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Coastal Clarion - Newsletter
Vol.7, Issue 4 · Winter 2011
In broad strokes the strategic focus for the B.C. forest industry is a three-part strategy: diversifying into offshore markets, expanding product mix and uses to move up the value chain and capture emerging opportunities in these markets; focussing on increasing market share in non-residential and multi-residential markets, leveraging cost effectiveness, energy efficiency, green building and carbon management imperatives in this market segment; and exploring ways to capitalize on the bio-economy and the emergence of exciting new products, bringing them from the incubator to commercial realization.
Underlying this work is the everyday, ongoing effort to increase competitiveness, reduce costs and improve productivity. Policy work to ensure the necessary environment to attract the required capital and investment to execute our plans backstops the strategy.
I am no weatherman, but pretty much on a daily basis I’m amazed at how this policy work seems to be a ‘Groundhog Day’ rotation of issues and challenges. Fundamental things like forest practices, environmental regulation, market-driven timber pricing, tenure security and land use are on the list again and again in some shape or form.
The good news is we have a solid foundation for the strategy, which features a federal-provincial-industry market and product diversification partnership to grow our markets in Japan, China, Korea and potentially India. A product diversification piece to this work that is not as visible has resulted in new products like kilned-dried laminates in Japan, sound abatement fencing, grooved decking and engineered wood products like cross laminated timbers. Additionally, Wood First policies, Olympic speed skating ovals, 6-floor building codes and WoodWorks technical transfer programs are invaluable for gaining market share in the lucrative North American non-residential markets.
The World Economic Forum Global Competitiveness Report notes that improving the sophistication and innovation potential of Canada’s private sector with greater R&D spending would enhance Canada’s future competitiveness and productivity. For the forest industry tangible policy changes to achieve this goal include expansion of R&D tax credits to facilitate more R&D, accelerated equipment write-offs, and PST exemptions for equipment and technology purchases to reduce the risk of adopting new technologies. And in B.C. modernization of the PST/GST regime, with the goal of improving competitiveness and innovation, is required in the wake of the HST debacle.
Luckily for us, tomorrow does come and for the B.C. forest industry our tomorrows appear bright. However, Phil’s Groundhog Day forecast is also fitting: “Up in the Pacific Northwest, as you can see, they're gonna have some very, very tall trees.”
HELP FOR JAPAN
Photo: Government of B.C.
The B.C. Jobs and Trade Mission’s forestry delegation carried on from India to visit Japan and extend its support for the reconstruction efforts now underway, following the devastating 9.0 earthquake and tsunami that claimed approximately 13,000 lives.
“It was an opportunity for Ministers Oliver and Thomson, along with industry, to reach out,” emphasizes Coast Forest’s Rick Jeffery. "The Japanese people continue to show their resilience, practising Japanese efficiency, organization and stoicism in their reconstruction efforts. They know we are here to help with both their residential and non-residential building needs."
joint solutions project
The purpose of the Joint Solutions Project is to reduce conflict, collaborate to implement ecosystem-based management and constructively engage with other stakeholders involved in implementing the consensus land use agreements in place in the Great Bear Rainforest. Starting out as a unique effort between a group of forest products businesses and environmental groups interested in exploring ways to end market-based conflict over forests in the Great Bear Rainforest, the JSP generates new solutions to old conflicts.
The JSP is a collaboration between forest products producers and environmental groups focused on developing and implementing a model for conservation and management of globally significant coastal forests—a model that fully integrates social, economic and ecological factors. To achieve its objective, Coast Forest Conservation Initiative participants work with three environmental groups in the JSP.
JSP partners include BC Timber Sales, Catalyst Paper Corporation, Howe Sound Pulp & Paper, Interfor, Western Forest Products, Greenpeace, ForestEthics and Sierra Club B.C. For Information visit www.coastforestconservationinitiative.com
Implementing EBM on B.C.’s Central and North Coasts By Patrick Armstrong, President of Moresby Consulting Ltd.
In March 2009 the British Columbia government announced completion of a land use framework for the 64,000 square kilometre Central and North Coast region, known as the Great Bear Rainforest. The framework includes:
- Legal designation of a network of conservancies and protected areas, representing one-third of the areas ecosystems
- A legal framework to guide implementation of Ecosystem-Based Management, designed for the region in areas available for commercial forestry and other forms of development
- A commitment to fully implement EBM by 2014, with the objective of maintaining 70 per cent of forest ecosystems in a natural condition (low ecological risk) while achieving high degrees of social and economic wellbeing
- A formal government-to-government system of governance, engaging the provincial government and First Nations
- A commitment to learn EBM by doing, through a process known as adaptive management.
Forestry businesses operating in the region are partners in the implementation of EBM, working with First Nations, environmental organizations and the B.C. government. In 2010 five forestry businesses (BC Timber Sales, Catalyst Paper Corporation, Howe Sound Pulp & Paper, Interfor and Western Forest Products) decided to invest in an accelerated process to fully implement EBM. The decision included a commitment to work collaboratively with Greenpeace, ForestEthics and Sierra Club BC through the Joint Solutions Project to design the accelerated project and undertake the technical work required.
The project focuses on concurrently achieving low risk to ecosystems and a meaningful and sustainable contribution to social and economic wellbeing through the practice of commercial forestry. The 2009 EBM legal requirements set aside 50 per cent of the natural range of forest ecosystems (includes forests in protected areas as well as those held in hard and soft reserves); the full implementation of EBM requires that an additional 20 per cent needs to be identified and set aside. The project is seeking to find and distribute that additional forest required while maintaining a commercially viable wood flow in the range of 2.7 cubic metres per year.
The implementation of EBM has turned the practice of forestry in the rainforest inside out over the past several years. The loggers, professional foresters and planners tasked with implementing EBM have been on a voyage of discovery and adaptation.
The implementation of EBM has turned the practice of forestry in the rainforest inside out over the past several years. The loggers, professional foresters and planners tasked with implementing EBM have been on a voyage of discovery and adaptation. At a strategic scale there is adequate timber available for commercial forestry, but the question is: Can we get at the wood operationally and sustain a viable business? To answer the question, specialists have been using high-tech analysis to unpack and repackage data describing an area the size of Ireland, troubleshooting EBM rules and seeking solutions where problems arise. The process is one of adaptive management, an underpinning of EBM.
In the coming months the project’s technical work will be completed providing the basis for recommendations for achieving full implementation of EBM.
PILOT TO INFORM RESOURCE DECISION-MAKING PROCESS Coast Forest, working with the Ministry of Forests, Lands and Natural Resource Operations, is finalizing a “Gatekeeper” pilot project intended to deliver a standardized, transparent, impartial and informed approach to optimize natural resource and land-use decisions. The pilot framework for PIE [Public Interest Evaluation] has two key components:
- the establishment of a “what is” benchmark (what is already protected) for available Crown forest land base and
- more importantly, the process of informing resource land-use proposals on a go-forward basis (do we have enough yet?)
Competing demands for the land base continue to grow, so it is critical that land-use decisions be made in the context of existing, approved land-use plans and policy, and be designed to optimize the net benefits from our forests – the "public interest."
There are a lot of commonalities in any business’s ability to achieve competitiveness and success. Forestry, mining and tourism all require certainty on land base accessibility. For the forest sector, harvestable land base and access to economic timber is vital to maintain competitiveness and the ability to positively contribute to the provincial economy. Land base uncertainty leads to a lack of flexibility in planning, poor ability to respond to markets, declining profitability, erosion of investor confidence and ultimately, the undermining of B.C. families dependant on forestry and other resource development.
The initiation of the “PIE” pilot on the coast is timely as many land-use planning initiatives in British Columbia, from local GAR orders (government actions regulation) to legal orders for the Central Coast, have failed to adequately and impartially consider all three essential ingredients of public interest: social, ecological and economic outcomes. The reorganization of the Ministry of Forest, Lands and Natural Resource Operations (MFLNRO) referenced the requirement to recognize and balance social, economic and environmental needs of importance to British Columbians. With its mandate of "one land base, one land base manager" principle, the MFLNRO is reasonably positioned to test or oversee an objective and comprehensive assessment of the benefits and costs of decisions that may change the land-use allocation across the various resource values, including the Crown’s forest land base.
It is important to note the key objective of the PIE pilot is to develop an independent, impartial and standardized evaluation process for resource use decision makers. The PIE framework is meant to inform the decision-making process, not be a vehicle that approves or disapproves a development proposal. It is hoped the pilot outcome will also aid decision makers to better understand cumulative and potentially compounding impacts of land base withdrawal decisions, particularly in the context of business and social impacts.
The pilot project will be tested at two levels, the first on Vancouver Island, which aligns well with the decisions stemming from the Vancouver Island Land Use Plan. This broad level is intended to establish the “what is” benchmark with respect to past decisions and it is hoped this will help develop and maintain a tracking tool for direct and incremental impacts on both resources and the viability of resource-based business. Once the initial bugs are worked out, the pilot will focus on one or more management units so that decision indicators can be scaled to provide for a more robust test of the benefits and costs of proposed decisions at the operational level.
HELPING JAPAN REBUILD
Photo: Government of B.C.
BC JOBS AND TRADE MISSION Coast Forest joined Premier Christy Clark and approximately 350 delegates, representing some 150 companies, organizations, and community groups, participating on the B.C. Jobs and Trade Mission to Asia in November, making it the largest international delegation in the province's history. The focus of the mission was to strengthen existing relationships between B.C. and Asian markets, opening doors for new relationships and setting the stage for future opportunities in China and India.
As in years past, forestry delegates focused on selling more lumber to China. During the B.C. Jobs and Trade Mission, forest companies sold approximately 1.46 million cubic metres of lumber, 47 per cent more than they did during a forestry-specific trade mission in 2010.
"It’s important for industry and government to continue to solidify and strengthen our relationship with China," explains Coast Forest’s Rick Jeffery. "China’s building frenzy continues to provide an insatiable demand for our wood products. Currently about a third of our total output is going to China, which means jobs in our mills, woods and in our communities."
The forestry delegation made stops in Beijing, Shanghai, and Tokyo with a visit to the tsunami region in Sendai. Most then made their way to India, where they attended events in Mumbai and the port city of Kandla. “India is a new frontier,” says Jeffery. “This means we need to create a culture for softwood where none currently exists. We met with 16 potential customers, and with our newly acquired understanding of that market’s needs we are ready to roll up our sleeves.”
PILOT Competing demands for the coastal forest land base will not go away and will likely increase, so it is incumbent on government to make better land-use decisions designed to maximize the net benefits from our forests for British Columbians and their families. Utilizing the pilot Public Interest Evaluation framework to inform land-use and policy decisions with sound social, ecological and economic information should help government realize this important goal.
Photo: Government of B.C.