Saturday, July 14, 2012

D O Gorman's presentation to the Special Committee on Timber Supply

This presentations to the Special Committee on Timber Supply by Dennis O Gorman differs in that it starts to think outside the box of BC's present forest tenure system:

D. O'Gorman: Good morning. Mr. Chairman, thank you very much, and thank you to the members for this opportunity to speak to you.
I've endeavoured to follow the commentary, and I say that as a non-forester but somebody who is familiar with the resource scene, having worked for the provincial government for 29 years in times past. I've followed the work of Dean Innes, of COFI, of the Association of B.C. Professional Foresters, the Auditor General, the Forest Practices Board and informed writers like Les Leyne and Ben Parfitt, and all of these have presented ideas supporting the search for solutions, which I know is your principal task.
From an outside perspective, which I profess I'm principally speaking to, the foremost issue, of course, is the timber supply shortage related to depletions because of mountain pine beetle and other impacts. The sad reality, I think, is that — given the analyses being done by Dr. Hebda at the Provincial Museum and so on — this is likely to be an enduring risk because of the ongoing impacts of climate change. And there is a task within the ministry, as you know, on future ecosystems.
Related to this, however, there's a serious mill overcapacity issue, in part linked to the accelerated harvesting in recent years, for all good reasons. Added to that are the issues of declining markets and low prices and, with that, the social concerns of the affected communities — the job declines, the impacts on community stability, the industry's own concern about personnel and recruitment, and the long-standing issue of wood access, particularly given log exports and evidence that B.C. wood is being remanufactured and, I think, having value added elsewhere. On top of that, finally, there are the management issues of just the stretched capacities around reliable inventories, forecasting methods and oversight.
The conclusion is, broadly, that if there was ever an age of innocence in forestry, it's over. And despite the efforts — and very inventive ones and thoughtful ones — of reprofiling and reallocating, this does not appear to offer any long-term wood supply solutions.
Mr. Chair, your committee, in the background materials, asked what values and principles might apply. Values, I think, would begin with the accepting of the inherent complexity and the uncertainties, and with that goes the value of adaptiveness. The principles, therefore, would lead to building resilience, largely by growing quality wood; increasing diversity, both in terms of how it's supplied and the products produced from it; value generation in growing it on the stump, capturing it through an improved stumpage system, and creating additional values in the marketplace.

Sustainability is an obvious one, given the importance of non-timber values generation, growing it on the stump, capturing it through an improved stumpage system, and creating additional values in the marketplace.
Sustainability is an obvious one, given the importance of non-timber values. Supporting communities is an obvious important principle. Finally, I think the one of learning from the competition. I think these are all, in the words of your committee's mandate, the keys to orderly transition efforts.
Before advancing my thoughts on what might be possible, a few comments on the adjustment options that were outlined. Accelerating the availability of timber supply simply, I think, is an option that means borrowing against the future. Increasing the harvest of marginal timber is essentially a direct subsidy and risks indirect costs and subsidies because of disturbance regeneration issues, because these forests are marginal for a reason.
Logging in constrained areas — I heard a previous speaker — would certainly go to undermining the all-values-are-considered ethic that's been very much part of the forest sector and the ministry. Of course, that invites objections on trade fronts, certification fronts and risks, frankly, reigniting wars in the woods, which were challenging.
Intensive forest management is identified as an option, with two sub-options: fertilizing and advanced silviculture. Yes to advanced silviculture. Fertilization, I think, has some inherent issues. Certainly, it accelerates the growth in the short term, but it risks producing fast-growing but weak low-grade wood. So I think that's an alternative that would have to be looked at very seriously.
The shift to area-based tenures and associated intensive forest management. That begs the question: what kind of tenure will best deliver intensive management? A starting point might be to ask if the large tenures we've had up to date have actually delivered that. Have they maximized jobs, maximized value recovery and delivered community stability?
We know that many notable companies — the MacMillan Bloedels, the Crown Zellerbachs, the Rayoniers and so on — have come and gone, and so too has the stability of many communities — again, for many good economic reasons and changing technology. The overarching question is simply: which forms of area-based tenure are most promising, especially in terms of delivering intensive forest management?
My conclusions on the way forward are three. Diversify by establishing more community-level area-based tenures. This includes woodlots, community tree farm licences and other similar licences.
The precedents certainly exist. There are over 500 woodlots in the province at the present time. As I understand, all are 400 hectares or more. There is the positive experience of the Revelstoke tree farm licence — and from an earlier era, the Mission tree farm licence.
What are the benefits of this? Connections to the land, connections to the communities, and maintaining local job opportunities.
Of course there are questions of these. What are the costs of establishing them? Where would they be located? How big should they be and how varied? Some of the material I read…. As you move north, you might have to move into 1,500- or 2,000-hectare units.
How to protect the non-timber values and including public access in these new terms. Finally, and importantly, how to assess results, because there may be sub-variations on that, which would include going against the long doctrine of not having a private forest land — or expanding it. There are some issues, as we know, from even tenures that have built in private forest land when it is taken out, at some considerable cost to society.
Are there models? Well, one of our principal competitors, Sweden, probably gives a good example. As I understand, from the post-war situation, World War II, they had a very depleted forest situation and decided that their goal was to increase the growing stock.
From my understanding, not only has their value gone up — their jobs have gone up — but their standing stock has over the years. It is principally based on a forest land base that's about [inaudible recording] 50 percent privately owned. Obviously, tenures, woodlot arrangements and that, could replicate that.

So my recommendation is simply to review the Swedish experience for the transferrable aspects, especially their silvicultural systems, which I understand are based on long rotations and successive thinnings — and with it, the log-marketing arrangements, where they have come up with regional associations that have allowed some equity between the buyers and sellers in terms of actually creating an opportunity to capture value. And successive thinnings — and with it, the log-marketing arrangements, where they have come up with regional associations that have allowed some equity between the buyers and sellers in terms of actually creating an opportunity to capture value.
Secondly, creating one of these regional log markets. The benefits: wood access for new enterprises would be an obvious one, to address an earlier concern; recovery of value for both the government and producers; and knowledge, again related to the stumpage system, about prices and markets.
Questions? Absolutely. How many are required to be viable? Where would these markets be located? What would be the preferred models? All of those bear some research, but certainly the precedents exist, and the starting point is with the experience of the Lumby log sort and auction, which operated successfully in the 1990s, and even this small business forest enterprise program and B.C. Timber Sales, which I'm sure would give some transferrable experience.
Finally, government initiatives in terms of legislation in terms of the tenure modifications and inventiveness around what might be possible there: the policies which would detail the operating provisions; solid information support, as the Auditor General has pointed out; strategic planning and research, particularly on coordinated market intelligence to benefit both producers of wood and producers of product; ensuring a system of cost-recoverable loans is in place to support enterprise — that doesn't necessarily mean government money, but it means making sure that the lenders might be well positioned and knowledgeable — training opportunities in all segments, particularly advanced silviculture and advanced processing; finally, the importance, as the Auditor General's report has pointed out, of audits and the resulting adaptation.
No one I've ever spoken to, and particularly myself, has the answers here, but I think what you're doing is starting a conversation — and to have centres like the Wosk Centre for Dialogue used as an ongoing opportunity to have really intensive discussions among the people that are super knowledgeable, including the people at the universities, to kind of keep reinventing the future, because it's going to keep unfolding in ways that probably we can't predict ecologically and economically.
Thank you for the opportunity for these remarks, Mr. Chairman.

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