March 26, 2003 Ministry of Forests


The government is creating opportunities for new entrepreneurs, small operators and the value-added sector by reallocating 20 per cent of logging rights from major licensees, which will be added to what is already available on the open market.

As a result of these and other changes, up to 45 per cent of the province’s total harvest will eventually be available through the open market, making more timber available for First Nations, community forests, woodlots, the value-added sector and new entrepreneurs.

Through the Crown, the people of British Columbia own more than 95 per cent of the province’s forested land. The right to log that land is granted by government through tenure contracts. The government also controls forest practices and regulates the harvest. Licensees pay annual rent as well as fees for the timber they cut.

Currently, about 75 per cent of the allowable annual cut is committed in long-term, replaceable tenures like tree farm licences and forest licences. The rest goes to the B.C. Timber Sales program, to non-replaceable licences and various other short-term, small-scale tenures. With so much of B.C.’s allowable annual cut spoken for, new operators have difficulty becoming involved in the sector, no matter how innovative or efficient they may be.

Of the timber being reallocated, about half will be redistributed to First Nations, woodlots and community forests. The other half will be added to the timber sold at auction by B.C. Timber Sales as part of the province’s new timber pricing system, which will ensure British Columbians receive fair value for the use of their forest resources.

The first 200,000 cubic metres of allowable annual cut in replaceable tenures held by any firm will be exempt from the redistribution plan, which will reduce the effect on smaller operators. Twenty-seven companies will be affected by the reallocation.

The Ministry of Forests will work with affected licensees to identify specific areas to be returned to the Crown. For areas that will be used in the new timber pricing system, the key requirement is that timber be similar overall to that held by major licensees. This will help ensure that prices fetched at auction can be used to establish fair stumpage rates to be paid on other timber. Government will work to minimize the effects on the companies involved.

The reallocation process begins April 1. To ensure a smooth transition and to minimize disruption for workers and licensees, companies will be allowed to continue logging at current rates until areas to be returned to the Crown have been identified.

Licensees have, over time, invested money and taken risks to develop tenures (for example, they have invested in planning, roads and bridges). Licensees will be fairly compensated, as the law requires, for harvesting rights returned to the Crown. Government has set aside $200 million in one-time funding for this compensation.

Overall, reallocation provides an opportunity to diversify and strengthen the industry so it can continue to provide jobs and generate wealth for the Crown and the people of British Columbia. It will provide expanded opportunities for small entrepreneurs, First Nations and communities. And the reallocation will also lead to more robust log markets in all parts of the province and diversify industry to become more globally competitive.



Media contact:

Mike Hogan
Communications Director
250 387-8486