Lumber prices rocket as lumber in Fort Nelson forests remain locked up by Canfor

Vaughn Palmer reported on the Throne Speech last week, and in his article he discussed the standoff between the residents of the Northern Rockies and the international company Canfor that holds the tenure to Fort Nelson timber supply but closed its mills here in 2008.

The price of lumber has doubled in the past year and is now over $507 US per thousand board feet. .

This is what he wrote: Over a few brief sentences in the throne speech this week, the NDP government signalled it will begin restoring the requirement that timber harvested from public lands be processed in nearby mills.

“Government will revitalize the forest industry’s social contract with British Columbians, to ensure that the use of public timber generates good jobs in forest-dependent communities and provides a fair return for the public,” said the speech.

“By encouraging the development of new products and processes, your government will work with industry, First Nations, workers and communities to make forestry even stronger, and maximize the value B.C. gets out of each log.”

Did that last bit, about maximizing the value received from each log, mean that the New Democrats would be moving to restrict raw log exports?

“That’s certainly my intention,” Horgan told reporters. “I want to make sure that we’re maximizing the benefit of our public forests for the public of B.C.”

But then he segued into a broader discussion of the industry’s social contract with B.C., shorthand for the obligations it ought to assume in exchange for access to public timber on crown land.

“We have lost, I believe, the connection between resources and communities over the past number of years,” said the premier. “I want to re-establish that relationship. I want to make sure that for every log that is taken from a public forest, the benefit is maximized to the people in the community.”

In a follow up conversation with the premier Wednesday, I suggested he was proposing to bring back “appurtenancy,” a requirement in the Forest Act that tied specific timber harvesting rights (tree farms and other tenures) to specific mills in communities within reasonable distance of the trees.

Horgan confirmed he was indeed proposing to bring back “appurtenancy,” though he joked the requirement has been gone so long only a few old hands will even recall it.

It was in fact abolished in 2003 by the then-B.C. Liberal government on grounds that it forced wood to be delivered to designated mills, even if it could be put to better use at a better value elsewhere.

“We on the one hand talk about maximizing the return out of every stick of timber we take out of the forests,” said then-Forests Minister Mike de Jong, “and yet, in the very next breath, defend a policy that requires that timber be funnelled into what are, in many cases, two-by-four (lumber) plants.”

Though the Liberals engineered the blanket removal of the appurtenancy clause as part of sweeping market reforms on public forest policy, a notorious precedent was set under the previous New Democratic Party government.

As Horgan recalled this week, a major controversy erupted late in the life of the 1990s NDP government over the closure of a sawmill in Youbou on Vancouver Island with the loss of more than 200 jobs.

Up to 1997, timber harvesting rights under a tree farm licence had been tied to the continued operation of the mill. But when the TFL was renewed that year, the requirement was removed.

Later, after the mill was closed, NDP forests minister Dave Zirnhelt blamed “the bureaucrats” for dropping it.

Going forward from the present day, Horgan agreed the government needs to tread cautiously in moving to restore appurtenancy. Many mills have closed and others are now far removed from their timber supply.

But during a Facebook interview with Global TV’s Richard Zussman on Wednesday, Horgan cited ongoing talks regarding the timber supply in Fort Nelson as an example of how the government might proceed to restore the link between timber supply and local processing jobs.

Since two mills in Fort Nelson closed for economic reasons a decade ago, much of the timber harvested in the region has been shipped southward for processing.

With Canfor, the operator of the two closed mills, continuing to hold the rights to harvest most of the timber in the area, the local council of the Northern Rockies Regional Municipality has urged the company to start using the wood to create local jobs or free up the wood for someone who will. “Use it or lose it,” in effect.

In an effort to repatriate some processing jobs, the Municipality and the Fort Nelson First Nation have banded together and applied to the province for a 25-year community forest licence with an annual allowable cut of 185,000 cubic metres.

Approval is hoped for later this spring. As well, an effort is underway to reopen one of the two mills, Forests Minister Doug Donaldson said Wednesday.

So long as the Horgan government proceeds on a case-by-case basis, each deal can be judged on its merits, and the situation in Fort Nelson does cry out for relief.

But blanket reversal on appurtenancy and the other market reforms brought in by the Liberals could have unintended consequences for what the throne speech characterized as the fight for “a fair deal” with the Americans on access to their market for B.C. softwood lumber.

While the Liberals justified the reforms as a bid to make the B.C. industry more competitive and productive, they did also address U.S complaints about unfair trade practices on this side of the border.

Any return to the 2003 status quo could revive those complaints, given the U.S. industry’s propensity for translating every nuance of B.C. forest policy into immediate grounds for yet another trade action.

Vpalmer@postmedia.com

Twitter.com/VaughnPalmer