2017 International Forest Industries Magazines April May 2017 | Page 18

LOGGING & BIOMASS NEWS

BC log exports to Asia soar

While BC forestry companies face a long-term decline in the annual allowable cut in the Interior , thanks to the mountain pine beetle infestation , BC companies on the coast have been exporting raw logs , mostly to China , in record volumes in recent years reports Business in Vancouver .
According to a recent Canadian Centre for Policy Alternatives ( CCPA ) report , one in three trees cut on the BC coast was exported in 2016 – 6.6 million cubic metres – which is slightly short of the 6.9-million-cubic-metre record in 2013 . Log exports between 2013 and 2016 generated $ 3 billion .
So , should the BC government ban or severely restrict raw log exports ?
While log exports are not new , their volume and value have increased in recent years , thanks to demand from China , and raw log exports now promise to become an election issue .
The CCPA is recommending a ban on log exports from old-growth forests and higher export taxes on second-growth log exports .
If the NDP has a firm election plank position on the issue , party leader John Horgan won ’ t say what it is .
“ We ’ re not going to lay it all out at this moment ,” he told Business in Vancouver .
Green Party Leader Andrew Weaver said he doesn ’ t support a ban on log exports . He would rather see incentives given to the pulp and paper industry , which could use some of the low-value logs currently being exported Much of the timber that is exported in raw log form is hemlock , which is a lower- value wood .
“ I don ’ t think banning is the way to go ,” Weaver said . “ But differential taxes between logs that export , versus logs that stay , is one way . Appurtenances is another way .”
Under appurtenance rules , which the Liberal government scrapped , trees cut in a given region had to be used in that region to feed local mills
Under appurtenance rules , which the Liberal government scrapped , trees cut in a given
region had to be used in that region to feed local mills .
Once those rules were scrapped , logs could be sold to anyone anywhere . Buyers in China are willing to pay higher prices for hemlock logs than are local mills , which can block export sales , if they want the logs .
If coastal sawmill owners aren ’ t blocking export sales , it ’ s because they can ’ t compete , Horgan said . Forestry companies can get much better prices for their logs in China .
“ The large tenure holders are basically preventing them from getting access to these logs by driving up the prices and selling them offshore ,” Horgan said
While in the past , most log exports came from private land owned by TimberWest and Island Timberlands from their vast private holdings on Vancouver Island , more export logs are coming off of publicly owned forests .
“ It is public lands that [ are ] supplying the bulk , and that is increasing ,” said Ben Parfitt , who authored the CCPA report .
BC Forestry Minister Steve Thomson insists that only 7 % of the trees cut on coastal Crown land are exported .
Asked if an NDP government would bring back appurtenance rules , Horgan hesitated , saying that any regulatory changes need to be considered within the context of ongoing softwood lumber negotiations with the United States .
Increased restrictions on log exports could be viewed as protectionism by American lumber producers and give them even more ammunition in their fight against a Canadian system that they already consider to be unfairly subsidized through Canada ’ s Crown tenure system .
An estimated 25 sawmills have closed since 2006 , mostly in the Interior . The mountain pine beetle wiped out half of the Interior ’ s timber supply , and it will take half a century for replanted trees to mature .
“ If you believe – and the writing clearly is on the wall – that there are going to be significant declines in available log supply in the Interior of the province , then the
future of the forest industry – at least the immediate future – is going to be much more dependent on coastal forest industry activity ,” Parfitt said .
An average sawmill produces 300,000 cubic metres of lumber annually , so the amount of logs exported in 2016 would have been enough to supply at least a dozen sawmills for a year .
“ If we continue down the road that we ’ re on , we run a very real risk of fewer and fewer sawmills , and more and more log exports , which means more forgone job opportunities ,” Parfitt said .
But forest-sector organizations like the Coast Forest Products Association ( CFPA ) and Truck Loggers Association ( TLA ) argue the reverse is true . Log exports help to subsidize logging operations , they say , which benefits local mills .
“ Log exports are a very important part of the economics of the coast , ensuring that we can harvest the entire profile of the allowable cut , and that means getting into some of the harder , more economically challenged areas into the lower-quality stands ,” said CFPA president Rick Jeffery .
“ Log exports help you do that , and they help you do that in a manner that puts logs in front of domestic mills .”
If new mills aren ’ t being built on the coast , it ’ s not because there is a shortage of coastal timber , says TLA executive director David Elstone .
“ There is a surplus ; you have the ability to access that surplus ,” he said . “ It ’ s not log exports that are restricting that investment .”
As for the Interior ’ s shrinking
timber supply , Weaver thinks there are opportunities to free up more fibre in northeastern BC , where the annual allowable cut is underused .
“ There are examples ,” he said , “ like up in the Fort Nelson area , where we have large timber lots that aren ’ t being harvested and there are local mills that would like to harvest it .”
Rick Jeffery is the president and CEO of the Coast Forest Products Association
David Elstone , Executive Director Truck Loggers Association
16 International Forest Industries | APRIL / MAY 2017