The Logging & Sawmilling Journal
September 7, 2022
Category: Opinion / EdiTOADial
Region: Canada

In a historic move that could change the face of forestry in Canada and even potentially the Canadian landscape, the federal government has launched a Greenhouse Gas (GHG) Offset Credit System as part of Canada’s 2030 Emissions Reduction Plan. This changes everything. Tree farming on previously unforested land, called afforestation, has suddenly become affordable. Forest companies—and landowners—will soon have the ability to begin to recuperate the cost of establishing tree farms the year after making the investment, through the sale of GHG offset credits. All that is currently lacking is the federally-developed offset protocols for forest management, which are currently being developed and presumably will be announced before 2030. And it’s about time. Trees are nature’s carbon sponges.

This presents the opportunity for both the lumber and pulp industries to co-operate on land management, sharing in the carbon offset credit revenue to help pay for the establishment of the plantation, while benefiting from additional fibre sources over a shorter time span. …There is plenty of room in Canada for both conventional crop farming and tree farming. The key is to plan strategically and aim, for example, at productive land parcels that are difficult to farm but could still generate income through the sale of carbon offset credits. Parcels as small as one hectare could still be monetized into a valuable tree farm. …If Canada wants to achieve its GHG reduction targets, it’s going to have to do a lot more than just pump carbon dioxide back into the ground… and making tree farming affordable goes a long way toward building a natural climate change solution.

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Forest companies adjust their hiring processes as labour participation rates remain below pre-pandemic levels

By Kevin Mason, Managing Director
ERA Forest Products Research
August 22, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

Labour participation rates have failed to return to pre-pandemic levels, job vacancies are outnumbering unemployed workers on both sides of the border, and it appears we are drifting toward a “job-full” recession. One area in which labour shortages are being acutely felt is transportation. Trucker shortages are nothing new, and last year the American Trucking Association reported that the industry had a record-high labour shortage—80,000 drivers—and is anticipating even higher numbers in the years ahead. However, the deterioration of North America’s rail service is a more recent phenomenon as carriers struggle with crew staffing. Canadian forest products companies have long complained about patchy rail service, but the problem has worsened in the past 18 months.

When announcing capacity closures in BC last week, West Fraser specifically mentioned transportation constraints that have impaired its ability to reliably access markets. In the U.S., we are also hearing about rail-service reliability issues, with Cascades and Potlatch both calling out rail challenges on recent earnings calls. A recession-induced pullback in demand could ease the strain on the rail networks in the coming months, but there are few obvious signs of just how the structural labour shortages will be addressed. A few examples of efforts being made by companies to tackle the labour challenge include: Canfor’s capacity expansion in Mobile, Alabama (Canfor hopes to move the workforce over at that time) and Enviva now hires in cohorts instead of filling vacant positions on an ad hoc basis. Labour solutions aren’t easy, but they are being broadly explored. 

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The ‘jobs/m3 harvested’ metric can lead to false conclusions

By David Elstone, Managing Director
The Spar Tree Group
August 3, 2022
Category: Opinion / EdiTOADial
Region: Canada

One of my biggest pet peeves is the misguided expectations that come from using the number of jobs per thousand cubic metres of timber harvested to compare British Columbia’s forest sector to other jurisdictions. Critics have attempted to associate BC’s comparatively low generation of jobs per thousand cubic metres harvested to issues such as log exports, mechanization, forest management practices and minimal value-added processing. …BC is often compared to Quebec and Ontario, which have much higher jobs per thousand cubic metres harvested. …Jobs per thousand cubic metres of timber harvested is a relative metric useful for comparison to other regions, but it does not tell the behind-the-scenes story. 

Looking at the absolute numbers separately – total provincial harvest volume and total number of jobs – a new story emerges.

  • Species profile: of Quebec and Ontario are much higher to hardwood species, which lends itself to specialty wood manufacturing.
  • Trade flows: British Columbia is a net exporter of logs. Quebec is a net importer of logs (mostly from the US).
  • Pulp and paper: Quebec and Ontario have a focus on pulp, paper, paperboard products which supply the large nearby population centres.
  • Industry structure: Quebec has by far the most sawmills, panel mills, and pulp and paper mills of any province. Many of those sawmills are small.

So, when critics say that BC should create more jobs per thousand cubic metres harvested like other provinces, such as Ontario and Quebec, what they are really saying, unknowingly, is that BC should import more fibre, have more pulp and paper mills and decrease the industry’s global competitiveness by becoming less efficient.

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Lumber prices find a near-term floor. Pending stumpage increase will put many BC mills in the red.

By Kevin Mason, Managing Director
ERA Forest Products Research
July 5, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

Having spent the past two months in freefall, lumber prices have found a near-term price floor. Western S-P-F 2×4 prices declined from $1,090 in early May to a low of $555 in mid-June, but have since rebounded to $600. SYP 2×4 prices corrected much earlier than S-P-F and thus had less room to fall this quarter, but they are still off by $274 since early May (trading at $560 last week). The correction in lumber prices this quarter has been driven by a combination of improved supply and slowing demand from the residential construction sector. While the outlook for demand, and particularly residential construction, remains shaky, we do expect lumber supply to also check back in high-cost BC.

A look at our regional lumber margin comparison table shows just how challenging BC sawmilling economics have become. …When government stumpage rates increase in BC next week, we think log costs will rise by up to US$25/m3, effectively adding more than $100/mbf to total lumber production costs. This will push our theoretical breakeven lumber price above $600 for BC producers, even before factoring in the impact of duties. For less efficient mills with a weaker lumber recovery factor (i.e., the volume of logs required to produce one thousand board feet of lumber) and higher conversion costs, that breakeven price point could be comfortably above $650 in the quarters to come. In the U.S. South, delivered sawlog prices have risen from ~$43/ton to ~$48/ton in the past couple of years. While we expect them to continue grinding higher in the years to come, southern mills’ log costs remain less than half of those in BC.

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After a sharp but short-lived correction, lumber prices are poised to move higher again

By Kevin Mason, Managing Director
ERA Forest Products Research
May 3, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

The impacts of Russian-Ukraine war are broad-based and still developing; however, the focal point of the challenges remains Europe, particularly with respect to energy. Global currency shifts are in motion. Housing starts remained strong last month. Rising rates aren’t expected to meaningfully impact demand until 2023. R&R is softer. Log markets are good almost everywhere, with prices rising sharply in the PNW and some parts of the U.S. South. Location matters.

After a sharp but short-lived correction, lumber prices appear to have found a floor and are poised to move higher again.  Average prices this year will exceed 2021, we suspect. Panel prices have cracked, but they are likely to post upside surprises this year. OSB imports have seen a dramatic drop (war-related?). Pulp prices are still headed up in all markets amid supply challenges. Brutal logistics have kept markets tight, but China issues are a risk. Newsprint prices are climbing through April/May and we don’t believe we are at the peak yet. Offshore pricing is much higher than domestic. Paper prices are up everywhere, with more gains coming through Q2 and likely Q3. Buyers are panicked amid limited supply. Containerboard markets are stable domestically, but the offshore market is picking up steam.

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WATER: The MOST Important Forest Product, Let’s Act Like It

By Carlton Owen, retired CEO, US Endowment for Forestry and Communities
Tree Frog Editorial
April 26, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Carlton Owen

We in the forest sector love to remind people of the thousands of products made from trees.  Beyond lumber and paper, we are quick to note, among others, the filler in grated parmesan cheese, rayon clothing, toothpaste and more. …It is important to be factually sound in the era of “alternative facts.”  But we in the forestry sector all-too-often state those facts sans emotion.  In doing so we come across as uncaring and preachy.  In her blog titled, “Scientists Have Feelings Too,” Faith Kearns, a self-described scientist and communicator with the California Institute of Water Resources, provides a vivid example.  She writes, “Historian Naomi Oreskes argues that scientists should express more alarm about climate change. …Finding the balance between being factual and doing so with natural human emotions shouldn’t be as difficult as we seem to make it.

Is it possible that we as forest managers or anyone who works directly in the forest sector, might connect more deeply with those who lean more toward the preservation approach if we acknowledged that forests are more than just fiber farms?  If we showed, through our emotions, that we loved forests just as deeply as they?  And that not EVERY forest has to be or even should be managed for human needs and wants? …It’s time we learned to connect better with all citizens who love forests.  Part of the formula for doing so is rooted in not just what we say, but as my wife is always quick to tell me, “how” we say it.  Too, finding a common starting point of agreement, such as the importance of forests for water, may just help get those conversations off on the right foot.

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Expect even higher lumber prices in 2022, followed by a screeching price collapse

By Russ Taylor, Russ Taylor Global
The Truck LoggerBC Magazine
April 6, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

North American lumber markets continue to strengthen from ongoing logistical problems and supply chain woes. …SPF mills in BC continue to face railcar shortages… and now the Russia- Ukraine invasion threatens lumber exports from the world’s largest exporter. This event will only tighten up the world’s lumber supplies and push prices even higher, especially in Europe. …US lumber and panel demand continues to advance, spurred on by COVID-19 constraints and steady demand for new homes. US housing starts continue to move higher and reached 1.597 million units in 2021, a 15.8 per cent increase from 2020. However, a slower rate of new house construction is forecast for 2022 (+3 to 5 per cent) as builders simply cannot build houses fast enough. …US repair and remodelling activity accounts for 40 per cent of US lumber consumption and it is expected to increase significantly again in 2022. 

North American softwood lumber companies took strong advantage of the soaring demand to achieve record earnings in 2021. Lumber prices hit all-time highs and could be on the way to another record price this year. However, soaring prices can only mean one other consequence: a screeching price collapse that will most definitely occur after the peak is reached. The top lumber companies mainly expanded by acquisitions in 2021, but other output gains were from major capital expenditures at existing mills to increase production capacity, lower costs and improve yield and revenue. There is one clear trend in the lumber business: consolidation is continuing, and the big companies continue to grow and expand almost exclusively in their own continents. And with higher prices, lumber companies’ war chests will continue to grow even faster to take on more acquisitions and/or capital investments.

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Wood Markets – Expect Volatility with High Prices in 2022

By Russ Taylor, Russ Taylor Global
Truck LoggerBC Magazine
April 7, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

The volatility in wood markets and supply chains is ratcheting up again as new developments have caused a resurgence in lumber (and panel) prices since the end of summer. One of the questions that many buyers and sellers keep wondering is, when will the markets return to a more balanced situation without the wild price swings? Well, do not expect it to be any time soon! …Here are some reasons: the ongoing shortage of mill and port workers, and especially truck drivers; ongoing supply chain disruptions, like the November rain and windstorms that wiped out road and rail infrastructure in BC; containers for export markets continue to be in short supply; December 1 increase in softwood duties on Canadian lumber imports (from 9 per cent to 17.9 per cent); and high demand for housing.

China’s market story is different as a huge cloud is sitting over the Evergrande debt crisis and has slowed activity in the whole Chinese construction industry. …New Zealand is the largest supplier of logs to China and it has already laid off about 30 per cent of its logging crews. The second largest log supplier, Central Europe, has seen falling log prices for beetle-killed logs despite soaring prices for “fresh” logs at home. …Meanwhile, a log export ban from Russia went into effect on January 1, as did a new lumber export tax on “square logs”. …The looming question for lumber exporters to China is: will China substitute lumber for scarce log supplies, and how will Russian lumber exports fit in?

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ERA comes clean on April Fool’s prank. Here’s what they really think about supply chain woes.

Kevin Mason, Managing Director
ERA Forest Products Research
April 1, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

ERA comes clean on April Fool’s prankAlmost every company seems to have struggled with supply-chain congestion, bottlenecks, and an inability to adequately restock, or ship, certain items. The latest update to the Global Supply Chain Pressure Index hints at mild relief on a global basis, but more struggles in Europe. Both the global and European situations have surely worsened, as the war in Ukraine has intensified this month amid sanctions that are beginning to bite; also, Western companies have begun withdrawing from the area. We expect the next quarter or two to show little relief, but things will be significantly better by year-end.

As much as we are reading about recessionary threats and the general macroeconomic malaise caused by Russia’s invasion of Ukraine, for now (at least) the U.S. housing market remains in rude health. Housing starts took a somewhat unexpected jump in February, increasing by ~7% m/m and 22% y/y to a seasonally adjusted total of 1.77MM units. Single-family starts accounted for an adjusted ~1.22MM units (up 6% m/m and 14% y/y), with multifamily making up the balance of 554,000 (up 9% m/m and a whopping 47% y/y). Adjusted permits slipped by ~2% m/m to a still-strong 1.86MM (up ~8% y/y). Here is our latest industry overview…

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Wooden Railcars and Blimps To Resolve Lumber Transportation Backlogs; Positive for Producers of Everything

ERA Forest Products Research
April 1, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

Lumber producers are getting creative in the face of adversity, combining forces with rail service providers to build wooden railcars, drawing on lumber inventory accumulations. In addition, the Québec government’s recent investment in airship company Flying Whales may also be tapped for alternative transport. Reports of hyperloop solutions have not been confirmed by ERA.  Why it matters: Supply chain constraints—and particularly railcar shortages—have multiplied since late last year, hurting access to market for lumber and pulp based in British Columbia. 

Who wins? Newly-minted wooden railcars will simultaneously ease supply chain backlogs and reduce lumber inventory overhangs. The improved flow of goods will relieve shortages not only of lumber but also all other stalled commodities. New, more robust wooden railcar prototypes may be able to transport oil and gas in time (fire-resistant wood is under development by the Canadian Forest Products Association). We expect lumber producers to benefit from relieved inventory pressure and the development of the new business lines, but impact on 2022 EBITDA is difficult to forecast at this time. Who loses? No one in our universe loses from improved rail service. How to trade it: We continue to like everything based on wood. Wood is good, as we all know, especially on the first day of April. 

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The global supply chain is a mess as “just-in-time” delivery becomes “just-in-case” buying

Kevin Mason, Managing Director
ERA Forest Products Research
January 31, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

A recent story in Bloomberg confirmed what we all know: the global supply chain is a mess… and a January report by Goldman Sachs puts the congestion at a 10 out of 10. …These supply chain tensions are being felt acutely in virtually every industry in North America (and beyond) and the forest products industry has not been spared. The impacts are now also bubbling up to the consumer level, with prices rising rapidly and shelves emptying.  A key issue throughout this supply-chain crisis is that concerns—or uncertainty—cause people to panic, inducing more panic buying and prolonging the problem. People hoard— that is a reality—and it isn’t just consumers. We hear of companies hoarding railcars; corporate buyers double- or triple-ordering product; etc.

In many cases, especially in the forest products industry, it appears the inventory in the supply chain is sufficient to meet actual consumption, but the volumes often aren’t where they are needed. Also, as buyers try to secure more goods, demand exceeds consumption, giving a false sense of market strength. We built a system for just-in-time delivery, but now people are focused on “just-in-case.” This craziness will dissipate somewhat this year, but we probably aren’t returning to normal until 2023 most likely (barring a recession). How quickly the supply chain returns to normal (or a semblance of normal) will have a huge impact on price action over the next couple of years.

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It is possible for the environment and business to get what they want – A memorial to Dr. Thomas Lovejoy

By Carlton Owen, retired CEO, US Endowment for Forestry and Communities
Tree Frog Editorial
January 25, 2022
Category: Opinion / EdiTOADial
Region: Canada, United States

Carlton Owen

Just as 2021 was ending, America and the world lost two of its best known and most influential conservation scientists – Dr. Thomas Lovejoy (12.25.21) and Dr. Edward Wilson (12.26.21). Deep thinkers like these two who have the ability to popularize science in ways that appeal to the masses come along all-too-rarely. …Tom Lovejoy was a colleague and friend. Of the many stories I could share about Tom, I want to focus on just one – the legacy of a noted conservation scientist willing to risk his reputation by working closely with corporate America. Here’s the tale. For the decade of the 90s I worked with the forest products giant, Champion International. The company was among the largest private forest owners in the US, managed large forest tenures in Canada, and had pulp and paper mills and short-rotation forest plantation in Brazil.

…The company’s plan was to establish perhaps as much as 500,000 acres of short-rotation eucalyptus plantations and then ship wood chips out the mouth of the Amazon River to our facilities across Canada and the US. As a result of the great work of our team and under the guidance of Tom Lovejoy, the results exceeded everyone’s expectations. The team found amazing plant and animal populations including a couple of species new to science and even the presence of a fish-eating mouse never-before reported in the region. …As I think about my friend Tom Lovejoy, it’s easy to consider how few people of his reputation would ever have given a second thought to working with a large forest products company. Our world needs more Tom Lovejoy’s as we wrestle with the challenges that face our planet and the needs of nearly eight billion human inhabitants not to mention the billions of our wild neighbors.

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Massive scale of top global lumber companies after recent acquisitions

By Russ Taylor, President, Russ Taylor Global
Russ Taylor Global
December 1, 2021
Category: Opinion / EdiTOADial
Region: Canada, United States

Assuming all the announced transactions are completed. …The top five companies are led by #1 West Fraser (which is also the largest OSB producer), followed closely by #2 Canfor (including its Swedish mills), #3 Weyerhaeuser, #4 Interfor (with its recent acquisition of EACOM as well as four G-P mills), and #5 Sierra-Pacific (with its acquisition of Seneca). Each of these behemoth companies have more than 5 million m3 (3 billion bf) of lumber capacity. Stora Enso at #6… with mills throughout nine countries in Europe as well as Russia. Moving up quickly in the ranks… is #7 binderholz headquartered in Austria with the strategic acquisitions of the two ex-Klausner sawmills in the US South and BSW’s seven sawmill sites in the UK, one in Latvia and seven other production sites in the UK.

Achieving the 3 million cubic meter threshold is #12 Segezha Group, a Russian company that recently acquired a major Russian competitor, LLC Inter Forest Rus, which in turn comprises 24 forest industry assets, including some world-class sawmills, and a substantial forest resource base in Siberia. The other new entry to the list is #25 GreenFirst Forest Products that acquired the six sawmills from Rayonier A.M in Ontario and Quebec, and previously had acquired one additional sawmill in Ontario. Thirteen of the top 26 companies are based in North America, with the three of the top four based in Vancouver BC. Eight of these North American companies have mills in both Canada and the US. In Europe, there are four to five companies just hovering at or below the 1.6 million m3 threshold and they should make the list soon. The top 12 companies’ capacities represent 18.4% of 2020 global lumber production, where the total list of 26 companies’ share was 25.7%

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Old Growth Forests, Wood Products, and Carbon Emissions – The Science Isn’t Black and White

Alice Palmer, BSF, MBA, PhD
Substack.com
July 26, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Alice Palmer

BC launched its Mass Timber Action Plan, partly on the premise that building with wood has a lower carbon footprint than construction alternatives such concrete and steel. Meanwhile, environmental groups continue to protest against old growth logging, in part based on claims about logging’s carbon footprint. Puzzled by this apparent contradiction in climate claims, I took a deeper look at the science underlying the carbon impacts of forestry and wood use. …Indeed, studies have shown buildings made with mass timber, emit 30 to 40 per cent less carbon from their construction than their concrete and steel counterparts. …Old growth forests contain stores of carbon absorbed from the atmosphere. Given that fact, can BC forest products, including mass timber, actually be considered carbon-friendly?

The argument against old growth logging is that the disruption caused by harvesting mature forests could release more carbon than would be absorbed by the younger trees that will grow in their place. …Researchers at Oregon State University and the US-based CORRIM consortium …found that clearcut forests initially become a carbon source. However, after about 12 years the young saplings catch up in their carbon absorption capabilities, bringing that forest to carbon-neutral.  At about 30 years trees start to add a lot of volume and…turn the forest into a net carbon sink. …The verdict? It is best to have a mix of both old and young forests. …The challenge lies in pacing the rate of logging so that the area of very young forests emitting more carbon than they sequester is balanced by a larger area of carbon-hungry teenage-to-middle-aged forests. …In a nutshell, the models suggest that harvesting old growth can be carbon friendly, especially if it is used in products like mass timber.

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Relentlessness of attacks on the forest sector can be numbing

By Bob Brash, TLA Executive Director
The Truck LoggerBC Magazine
July 6, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

There are many times when I’ve been frustrated by the headlines sensationalizing protests about forest management in BC. The relentlessness of the attacks on our forest sector becomes, right or wrong, numbing. …I’m not talking about the legal and passionate protests and dialogue about the future of forest management in BC. This is about those that flout the law, discourage real discussion, discourage democracy, and have a new brand of colonialism. One protest group dumped a pile of manure at the front door of Premier Horgan’s constituency office. Wow, that is really mature. Next, Minister Conroy’s home phone number was published online and both she and her family members received threatening messages. Wow, what kind of person does that?

The TLA has attempted to present some facts on the debate including three billboards on Vancouver Island, which have been vandalized or destroyed on three separate occasions. I guess facts, dialogue, and democracy are unwelcomed in some circles. …In all the debate I’ve heard from preservationists, I have yet to hear a real option for how construction of new homes and buildings will be built, or what the substitutes are for the myriad of products originating from wood fibre. …Additionally, from a purely pragmatic perspective, the forest sector needs more than a few months to transition to the utopian vision many would have for our sector. Over the past decades of sustainably managing our forests, we can take pride in our ability to innovate and change with society’s expectations. But new products cannot be created overnight, retooling and recapitalizing cannot be done overnight, and new customers for new products cannot be found overnight.

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First Nations the alpha driver of BC forest land use policies

By Jim Stirling
The Logging and Sawmill Journal
June 27, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Recent announcements have reinforced the status of First Nations as the alpha driver of forest land use policies in British Columbia. The trend has been evolving for years. It was formalized in 2019 when the provincial NDP government aligned BC’s forest land policies to the guiding principles of the UN Declaration of the Rights of Indigenous Peoples (UNDRIP). …For years, individual forest companies have read the signs and developed working relationships with First Nation groups across the province. Forest companies get an additional timber source, much-needed in the post-mountain pine beetle era. First Nations gain a meaningful say in what happens on their traditional territories, work experience for their members and funds for band improvement projects. 

Looking back, a recurring pattern emerges in B.C. politics: a dominant group or industry has more influence with government more of the time. For years, the forest industry played that role. Those days have gone. Since then, the public has demanded and received more from the provincial forests. Environmental awareness in several forms became imprinted on the forest landscape. New parks, reserves and protected areas resulted. …But it is the future of log harvesting in ‘old growth’ forests that is the touchstone issue in BC early in 2022—and the role of First Nations is at its heart. …The provincial government has responded in effect that it will be the First Nations which will decide if and where logging is permitted and under what levels of restriction. …Under the present government formula, consultation with other groups affected by the old growth harvesting decision—including the forest industry—will only come after the fact.

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There is no going backwards on the old growth deferral process in British Columbia

By David Elstone, Managing Director
View from the Stump
May 9, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

There is no going backwards on the old growth deferral process in British Columbia. For that matter, there is no going backwards on First Nations relations. These paths are intertwined, and they have only one direction – forward. It is easy to be drawn into the mire of the BC government’s old growth deferral process. To criticize this process has been natural when the future of so many people’s livelihoods, businesses and communities have been set on a course for abrupt change. I find it hard to leave this issue alone; nonetheless, looking backwards will not take the conversation forwards….From what I have observed, First Nations are overwriting deferral areas using their own local knowledge and values – and rightly so.

From a high level, the discussion on old growth management was never only going to be about biodiversity and protecting large trees, but rather it was the door opener on land use discussions through a First Nations’ lens. The Province’s enactment of the Declaration of the Rights of Indigenous Peoples Act (“DRIPA”) made certain this would happen at some point in the future. As such, to make lemonade from lemons, this old growth deferral initiative is accelerating an eventuality in land use discussions – the sooner that such planning processes are completed the more certainty there will be on the land base with which businesses can operate. …The forest industry needs more certainty than it has today. The best way to improve that under the circumstances is to strengthen investments in First Nations partnerships… and industry is well positioned to help.

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BC needs a balanced approach to forest policy in B.C.

Susan Yurkovich, BC Council of Forest Industries
The Vancouver Sun
April 27, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Susan Yurkovich

The B.C. government is advancing an economic plan, Clean B.C., and a forest policy modernization process aimed at clean, inclusive growth and to help advance reconciliation. These policy initiatives are well-intentioned, but to achieve these outcomes, we need to implement them in a way that ensures B.C. can compete globally. Indigenous peoples within whose traditional territories forestry activities take place are at the heart of driving discussion on the future. They play integral roles as stewards of the land, owners, partners and employees. …The 100,000 workers that make B.C.’s forest sector great also have an important voice in the conversationthe tree planters, foresters, biologists, drone makers and more, who are proud to take care of forests. …And we can’t forget the next generation — forestry, biology and engineering students at colleges and universities such as BCIT, UBC, UNBC, and SFU. 

As we gather in Vancouver for the 2022 COFI Convention, some food for thought: First, we need a balanced approach to forest policy. We value B.C.’s conservation leadership. We also value forests for the jobs, recreational and cultural uses they represent. …Second, companies in the lumber or manufacturing business, whether big or small or new entrants or established players, need predictable access to fibre at a reasonable cost. Clear rules will encourage those looking to invest. …Third, we need to acknowledge forest products as tools to fight climate challenge. They are a better choice as they store carbon and are renewable. …Finally, partnership is key. We have much more in common than not, and no government, labour union, Indigenous nation, community or company can do this alone. We must work together.

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Adding Up The Numbers On BC Old Growth Deferrals

By David Elstone, RPF, Managing Director
The Spar Tree Group
April 8, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

The following quotes come from a six-month progress update on the Province’s implementation of old growth timber harvesting deferrals: 

  • BC., First Nations move forward with unprecedented old growth deferrals
  • Deferrals have been implemented on nearly 1.7 million hectares…
  • More than 80% of the priority at-risk old growth is currently not threatened by logging…

The Province’s old growth deferral initiative has been one of the most impactful shifts in forest policy in decades and has generated significant anxiety across much of British Columbia ‘s forest industry – so let’s take a closer look. …This analysis reveals that progress to defer old growth is not as moving along as well as the Minister suggests. Total deferrals (included uneconomic areas) are indeed 81% of target; however, deferrals representing 69% of target have essentially been in place since the start of deferral process. Only 12% have been the result of Ministry staff conducting successful consultations with First Nations. 

As mentioned during the press conference, a majority of forest licensees have taken it upon themselves to defer planned harvesting in TAP recommended areas while they carry on discussions with local First Nations. …Pre-emptive actions by forest licensees have resulted in log supply getting tighter. Industry rumour suggests that the coastal industry could run out of logs by Q3. Logging and road building contractors have already begun to see their amount of work curtail. …The forest industry needs predictability and the sooner that is achieved the sooner primary and value-added wood products manufacturers will know what they must work with.

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Time to Correct the Wrong

By Bob Brash, TLA Executive Director
The Truck LoggerBC Magazine
April 5, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

On three occasions, those who have been determined to bring their concerns via a rally directly to the BC legislature have been forced to cancel it. …Now, planning will be underway for the next attempt. Why the effort? Because the provincial government is making decisions that are simply wrong. Other than being one of a few hundred government spin doctors or a member of an entitled environmental corporation, all involved in our business know these decisions are wrong and that much better options exist to protect workers, communities, and the environment. On behalf of the TLA, I was going to have the honour of speaking at the rally. Well, no need to waste a speech, so here’s the essence of what I planned to say.

Frankly, I would rather be doing more productive things than be here at this rally, like moving our forest sector progressively forward. …Instead, we’re fighting international environmental corporations creating a false crisis for their own selfish benefits, trying to counter false narratives about the state of BC’s forests, trying to persuade a government to take a better path forward than their obvious capitulation to special interest groups, fighting government decisions affecting thousands of good people and forest workers, and fighting to counter decisions based primarily on political factors versus science and people. So, is there a better path forward? Of course, there is. 

…Regardless of whether this speech happens, the fundamental question is what will happen next? …Will government start to meaningfully engage with all of us or simply wait us out? 

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TLA Talks: More meaningful discussion on BC’s forest policy directions

Kelly McCloskey, Editor
The Tree Frog Forestry News
March 28, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Kelly McCloskey

Building on the success of panel sessions in January—held to initiate meaningful discussion on the impacts of policy directions taken by the NDP government— the Truck Loggers Association (TLA) followed-up last Thursday with panels on industry’s social licence and competitiveness, old-growth logging, and media and politics in BC. Moderated by TLA Executive Director Bob Brash… the first session was titled How industry can reconcile social licence and improve competitiveness of BC’s Forest Sector. Rob Wood of Holbrook Dyson Logging opened with his perspective on why the forest sector is at a cross-roads, despite record lumber prices of late. …Kevin Sommerville of the San Group, said his company’s efforts to secure and retain social licence starts with support for the First Nation reconciliation efforts of the provincial and federal governments. …FPAC’s Derek Nighbor said that recent polling on industry’s reputation shows progress is being made and that the forest sector is “the envy of other industries”.

The second TLA panel was on the management of old growth, featuring RPFs; Garry Merkel, participant of the BC government’s Old Growth Review Panel, and Cam Brown of Forsite Consultants. According to Merkel… “We need to think like an ecosystem and manage for ecosystem health… while Brown presented on the different old growth strategies that are required for different Natural Disturbance Types. According to Brown, “we can and should improve how we manage old growth. The deferrals are useful but we need to incorporate local knowledge and practical realities.” …The final session was a journalists political discussion with Vaughn Palmer of the Vancouver Sun and Keith Baldrey from Global News. Key observations made include… The pandemic has provided the NDP with a lot of cover but politics-as-usual is returning, [and] forestry’s future lies in First Nations partnerships, tenure and revenue sharing.

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NDP Forest Policy Reckless and Short-sighted

By Bill Dumont, retired Distinguished Professional Forester
Tree Frog Submitted Editorial
March 4, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Last year BC exported over $16.3 billion of forest products… But will BC forestry and the workers, communities, First Nations and professionals in this sector continue to be a robust part of our economy as it has been for more than a century? The NDP government recently tabled ideologically-driven plans to damage the forest sector, perhaps irreparably. Their plans needs a sober second look and major rethink. These radical, unprecedented proposals were dropped on rural BC communities, forest workers, unions, forest professionals, First Nations, the forestry industry and 10,000 BC businesses supported by forestry.  In my 50 years’ experience working in our forests, it’s hard to fathom why so little consultation was done with those most affected.

BC has some of the strictest forestry regimes in the world and a unique forestry watchdog in our Forest Practices Board. BC is already a global leader in forest sustainability with the most independently certified forests anywhere confirming we meet international standards for sustainability. …We have the experience and the brainpower to maintain the industry’s global leadership in sustainability and, yes, forest products production and wealth creation. We are not running out of trees in BC but the NDP is putting much of our forests off limits unlike anywhere else in the world. The NDP government and Premier Horgan need to STOP, listen and include ALL stakeholders in development of a truly balanced and progressive plan meeting the present and future needs of all British Columbians.

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The BC Forest Industry Must Up its Social Media Game

By David Elstone, RPF, Managing Director
View from the Stump
March 2, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

British Columbia’s forest industry is losing a battle against those who would prefer the sector be reduced to a small cottage industry. The evidence of such loss is real – major changes to forest policy have been implemented by the BC government, without much apparent regard to the industry. The industry has barely shown up to the fight due to an unwillingness to engage in a public campaign designed to illicit emotions. All the while the effective use of social media by the industry’s antagonists has been a game changer for the public’s perception of forestry. Some industry folk believe the public perceives the industry as “bad” so it’s better not to put ourselves out there. In my opinion, that’s wrong.

The BC forest industry underutilizes social media and leaves messaging to associations or grass-roots advocacy groups, which do their best on limited budgets. There needs to be more in the form of genuine connections from the individual companies – the employers, the forest managers, the manufacturers and the leaders. Just because a company has well-paying jobs, does not entitle it to sit back. That should be obvious with how the industry is being treated/regarded today. The forest industry must up its social media game. BC forestry has a great story to tell that desperately should be told… again… and again. 

Also in the View From the Stump: BC Budget 2022 – What it Says About the Future of Forestry in BC

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BC Government Risking Dimming The Lights on Forestry

By Jim Stirling
The Logging & Sawmilling Journal
February 24, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

The natural rhythms of the mature forest are often comfortably familiar. Every year, for example, wild flowers reappear on the forest floor in the same places they always have. But new plans influencing how B.C. forests are managed and harvested have the potential for long lasting and widely spread changes to familiar patterns. …This musing is prompted by the British Columbia government’s recent decision to not make a decision surrounding the issue of harvesting ‘old growth’ forests. Instead, the provincial government opted to foment uncertainty by deferring for at least two years any harvesting decisions on about 2.6 million hectares of B.C. Crown-owned forest land. The area joins at least a further 10 million hectares of Crown forest land already protected for other uses. 

Don Kayne, Canfor’s President and CEO said the manufacture of lumber in sawmills is the backbone of B.C.’s forestry sector. “Without a solid primary industry in British Columbia that has got the hosting conditions to invest … then we have no pulp and paper industry, we have no pellet industry, we have no secondary manufacturing industry, we have no (cross laminated timber) plants—we have none of that,” declared Kayne. “We need to figure out how to have a sustainable, globally competitive primary industry here in British Columbia to support all the rest of our ambitions.” Right now, that’s not happening. …The risk is continued government inaction could permanently dim more lights in communities across the province.

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Saskatchewan—the sleeping giant of Canadian forestry

By Tony Kryzanowski
The Logging & Sawmilling Journal
January 14, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Saskatchewan has always been a sleeping giant in terms of its contribution to the Canadian forest industry, despite its massive and mature—though seriously under-utilized—forest resource. But it seems that the giant has now finally awakened. In a flurry of press releases over the span of a week, the province announced a reallocation of its forest resource primarily located north of Saskatoon that will result in significant forest industry investment. It includes a huge sawmill expansion by Dunkley Lumber in Carrot River, Carrier Forest Products ramping up production in Big River, a OSB plant for Prince Albert by new business venture, One Sky Forest Products, and the re-opening of the geographically iconic pulp mill located north of Prince Albert, now owned by Paper Excellence. All told, it will result in over $1 billion in new investment over two years.

It’s worth noting that all of the investments being made in Saskatchewan are by companies headquartered in BC… where the mountain pine beetle severely reduced the merchantable wood basket. …There is a lot of wisdom behind Saskatchewan’s forest reallocation. By approving a new OSB plant, encouraging the reopening of the pulp mill, and making expansion and greater efficiency possible at two of the province’s largest sawmills, softwood lumber producers will now have a local market for their wood chips. Also, both softwood and hardwood resources will be harvested, resulting in better forest management as well as greater logging efficiency. Suffice to say that not only will new jobs be created at these wood processing plants, but also in logging, trucking and all the services needed to support a vibrant forestry sector.

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Modernizing Forest Policy in BC: Will it Work?

By Kelly McCloskey, Editor
The Tree Frog Forestry News
January 14, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Bob Brash, Don Wright, Stewart Muir, Brian Menzies

The final Truck Loggers Association panel on modernizing BC’s forest policy was led-off by Stewart Muir of Resource Works. “At stake,” according to Muir, “is retaining the significant role the forest industry plays in BC’s economy but also the huge potential of the forest bioeconomy.” …In describing the origin of the technical panel that recommended the old growth deferrals, Muir referenced his recent article in TruckLoggerBC. An article informed by a Freedom of Information request. The key findings being that the forest industry was little involved and an external party (the Sierra Club) defined the public process to a great degree and the composition of the committee. …Muir noted the effectiveness of the ENGO “hybrid advocacy strategy”, which involves indirect pressure from negative messaging …and direct pressure on government officials.

Next up was Brian Menzies of the Independent Wood Processors Association of BC, who characterized his membership as “value-added wood product creators and innovators.” …According to Menzies, it was Premier Horgan’s stated vision on a forest industry focused more of high-value rather than high-volume manufacturing—that spurred his organization to engage supportively. …And then all of sudden this happened” exclaimed Menzies. …But what scares Menzies the most is that these so-called  “potential deferrals” are impacting his members now, and supply is running out”. This is because more than 50% of their fibre input is from old growth forests …and the BC Timber Sales program immediately stopped any related-area timber sales. “We’re talking months before businesses start shutting down, not years from now.

Finally, Don Wright, former DM for Premier Horgan, said he believes the old growth and other policy changes occurred because “the forest industry has lost its social licence by not effectively making the case that it is essential to BC prosperity”. …According to Wright, BC is currently spending $25 billion more than it earns, financed by “selling off the right to reside in BC” …monies from the outside being brought in by real estate purchases and related consumption. “But this is living in a fool’s paradise,” according to Wright, “as it’s not sustainable”. It’s also where the forest industry has an opportunity to rebuild its social licence. “This is because the standard of living in a jurisdiction comes from the wages and net government revenue that its tradeable goods and services sector can afford to pay. …In BC, forestry represents 18% of this base.”

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The Truck Loggers Association’s View on Modernizing BC’s Forest Policy

By Bob Brash, executive director
The Truck Loggers Association’s Virtual Conference
January 14, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Bob Brash

The TLA firmly believes there are progressive solutions out there, that enable the unique and world class skills of our workforce, that won’t put 20,000 people out of work, decimate businesses and harm communities. …Government has the responsibility for setting broad goals and objectives, however, successful implementation lies in collaboration with those in the business, who know what will work and what will fail. Towards that objective, the TLA will work with others in the sector—vigorously, purposefully and collaboratively—towards seeking those solutions over the next few months. This will mean finding the common ground that the majority of British Columbians can endorse as a reasonable path to success. This will also mean, not challenging the government’s broad objectives but rather finding the means within those goal posts to move the sector forward.

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Solutions for BC’s Old Growth and the Working Forest

By Kelly McCloskey, Editor
The Tree Frog Forestry News
January 14, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Kicking off Day 2 of the TLA’s panels on the BC government’s efforts to modernize forest policy was David Muter, ADM, Resource Stewardship Division, BC Ministry of Forests. …According to Muter, “putting a temporary pause in place on priority old growth areas provides the time and space to better understand what old growth we have left and how best to manage it.” Although the Technical Committee operated independent of government, Muter noted that “Ministry experts worked closely with the committee so as to understand the basis of their technical work and its credibility.” With respect to how the government’s commitment to First Nations is progressing, Muter said that, “some Nations feel confident in their current management regime (usually because of their deep partnerships with industry) and said they may not need deferrals. Some Nations said they need more time and others see the need for deferrals and want to proceed.”

Next up was Gary Merkel, co-chair of the Old Growth Review Panel, who spoke to his and Al Gorley’s work preparing the strategic review on old growth. …According to Merkel, “there was an incredible amount of alignment from all sectors on the idea that we need to change the system. Managing for timber subject-to-constraints is a model that isn’t working for anybody. And many of the recommendations in our report recognize that society is undergoing a paradigm shift, and public policy related to forest management will need to adapt according.” …In closing, Merkel said, “this is transformative change that requires a paradigm shift in how we think about our forests. It will take time and the transition period is the hard part, but the end result is a very positive future for all of us. Importantly, it requires all of us working together, not a top down effort.”

Jim Girvan, principal at MDT Management Decision Technology, chose not to focus on the government’s decision to defer old growth, but rather—in the event that the deferrals become permanent—would identify some of the winners and losers. His list of losers included:

  • BC Forest Industry –14 mill closures, two of which have already happened
  • Carbon Sequestration – young forests have a higher net carbon capture rate
  • Value added – impacted by the loss of fibre and the primaries who supply it
  • Rural Communities – 18,000 jobs lost, often the main or only employer in town
  • Public Funds – $288 million lost annually, equates to 3,800 elementary teachers
  • First Nations – reduced opportunity to participate in the sector

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Perspectives on Modernizing Forest Policy in BC

By Kelly McCloskey, Editor
The Tree Frog Forestry News
January 13, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Bob Brash, Charlene Higgins, Susan Yurkovich and Melissa Sanderson

Delving deeper into the merits of the specifics, was the second TLA session on perspectives related to Modernizing Forest Policy in BC. Melissa Sanderson, ADM, Forest Policy and Indigenous Relations, BC Ministry of Forests, described the government’s vision and context—which is that the current policy framework is inadequate to address today’s challenges. According to Sanderson, the Intentions Paper was “greatly informed by engagements that have taken place in the past, notwithstanding the challenge of overlapping crises [covid, fires and floods], and that the engagement will be ongoing”.

Charlene Higgins, CEO of the BC First Nations Forestry Council, described what she’s been hearing from First Nations related to the modernization policies as “one of frustration… and that frustration is growing”. According to Higgins, this is because the polices were developed with no First Nations involvement. …Given government’s alignment with many of the First Nations Forestry Strategy goals, Higgins called the effort a “missed opportunity”. As such, she is seeking a full reset on the engagement process. Higgins concluded by saying, “the public wants a different approach to the use of BC’s forests, with real collaboration with First Nations regarding the use and management of forest land and resources.” And “First Nations involvement in the sector as full partners is the new paradigm that will create the climate for investment needed to support a thriving forest sector.”

Susan Yurkovich, President and CEO of the BC Council of Forest Industries, noted “the importance of this conversation because of  breadth and depth the industry has on the economic and social fabric of the province.” From industry’s perspective, the modernization of BC’s forest policy must start with a fact-based, balanced, and inclusive approach (agreed set of facts and then look at balancing the values); an inclusive group of people (meaning everyone is at the table); have Indigenous Nations as full partners (a say and meaningful revenue sharing); and champion BC’s low-carbon forest products as part of the climate solution.”

“But”, says Yurkovich, “predictable access to fibre at a reasonable cost is the key for all participants, regardless of size. …We need policy choices that are going to create predictability to encourage innovation and reinvestment.” …”There are a lot of challenges but also a lot of opportunities. BC has great people, great fibre, and the expertise, knowhow and technology to capitalize on the opportunity to be the preferred supplier of low-carbon, sustainable management forest products that will fight climate change. But we have to get it right, and we can’t get it right if we aren’t all working together.”

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Much-Needed Dialogue to Move BC’s Forest Sector Forward

By Kelly McCloskey, Editor
The Tree Frog Forestry News
January 13, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Spurred by recent and significant policy directions and actions by government, the Truck Loggers Association is hosting a series of panels to initiate meaningful collaboration and clarity on the “real impacts of these decisions and the best options to move forward,” said Bob Brash, Executive Director of the TLA. Introduced by TLA President Bill Nelson and moderated by Brash, the first session focused on BC’s markets and investment climate.

Russ Taylor, of Russ Taylor Global, opened with an overview of market trends, concluding that “very favourable prices are expected in 2022 [forecast by Taylor is $700 /Mbf] and into 2023.” Speaking to several of the government’s policy changes, Taylor emphasized the circular nature of the sector and thus the need for a healthy primary logging and lumber industry to provide lumber inputs to value-added businesses, particularly old-growth lumber.  Based on his observations over three decades, Taylor says the value-added strategy is “likely flawed”. “The risks are particularly high for start-ups and under-capitalized firms and the old-growth reductions will mean there is less of the most important fibre to work with, and more competition for what’s left.”

Next up was RBC analyst Paul Quinn, who titled his talk, BC – What Went Wrong and What Needs to Happen Now. As for what went wrong, Quinn says it’s “those policy changes that add even more costs to BC’s new status as North America’s high cost producer”. In effect, Quinn described the government’s efforts to modernize the forest sector as “the problem”. “Capital and investment are risk adverse and money flows away from uncertainty or it requires a premium return to offset the increased risk”, according to Quinn. “Unfortunately, the BC industry is producing below average returns while demonstrating a high and rising risk profile. BC has moved from the lowest cost jurisdiction in North America in 2010 to the highest cost in 2021, and recent policy changes will exacerbate the situation. Simply put, BC is becoming uninvestable”.

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Can anyone remember a more tumultuous time in BC forestry?

By Bob Brash, RPF, Truck Loggers Association executive director
The Truck LoggerBC Magazine
January 6, 2022
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Can anyone remember a more tumultuous time in BC forestry? Changes are afoot but the question is whether these changes are built on the solid foundation needed for success. The truth is, probably not. Let’s start with the old-growth issue and government’s decisions to “start” deferring substantial areas from harvest forever. …The truth is, BC has world leading levels of outright protection of land and forests, truly sustainable harvesting, stringent regulatory requirements, and the highest proportion of independently certified forests in the world. …The truth is about 30 per cent of BC’s old-growth forests can grow the “big” trees most of the public associates with their definition of old growth. …The truth is, BC’s value-added sector heavily depends on continued old-growth harvesting.

 The truth is, the government’s truths and objectives are becoming increasingly difficult to decipher. Recent and significant legislative and regulatory changes have been rammed through with negative impacts that will move the sector backward. …The truth is, real engagement and consultation are non-existent and broad decisions to effectively reduce the annual harvest by at least 10 per cent (and likely far more) have been made, incomprehensively, putting up to 20,000 people out of work without any real parallel social and economic analysis. Concrete compensation and transition plans do not exist. And that’s the short list. The far more unfortunate truth is that all of this was avoidable through real engagement with the forestry sector towards a collective strategy and not capitulation to special interest groups.

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A healthy commodity industry is a prerequisite to a growing value added sector: Taylor

By Russ Taylor, President, Russ Taylor Global
Russ Taylor Global
December 9, 2021
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Many new and substantive forest policy changes in British Columbia have just been announced by government. …One disruptive change is an announced policy to defer timber harvesting in 2.6 million hectares of old growth forests. …The second involves an involuntary redistribution of long-term forest tenures. …These two policy announcements will collectively be a significant impact to the industry with a potential loss of between 10,000 to 12,000 jobs (my loose estimate). …It is my opinion that the BC government’s new forest sector strategies have flaws. They do not seem to be based on science, socio-economics or even good forest data, as the proposed policies show a lack of process and understanding about how the existing forest industry really works.

…A healthy commodity industry is still a prerequisite to allowing success to slowly build in other small or specialty businesses over time. By flipping a switch to reduce the forest tenures for established mills with the hope that unproven and under-capitalized smaller sawmills and value-added businesses can grow is a high-risk strategy. …Even before all these announced policy initiatives, the government can also be credited for allowing BC to be positioned as one of the highest cost commodity lumber producing regions in the world, tied to an ill-designed stumpage formula. Social engineering of the forest industry by the government never really works since you need to have the confidence of investors. Quickly devised social programs that benefit one part of an industry and the expense of another will cause investors to flee. 

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A Flood Of Forest Policy Changes in BC

By David Elstone, RPF, Managing Director
The Spar Tree Group
November 26, 2021
Category: Opinion / EdiTOADial
Region: Canada, Canada West

The BC forest sector is being overwhelmed by a series of major changes to forest policy. …In the span of less than 30 days, the NDP government has made six announcements that will massively reshape the sector. Taken individually, some of these changes notionally are not necessarily bad ideas. …Unfortunately, delivering these changes as a package all at once will be very problematic. …Primary manufacturers are a strategic component to the rest of the industry, and if they shut down there will be huge holes that will not be filled for years, or maybe never. While rebalancing the sector as a concept has its positives… the series of major policy changes has cast a pale of toxicity onto the industry. It has reaffirmed institutional investors’ view of BC under the NDP as un- investable. Boards of the major companies are now likely directing their operations to reduce unnecessary expenditures and cancel any upgrades. Already, and sadly, contractors are seeing their amount of work diminish.

The Bill 28, Forest Amendment Act is the NDP government’s legislative reform of the Forest Act. Bill 28 provides the Crown mechanisms for making old growth deferrals, implementing tenure redistribution, major revisions to the compensation process for lost harvesting rights, new requirements for forest inventories which will be necessary to support compensation, and a few other issues. Collectively, these are not minor changes and will reshape the forest sector. …The cloud of uncertainty is not going to clear in a few months or even a few years. Without understanding the goal posts of these tenure redistribution reforms, it is hard to draw conclusions, other than there is a potential for a real big mess and a much smaller industry.

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Catastrophic Floods in BC Drive Lumber Prices Higher

By Russ Taylor and Paul Quinn
Russ Taylor Global and RBC Capital Markets
November 22, 2021
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Russ Taylor

Paul Quinn

Per Russ Taylor: A super rain and windstorm, the so-called “atmospheric river” hit BC and Washington State with catastrophic results last weekend. Main roads and bridges that are integral to the infrastructure throughout BC were breached, including on all major highways and rail lines. …Full details in pictures and videos can be found in the excellent summary prepared by the Washington Post. …The reality from the storm is that business and logistics operations will not be back to even close to normal levels until well into December and perhaps not until after the New Year. This will mean that the lumber supply from BC, and to some degree from Washington State, will be reduced as supply chains remain in disarray. With the Port of Vancouver currently cut off from road and rail service, lumber export deliveries to the port could be limited as the priority should shift to moving more critical cargos through the port – that may not include lumber, so it will need to be redirected into North America.

Per Paul Quinn:

  • The impact from BC and Washington State is that lumber supply could be reduced for an extended period.
  • The service disruption sets up for a challenging winter transportation season.
  • Even prior to the flooding, the lack of containers was a material constraint on export volumes.
  • The increase in US softwood duties are a weak reason to increase prices, but buyers are more likely to pay higher prices if mills ask for it
  • This leaves risk firmly skewed to the upside heading into 2022.
  • Traders are mostly seeing a tighter supply scenario resulting and believe that the price risk is skewed to the upside.

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Best science and data not used to develop old growth deferrals

By David Elstone, RPF, Managing Director
The Spar Tree Group
November 12, 2021
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Last week, the BC government announced intentions to defer timber harvesting for 2.6 million hectares of BC’s old growth forests. …Estimates for job losses range from 4,500 to 18,000 jobs. Given there is so some much at stake I would expect Premier Horgan and Minister Conroy to have gone above and beyond to ensure the deferrals announced, along with the science and data behind them was rock solid. …They owed those who would lose their jobs respect and confidence in the decisions given the workers would be paying the price. To my great dismay, I do not see respect or confidence and here is why. …Forsite Consultants recently found that 3.3 million hectares or 29.3% of old growth forests were on sites capable of producing large trees – a sharp contrast to the less than previous 3% estimate. …When the results of the Last Stand report, Forsite and TAP’s Priority Deferrals are compared, I do not see “the same results.”

One of the most absolutely astounding parts about the deferral announcement was the 30-day request to First Nations to indicate support for these deferrals, or not. …[Further] is the misleading nature of the 2.6 million hectares.  As pointed out, the maps show deferrals within protected areas, so those areas are not part of the 2.6 million hectares but we have no way of telling what is. …This is not a transparent or open process and appears designed to confuse (or worse, made up literally in the moment). …First Nations deserve better.  Workers and business owners of the BC forest sector deserve better. We all deserve better. Halt this process, be transparent and get it right – not for the Sierra Club, not for votes, but for the people of this province.

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We’ve tried Ms. King’s solution of forest non-management. It hasn’t worked.

By Nick Smith
Healthy Forests, Healthy Communities
August 25, 2022
Category: Opinion / EdiTOADial
Region: United States

Singer Carole King leveraged her celebrity status to publish an oped in the New York Times on Aug. 25, calling for an end to commercial timber harvests on federal lands. It’s unclear what makes her an expert on forestry, other than the fact she lives luxuriously in Idaho, in a house made of wood, with a national forest as her “nearest neighbor.” She continues to promote the “Northern Rockies Ecosystem Protection Act” that prohibits forest management on 23 million acres of federal forests in Idaho, Montana, Washington, Oregon and Wyoming, despite a tragic epidemic of dead trees, wildfires, insects and disease on these public lands.

…King shares the rigid, anti-forestry and anti-people ideology that we do not belong in the forests at all. This ideology peddles an apocalyptic fear that our country is logging its last remaining forests, even though we have more trees than we did 100 years ago. …King prefers we switch to more energy-intensive building materials, or that we outsource our wood products to places like Russia and other countries that don’t share our commitment to sustainability, science or advanced forest practices. Ending commercial logging on national forests would come at a heavy cost to Americans. We’ve tried Ms. King’s solution of forest non-management. It hasn’t worked. 

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US Forest Service Offers Sound Plan for Confronting Wildfire Crisis. Can it Succeed?

By Steve Wilent, Editor
Natural Resources Management Today
February 1, 2022
Category: Opinion / EdiTOADial
Region: United States

Steve Wilent

Although the story may have been overshadowed by news of the surge of the omicron variant of Covid 19 and Russia’s positioning of an army just across the border with Ukraine, the US Forest Service, along with its parent agency, the USDA, announced in January a bold plan for “Confronting the Wildfire Crisis” in the US. Subtitle: “A Strategy for Protecting Communities and Improving Resilience in America’s Forests.” The press release announcing the strategy… said nearly $3 billion would be available via the Infrastructure Investment and Jobs Act of 2021. …Now, $3 billion may sound like a lot of money, but consider that the Forest Service alone spent an average of nearly $2 billion per year on fire suppression from 2016 to 2020. 

Focusing on the firesheds where wildfires pose the greatest risk to people, property, and resources is a smart strategy and will make sense to the general public. This clarity will be especially important when anti-forest-management groups raise objections and lawsuits, some of which will likely claim that fuels and forest health treatments are massive industrial logging projects in disguise. …Even if additional funding is forthcoming, will the Forest Service be able to beef up its staff? And to support treatment of up to an additional 30 million acres of lands? And managing the contracts and contractors needed to perform the work? …And find enough buyers for the logs and fuels to be removed? …Aside from questions about funding, staffing, and contracting, the Forest Service’s strategy for confronting the wildfire crisis is a sound one. …Delay, especially through a lack of funding from Congress, will only intensify the crisis.

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The Land Everybody Ought to Know: US Bureau of Land Management Turns 75

By Steve Wilent, Editor
Natural Resource Management Today
January 7, 2022
Category: Opinion / EdiTOADial
Region: United States

Steve Wilent

When it comes to managing land and natural resources in the US, no agency, company, or organization manages as large an area the US Bureau of Land Management (BLM). The only entity that comes close to the BLM’s 245 million acres—roughly one-tenth of America’s land base—is the US Forest Service, which is responsible for 193 million acres. Much of the land BLM manages were once thought of as “the lands that nobody wanted.” Few would say so today. In 2021, BLM celebrated its first 75 years as a federal agency; it is a branch of the Department of the Interior. BLM was created in 1946 when the Truman administration merged the General Land Office and the Grazing Service.

To learn more about the BLM’s first 75 years, I talked with Ed Shepard, former president of the Public Lands Foundation (PLF) …and James R. Skillen, an associate professor of environmental studies at Calvin University, in Grand Rapids, Michigan. …“When BLM was created in 1946, it basically took over responsibility for millions of acres, but at that time there was really no framework for managing that land… [until] Congress passed the FLPMA in 1976. …After keystone federal laws were passed during the 1970s, the US Forest Service was often embroiled in controversies and lawsuits over timber harvesting and other issues. For the most part, the BLM remained out of the spotlight. …Eventually the controversies over the northern spotted owl and old growth …began spilling over onto the BLM. Said Skillen: “I think one of the biggest challenges for much of BLM’s history is that, unlike the other three [main natural resources] agencies, BLM has never had a powerful, supportive constituency”. 

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All I want for Christmas… what’s left to buy?

By Paul Quinn, RBC Equity Analyst
RBC Capital Markets
December 21, 2021
Category: Opinion / EdiTOADial

Paul Quinn

It has been a record year for Lumber merger and acquisition (M&A) activity, with >$2.2 billion of transactions during 2021 alone (more than the prior five years combined). …Why more consolidation? We think the consolidation will make Lumber a more attractive business over time. In OSB markets, we have slowly seen increased consolidation result in higher average margins and a more rapid industry response to periods of low OSB prices. While it has taken longer to consolidate the lumber industry, we expect that West Fraser, Canfor, Interfor, and Weyerhaeuser will continue to play a key role in making the lumber business more attractive (although the last two years have left little to complain about).

For lumber producers, we think that geographic diversification is top of mind given that changing political and natural environments can negatively impact operations. Of the major producing regions, we view the US South as the most attractive region for growth followed by Alberta, the Pacific Northwest, and Eastern Canada. For producers with operations in British Columbia, the urgency to diversify production outside the high-risk province will be greater. We think that Canfor and potentially West Fraser could look to further diversify lumber production by expanding in Europe. Finally…What’s left to buy?

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