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Coastal Clarion - Newsletter
Vol.6, Issue 3 · Fall 2010
As the controversy continues to rage about the implementation of the harmonized sales tax in British Columbia and the proposed referendum, the Smart Tax Alliance is rallying to raise awareness about the economic benefits of the tax. Coast Forest Products Association is one of the members of the 30 B.C. business and industry groups in the Alliance, formed to support the job-creating benefits of the HST.
We understand the frustration among voters at the initial lack of dialogue over the implementation of this tax, and that's why Coast Forest will be involved with the HST referendum. It creates an opportunity to continue this important dialogue and educate British Columbians about how this tax will positively impact our province.
During tough economic times, like the ones the coastal forest industry has been experiencing over the last decade, we've seen mills shut down and employees' lives thrown into turmoil. As a major industry, the coastal forest sector provides 12,000 jobs for coastal communities and is a key driver of the provincial economy.
With the introduction of the HST, B.C.'s resource and manufacturing sectors are expected to benefit significantly. The coastal forest sector alone will get a $50 million boost, which will significantly cushion the blow Coast Forest member companies felt in 2009 when they lost $129 million. In addition, the removal of the PST makes the playing field more level with our competitors around the world, which are not subject to this taxation. We need to create understanding with our employees and their families that the HST will assist the forest sector to invest in new products and markets, required to maintain jobs during a poor economy while preparing for the future.
Adoption of the HST will result in B.C.'s taxes on business investment being lower. This means coastal communities will be an attractive place for investment, which in turn helps creates long-term, stable and well-paying jobs. Washington Marine Group has already felt the positive impact of the HST. Because of the tax savings, the company invested in four new tugboats instead of the previously budgeted for three, which also puts an additional crew to work.
As B.C.'s economic forecast continues to be uncertain, we need to do everything in our power to create stability. The HST will make B.C. one of the most competitive jurisdictions in Canada for business investment dollars. Without it, there will be certainty for sure: certainty that investors will continue to turn their backs on B.C.'s forest industry. As employers, our forest companies stand by the HST.
GUEST COLUMN VALUE OF FOREST CERTIFICATION IN GLOBAL MARKETS
Photo: SFI, Inc.
By Kathy Abusow, President and CEO Sustainable Forestry Initiative, Inc.
Responsible environmental behaviour is at the top of most corporate agendas these days, and customers want to know products meet their high environmental standards. That's why third-party forest certification is rapidly becoming an important element of responsible paper and wood sourcing around the world.
As forest products companies you deal with global markets, so you can appreciate the value of a program that tells buyers that products are from responsible and legal sources, backed by a rigorous, independent audit. (Continued)
15TH ANNUAL SFI CONFERENCE HIGHLIGHTS: THE POWER OF PARTNERSHIPS
Photos: SFI, Inc.
GUEST COLUMN (CONT'D) At a time when just 10 per cent of the world's forests are certified, British Columbia is a world leader with over 50 million hectares of certified lands. The independent Sustainable Forestry Initiative® (SFI®) program manages the largest single forest certification standard in the world - and more than a quarter of SFI forest certifications are in British Columbia.
In September, Coast Forest's Rick Jeffery moderated SFI's annual conference, which was held in Vancouver, B.C. The conference brought together forestry professionals from across North America, with speakers spanning the globe. The conference theme, The Power of Partnerships, highlighted the importance of third-party forest certification and chain-of-custody in the global supply chain.
Most green building rating systems encourage the use of wood by recognizing all credible certification standards such as SFI - including two ANSI-approved standards in the United States, Built Green Canada, Green Globes, CASBEE in Japan, Green Star Program in Australia and BREEAM in the UK.
CHAIN-OF-CUSTODY CERTIFICATION Global markets want suppliers to deliver responsibly sourced products - they want proof to back the claim. This is why we are seeing phenomenal growth in chain-of-custody certification.
At the start of 2009, the SFI program had 400 chain-of-custody certifications - today we are approaching 1,000 certificates, many of them multi-site certificates, covering more than 2,200 locations. They include printers, paper merchants, wood dealers and wholesalers. They often seek more than one chain of custody so they can offer customers more choice and are more likely to find products at the best price.
Chain-of-custody certification allows forest managers to earn credit in the market- place for their hard work in meeting the rigorous requirements of a forest management standard like SFI.
British Columbia is a leader in forest certification - and there is growing demand for certified products from retailers and producers alike. Chain-of-custody certification follows products from a certified forest through production and manufacturing to the end product, enhancing the market value of certification and potentially assisting in meeting international regulatory requirements (see article below).
SFI chain-of-custody certification identifies how much of a product comes from certified lands, how much contains post-consumer recycled content, and how much is non-certified/non-controversial forest content. Our on-product label can be used to identify fibre certified to any standard in North America endorsed by PEFC (including CSA) as long as there is a valid SFI or PEFC chain-of-custody certificate.
SFI offers strong forest and chain-of-custody certifications, so companies can meet the needs of customers across North America and beyond. Our partnerships with community organizations and companies of all sizes, government agencies, conservation groups, Aboriginal people, customers and family forest owners ensure our reach - and yours - extends from the forest, to communities and the marketplace.
CANADA-EUROPEAN UNION TRADE In May 2009 Canada and the European Union launched negotiations for a Comprehensive Economic and Trade Agreement. Since then, Canadian officials have been in regular contact with their EU counterparts to finalize this agreement. As part of this agreement, the coastal forest industry has been working with government on the EU Illegal Timber Regulation, which will go through its third reading in October and will likely pass into Law at that time.
Because the Government of B.C. and our forest sector take stringent steps to assure that forest products from British Columbia are sourced from legal and sustainable operations, our aim is to ensure that only legal and sustainable timber is imported into the EU, and to continue to raise global standards for forest management.
With B.C.'s stringent regulatory framework, in combination with our rigorous compliance and enforcement system, and third-party forest certification, customers can be assured that all products sourced from our province have been harvested legally. Studies have shown that illegal logging in Canada is, for practical considerations, non-existent. For these reasons documentation that simply says Product of Canada should be sufficient for our forest products to meet the requirements of the EU Illegal Logging Regulation, and this should be imbedded in the EU-Canada trade agreement.
PROFESSIONAL RELIANCE AT WORK The implementation of the Forest and Range Practices Act (FRPA) and regulations in 2004 was a major shift in the approach to regulating forest management in B.C. The Ministry of Forests and Range (MoFR), the Ministry of Environment (MOE) and the forest industry developed its results-based model with a focus on achieving on-the-ground results, rather than process, relying on profes- sional skills and professional accountability. The FRPA was designed to better deliver a balance of environmental and economic benefits across the province for 11 broad values, not one at the exclusion or expense of the other, " explains Bob Craven, Interfor's Manager of Forest Operations.
The move to the FRPA was an indication that the regulation of forest practices had matured sufficiently to rely on the performance of professionals, delivering desired outcomes instead of constraining professionals to specific processes regardless of the end result. It was also recognition by government that under the Forest Practices Code highly prescriptive regulatory framework forest practices were being carried out because they were required not because they were necessary; there was significant duplication of roles and mandates within ministries; the prescriptive regulation was ambiguous on expected outcomes; and there were unintended conflicts with third-party certification standards.
CREATING UNITY Government recognized the need to place more reliance on the judgment and advice of professionals because internal and external operating environ- ments, including the resource, the industry and the workforce, were continually chang- ing and the status quo for managing the change was not an option. Considering the province's economic situation and the reduction in financial and people resources it was clear ministries across government would need to follow industry's lead and would have to "do more with less" to achieve their objectives. That is, there was an immediate need to simplify and streamline business processes and practices, seek efficiencies in resource ministry activities and operations, and coordinate service delivery between the natural resource ministries.
The ministry continues to follow through on the implementation of government's results-based legislation under the FRPA. In the recent ministry restructuring, Minister Bell appears to be supportive of expanding professional reliance to other business areas of his ministry. Unfortunately, the MOE, one of the original architects of the FRPA, does not exhibit the same level of support or confidence in the professional reliance model. It appears to be entrenched in a prescriptive approach and the belief that the establish- ment of legal orders with detailed measures to comply with is the only means to manage environmental values.
"When government embarks on a policy shift, all involved resource ministries should be fully supportive," comments Coast Forest's Rick Jeffery. "After all, it's one government - and all ministries should be on board." (Continued)
Over the summer months and into the fall, Coast Forest's Rick Jeffery visited municipalities from Campbell River to Surrey to talk about the future of B.C.'s coastal forest industry. This month, he visited the Municipality of North Cowichan and spoke to its economic development committee about what local government could do to grow markets and increase demand for coastal forest products and business opportunities for their community.
His suggestions included sending a representative from North Cowichan on Forest Minister Pat Bell's upcoming mission to China; improving infrastructure at North Cowichan's valuable deep sea ports, which the industry needs to transport its products; supporting a push for provincial or federal research; developing tax credits for forest companies; and helping debunk a series of myths about the coastal forest industry.
Lexis Bainas of The Citizen [Oct. 6] wrote, "North Cowichan, the owner of a municipal forest, has fibre to sell, too, so the committee was interested in a market outlook."
Jeffery didn't candy coat his forecast: "It's still really grim out there. Foreclosures in the U.S. may have peaked but there are still a couple of rough years ahead before there's any hope of real improvement."
But he added, despite myths to the contrary, old-growth is not in short supply and continues to provide stability while new directions are pursued in both product and market development. Through the next decade's transition to second growth, the good news for all of us is with the most stringent forest management practices in the world, old growth is protected and will continue to be protected into the future.
2011 is the International Year of Forestry, so Jeffery urged North Cowichan to get out there and sell the idea of a vibrant forest industry. There's plenty every municipality can do to help B.C.'s coastal forest industry and create successful business opportunities.
LETTER TO THE EDITOR from Coast Forest's Rick Jeffery in response to Reese Halter's OpEd in The Vancouver Sun, September 16, 2010
Re: The Real value of B.C.'s old-growth forests
He also pointed out that if the PST was reinstated, it would be retroactive to June 30, 2010, which means anybody who purchased goods for their business since then would have to pay an extra seven per cent in owed PST, a tax first designed and implemented back in 1949.
Let me correct just a few of the errors in Reese Halter's opinion. Halter claims there is not much old-growth forest left. In fact, there are 3.5 million hectares of old growth protected in coastal B.C. This compares with just 2.5 million hectares available for forestry.
Our forest management laws require that we conserve significant areas of old growth within this working forest to protect wildlife, fish, tourism and other environ- mental values, including carbon sequestration. This province has the most stringent forest practices and compliance system in the world.
The world's most carbon friendly energy efficient building material is wood. When a tree is harvested, the forest products produced continue to store carbon for many years. New trees are planted and are more efficient at capturing atmospheric CO2.
Old-growth forests are made into high value specialty products while second growth produces lower value commodity products. We need a mix of both to support workers, families, communities and government revenues.
Sadly, Mr. Halter presents an "either or" argument for carbon offsets. We are blessed with both old-growth and second-growth forests that can optimize carbon offset opportunities while providing energy efficient building materials and sustainable jobs.
B.C.'s forests are the envy of the world, and we should be proud and celebrate our world class forest management.
(CONT'D, MEASURING OUTCOMES) Jeffery points out that one of the key attributes of a professional reliance model is the ability to assess whether the desired results are being achieved. Forest Practices Board and third-party certification audits all point to good to excellent results on the ground: professionals are delivering outcomes consistent with the public interest on the identified environmental values.
On the Central and North Coasts, the professional reliance model supporting the FRPA is clearly working, despite the Ministry of Environment's reticence to this approach. Professional foresters and biologists are planning for old-growth representation in conjunction with important wildlife habitat and other values within the Strategic Landscape Reserve Design process. In pilot landscape unit plans completed by industry professionals and assessed by independent quality assurance experts, the results indicate the reservation of Class 1 and 2 marbled murrelet habitat is very good. "Known Class 1 and 2 grizzly bear habitat is essentially all included in reserve and tailed frog habitat representation is excellent," observes John Deal, Western Forest Products' Strategic Planning Biologist.
The judgment and advice of professionals in medicine, legal issues, accounting, and teaching - to name a few professions - has been relied on by the public of B.C. for generations. Government and the forest industry have relied on the advice of resource professionals in undertaking most aspects of forest management. Now that government has formalized the shift to a professional reliance model for forest management it is incumbent on all our resource ministries to work under the results-based legislative framework and allow resource professionals to demonstrate their ability to deliver on identified outcomes.
WE APOLOGIZE FOR OUR ERROR
Coast Forest represents forest and paper companies in coastal British Columbia engaged in the harvesting and manufacturing of primary and added value forest products, and pulp and paper products. Together, these companies manufacture 95% of the lumber produced on the coast, 70% of the pulp and paper production and are responsible for 70% of the total harvest. The Association works to ensure that the five coastal species and their product lines have fair access to the global marketplace. Committed to providing leadership to create a thriving forest industry, Coast Forest facilitates cooperation between stakeholders and government on behalf of its member companies.