|March 26, 2003
|Ministry of Forests
B.C. TIMBER SALES CHANGES
B.C. Timber Sales, formerly known as the small business forest enterprise program, provides access to 13 per cent of the provincial allowable annual cut. It awards short- and longer-term licences based on revenue bids and other factors. B.C. Timber Sales clients include market loggers, sawmill operators, lumber remanufacturers and specialty wood products manufacturers.
As part of government’s commitment to revitalizing the province’s forest economy, a new market-based pricing system will be introduced. Under this system, the price of Crown timber harvested on all tenures will be based on the selling price of Crown timber competitively auctioned through B.C. Timber Sales.
To support the new system, B.C. Timber Sales will increase the amount of timber it auctions to 20 per cent of the provincial allowable annual cut. All cutting licences in the program will be awarded to the highest bidder, and the auction rules will be amended to provide a clear, consistent administrative framework.
Sales of non-replaceable forest licences already underway will continue, but when they expire, this timber will also be auctioned competitively.
More allowable annual cut will be allocated to the B.C. Timber Sales program, First Nations and community forests and woodlots, creating new forest-sector opportunities. In addition, the timber processing requirements imposed on major licensees will be removed, providing value-added companies with much greater access to wood fibre. Together, these changes will result in a much greater percentage of the province’s timber being sold through open markets of one kind or another.
During the transition to the new, market-based system, B.C. Timber Sales will continue to sell timber specifically to the value-added sector, but will base awards on the highest bid instead of non-commercial criteria. These separate timber auctions will ensure a source of wood fibre is available for manufacturers while all the forest policy changes are implemented and the volume of wood on the open market increases.
Since this exclusive access is intended as transition assistance for existing plants, eligibility will be restricted to value-added operators currently registered and active in the program. Specific details will be worked out with input from value-added operators.
In the longer term, all companies will bid in the open marketplace, which will free the flow of timber, allowing the right types of logs and lumber to reach the appropriate mills in B.C.
Government will continue to support development and marketing of new value-added programs through Forest Investment Account activities. For next year, $7 million has been allocated to the Forest Investment Account’s product development and secondary manufacturing program.