An article by David Haley and Harry Nelson; Forest Sciences Centre UBC two papers by BC Competition Council described a B.C. forest industrial sector in a general state of decline.
The coastal industry was in the worst condition with obsolete mills, high production costs, and a chronic shortage of new capital investment.
The Interior industry was doing much better because of major investment and updates to state of the art mills but the success was unsustainable over the medium and long term.
The success was mainly due to an increasing supply of inexpensive wood as a result of the mountain pine beetle epidemic.
In its wake the epidemic will leave a massive decrease in available wood supplies, increased raw material prices, serious social problems and excessive mill manufacturing capacity relative to log availability.
The Competition Council’s reports attribute the competitive plight of the forest industries to a number of factors, some external and beyond the control of the private or public sectors.
Other factors are legal, socioeconomic, and institutional such as First Nations land claims, excessive regulation of and over dependence on publicly owned timber and a tenure system that fails to provide secure access to timber.
The current B.C. forest tenure system is ill equipped to deal with the realities of the 21st century including the changing nature of the forest lands, new public attitudes, rising energy costs and increasing global competitiveness.
Alternative models need to be explored that will allow the industry to adjust to global market forces, encourage innovation and give birth to a new spirit of entrepreneurialism.
A new tenure system needs to be socially legitimate, flexible, transparent, secure, diverse, have minimum compliance costs and have an efficient and equitable timber pricing system.
The authors discuss corporatization and privatization options that have been introduced in Germany, Sweden, New Zealand and Australia which all have different institutional, political and cultural environments.
In most cases there exists either a clear separation between timber producing plantations and natural forests or a consensus as to what lands are best suited for. In some cases it may be for timber production and in others it should be managed for non timber forest production and public goods.
This clarity does not exist in B.C. and they suggest that definitive land use zoning should be a prerequisite to any major restructuring of the tenure system.
For B.C. decentralization is a useful concept requiring further analysis. It addresses the need to create more competitive timber markets, places an emphasis on diversification of the tenure system and helps promote economic efficiency.
It may help to more clearly delineate private and public responsibilities in timber production as well as forestland management.
It also provides a management role and a share in economic benefits to communities including first nations and regional authorities.
This feature will be especially important as the forest industry embarks on major restructuring which the authors believe is necessary to ensure its long run economic viability.
Jim Hilton is a professional agrologist and forester who has lived and worked in the Cariboo Chilcotin for the past 40 years. Now retired, Hilton still volunteers his skills with local community forests organizations.