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Management Side
B.C. forest industry concerned about proposed changes to timber harvesting rights

BRITISH COLUMBIA (From news reports) -- B.C. forestry companies say proposed legislation that would give government a veto over the transfer of timber cutting rights has put the entire forest industry "on pause."

As Bill 22 wends its way through the legislature, several forestry companies have written the government to make the case that what is bad for them is also bad for the B.C. economy and thousands of people who rely on it for their livelihood, said Liberal MLA and forestry critic John Rustad.

"The government is basically ripping up the (tenure) contracts," he told Postmedia on Friday.

Bill 22, which passed second reading Thursday and will now proceed to committee stage, will require forest companies to obtain approval from the forestry minister before transferring tenure agreements to another party. As a result, the minister will be able to refuse the new arrangement, or put conditions on it, if it is not in the public interest.

Forestry Minister Doug Donaldson said he's heard from many small operators, including First Nations groups and communities, who are interested in purchasing a timber tenure.

"Right now it's almost totally allocated," he said. "There's very little diversity in the industry ... Diversity is important because it creates resilience."

One of the goals of the amended Forest Act will be to ensure changes of control do not result in further concentration of harvesting rights, meaning that a swap that happened five years ago between West Fraser and rival Canfor could be off the table in the future.

Supporters say the swap helped keep mills running by maintaining enough wood supply to operate one mill in Quesnel and one in Houston.

But Donaldson said the legislation will give government a tool to monitor tenure swaps and hold them up to a "public interest test."

"It gives us an opportunity to look at these transfers before they happen," he said.

In a recent conference call on its first-quarter earnings, West Fraser CEO Ted Seraphim said uncertainties about government policy could cause the company to put major projects on hold over the next couple years.

"(Under Bill 22) government will have to approve every single commercial transaction," he told investors on April 26. "And there are a lot of uncertainties about what it would take to get a transaction approved ... I think it puts the whole B.C. industry on pause right now."

Seraphim said the industry was hoping to work collaboratively with government.

"They're making decisions without consulting with industry at this point. So we're hoping that we can get them to understand the impacts this will have on industries, communities and employees. But we are very concerned."

The West Fraser CEO said various companies have come together to discuss the issue through the Council of Forest Industries. Postmedia reached out to COFI, but they were unable to provide a response before deadline.


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