Forest pays dividends—to the town

The B.C. town of Powell River has seen big-time benefits from its community forest, with a hot log market meaning significant investments in community projects—and work being created for local contractors.

By Paul MacDonald

The town of Powell River, on B.C.’s Sunshine Coast, received a whopping financial dividend—for $2 million—courtesy of its forest operations, in 2018.

In fact, the community of 22,000 has been getting dividends, via its Community Forest Reserve Fund, for the last 10 years, each of them representing the profits from the Powell River Community Forest (PRCF).

Chris Laing (above), of Powell River-based company, Results Based Forest Management Limited, is general manager of the Powell River Community Forest. Laing works closely with the board of the community forest board to ensure a successful business, and the highest standard of forest practices.

And the town has been putting the money to good use, funding everything from the Powell River library to scholarships for local students studying resource management.

In 2017, thanks to strong log markets—despite the tariffs on softwood lumber destined to the U.S.—the PRCF harvested about 28,500 cubic metres of wood. And along the way, put back close to $1.7 million into the Powell River community, using the services of everyone from logging and roadbuilding contractors to local log scalers.

That’s on top of the record $2 million in dividends they delivered to the town.

The PRCF recently celebrated its 10th anniversary, and over the years has contributed in a major way to the community. In 10 years, close to $8.6 million has been contributed to projects in Powell River.

From building logging road to harvesting timber, the Powell River Community Forest creates jobs—and pays dividends—in the B.C. coastal community.

And that funding does not simply disappear into general revenues. In that 10 years, the community forest has made 98 grants—which have had a significant impact in this town two ferry trips and 135 kilometres up the coast from Vancouver.

It’s all made possible by a Community Forest Agreement the town made with the province a decade ago. For those not familiar with the term, a Community Forest Agreement (CFA) is an area-based forest tenure issued by the B.C. Ministry of Forests that allows harvesting of timber on provincial forest lands. The intent with CFAs was to provide communities with the opportunity to have more control over how their local forests are managed, and to directly receive benefits from forest development occurring in their area.

The Powell River Community Forest covers about 7,100 hectares of forest area, and has a sustainable AAC of 35,000 cubic metres per year. Powell River Community Forest Ltd. was set up by the town to hold the CFA on behalf of the entire community. While it is a for-profit company, 100 percent of its profits are returned to the community.

The PRCF is overseen by a nine-person volunteer board of directors, many of them with forest industry backgrounds, such as Greg Hemphill, who retired as district manager for the Sunshine Coast Forest District with the Ministry of Forests, and is now president of the PRCF. He worked on establishing several community forests in the region during his time with the ministry. “I’m pretty bullish on community forests,” he says.

Hemphill’s position, along with the other board members, is unpaid.”

General manager of the PRCF is Chris Laing, of Powell River-based company, Results Based Forest Management Limited. Laing works closely with the board both to ensure a successful business, and the highest standard of forest practices. Laing’s firm does work for a number of clients. “But the community forest is definitely my favourite client to work with,” he says. “It’s inspirational, seeing all the benefits that go to the community.”

All that said, there are challenges to operating a community forest. Larger contractor and licencee operations are able to achieve efficiencies of scale, because of their size. That’s less so with smaller community forests, like PRCF.

“The big thing for us, because we are smaller, is keeping overhead down,” says Hemphill. For example, they share an office with the local tourism centre, and there are no employees—everyone, including Laing, works on contract for the PRCF.

“PRCF is careful not to overstep it’s modest-sized cut and the board believed it would be a mistake for us to go out and hire full time employees and hire our own equipment,” says Hemphill. “We recognize we can’t sustain that and that contracting makes the most sense.”

And that means everything, from building road to sourcing their office supplies.

“We recognize that with the level of annual cut that we have, that it’s a part time operation,” adds Laing. That may be the case, but Laing spends a lot of time on community forest work. He does pretty much everything, from engineering, planning to running public tours.

An advantage the PRCF has is that it was originally planned, and still is, an economic development initiative.

“Every community forest has a different approach in terms of how they balance their economic, social and environment objectives,” explains Hemphill. “But with Powell River, the Community Forest Agreement was definitely planned to make money and create jobs for the community.”

But he added that it is not their only focus, as there are other key forest management objectives such as protecting the water quality of the Haslam Lake and Lang Creek community watersheds, as well as integrating their operations with high use recreation values in the community forest area.

Hemphill notes that they don’t have the pressure of being the sole support, log wise, for local wood manufacturing facilities. “We do sell some of our timber locally, but it is pretty small scale.” That said, the PRCF gives preference to local manufacturers first with their logs.

In the bush, they try to plan out operations so they are able to make best use of local contractors. “We try to do logging and roadbuilding operations in the fall and winter when the major forest operations aren’t quite so busy.” This also works well with timber markets. “The timing is important,” says Laing. “With our winter logging shows, we are able to then hit the spring market with our timber, and get fairly good prices.”

Hemphill notes that Western Forest Products, with their Tree Farm Licence 39, has fairly large local operations. That means there is a good contractor community in Powell River that the PRCF can call on to bid on work.

“All of the major work goes out to bid,” says Hemphill. “For a lot of companies, it helps to fill in their work schedule. They won’t plan their year around our work, but it helps keep them going over the winter.

“And I think the companies like being part of the community forest, and seeing part of the money going back into the community.”

In 2017, the Powell River Community Forest harvested about 28,500 cubic metres of wood, and along the way, put back close to $1.7 million into the Powell River community, using the services of everyone from logging and roadbuilding contractors to treeplanters, and supplied timber to local mill operations.

One of those is Bob Marquis, a local roadbuilding contractor, who does work for the PRCF. “I can’t say enough about the Powell River Community Forest,” says Marquis. “I think it’s a model for the whole province.” He noted the dozens of community projects it has funded over the years.

“They are not projects, as far as I am concerned. They are community accomplishments.”

With their harvested timber, the Western Red Cedar is trucked to the largest local mill, Lois Lake Lumber, which is primarily a cedar operation. “It’s been a great relationship, both for Lois Lumber, and for the community forest,” says Hemphill.

Cedar is a minor component of the second growth Douglas fir leading stands covering most of their forest, so supply is limited. The rest of their timber is marketed through log broker, Canadian Overseas Log and Lumber, into the broader domestic market.

Pretty much from the start of the community forest, their Douglas fir, from 5 to 15 inches, has gone to plywood manufacturer, Richmond Plywood, for peelers. Richply, located in Richmond in the suburbs outside of Vancouver, is an interesting story in itself, since it is 100 per cent employee-owned.

“Recently, Richply has also been taking our 6 to 11 inch hemlock for peelers, as well, with the hot timber market,” says Hemphill. “They have been a good customer for us.”

The Powell River Community Forest helps to keep local logging contractors like Tilt Contracting—and equipment operators, such as Chris Westgate (right) of Tilt Contracting—busy in the woods. In the last 10 years, the community forest has also funded close to $8.6 million of community projects in Powell River.

The PRCF is starting to shift logging operations, to target hemlock blocks, to take advantage of the healthy log markets. The stands with a higher component of hemlock normally drag down profitability.

The community forest also supplies smaller mill operations in and around Powell River. “As long as they can buy logs by the truckload,” says Hemphill. A truckload will keep many of these smaller outfits going for quite a while, he notes.

So pretty much all of the timber harvested in the PRCF ends up at local or regional mills. At times, they’ve exported small amounts. “It’s been worth it, from time to time, to export lower grade hemlock, but that has been a small amount of what we have been producing.” With a strong domestic log market over the last couple of years, there have been virtually no exports.

On the forest management side, the PRCF has made some significant investments in technology in the last three years, including using advanced remote sensing methods such as LIDAR to do a timber supply review. The amount of data that they’ve been able to obtain has been truly impressive, says Laing.

“As the person who is doing the planning and engineering, the accuracy and information you can pull out of the data from LIDAR is amazing—it’s a real game changer for managing the forest.

“Now we can say we probably have the best timber inventory in B.C.,” says Laing. “In terms of sustainability and decision making, I’d say we are pretty comfortable.”

While a lot of the timber that is ready for harvesting now on their 7,100 hectares is in lower elevation areas and fairly accessible, they are going to have to look to doing higher elevation work in future. “We have blocks that are ready to go for grapple yarding,” says Laing. And they may look at employing the newer steep slope equipment that has been introduced to the B.C. Coast, such as tethered equipment.

In its 10 years of operation, the community forest has made 98 grants—which have had a significant impact in Powell River, funding everything from the Powell River library (left) to scholarships for local students studying resource management.

“I’ve been watching that quite closely,” says Laing. “I still have concerns on the soil impact since we are a community watershed. But there is some definitely some interesting steep slope technology out there.” The PRCF is part of the Haslam Lake and Lang Creek community watersheds.

But as with the current work they are doing with logging contractors, it would involve making use of the contractors’ equipment, rather than the PRCF purchasing steep slope equipment.

“It would really be driven by Western Forest Products and some of their main loggers,” says Laing. “If they went towards steep slope equipment, we would look at harvesting in the community forest in a bit of a different perspective, to see if it might be possible to use some of that technology on our claim.”

Generally, they now employ feller bunchers, skidders and processors in ground-based work, with their contractors.

With a decade of operations behind it, the PRCF now has an extensive road and trail network that in addition to being used for forestry operations, is heavily used by many recreational users in the community. Trail work is carried out regularly in the forest by the humorously-named BOMB Squad. BOMB stands for Bloody Old Men’s Brigade, a group of local retirees who build trails and bridges.

The PRCF certainly lives up to its community name, in that it is used by a large number and broad range of groups, from mountain bikers, to horseback riders to quaders, in the community. Laing is a member of the Outdoor Recreation User Group Trails Society, an umbrella group for all the recreational user groups in the town. “We have pretty good relationships with all the user groups,” he says.

They are fortunate, says Laing, in that people in Powell River, in general, understand the importance of the forest industry.

“It’s not like we’re a big urban centre, where people go out there with their mountain bikes, and don’t want any logging,” he says. “People in Powell River understand that the forest industry is still a big part of what goes on here. We still have that dynamic in the town.” Some of those mountain bikers and hikers also work for local loggers or mills, he adds.

And the grants the PRCF has made help to solidify the connection to the community. Among its projects have been contributions to build a new library and purchase land for a new park in the centre of town, Millennium Park.

The aim with their grants, says Hemphill, is to help with a specific project.

“Our focus is not on giving grants for operating funds,” he explains. “We focus more on sustainable solutions. For example, there was a local society trying to raise funding for a youth resource centre. We worked with them, and gave them a grant to help renovate their facility. And for the Food Bank, we funded a delivery vehicle. Some of them are little, and don’t get a lot of attention, but they are important—especially in a smaller community.”

While the Powell River Community Forest has been a success, with some hefty amounts available for local improvement projects lately, Hemphill cautioned that this will not always necessarily be the situation.

“Part of our job with the board is to manage the expectations of our shareholders— and we have not been through a full industry downturn yet.” In other words, the PRCF is not always going to be making an annual contribution of $2 million to the community. The contributions have been more modest, some years.

“When we started out, we thought a strong dividend would be in the $500,000 range, for planning purposes.” The $2 million contribution should not be considered a given each year, he cautioned. “We have been on a pretty good run here for three years, but there are cycles.”

During one down period, in 2009, the PRCF pretty much stayed to their cut.

“Part of the decision making was to keep cutting timber, and keep people working,” says Hemphill. “We’re more about the community than about making the largest profit for shareholders. We were able to find blocks that had small margins of profitability.”

He says the PRCF would like to grow in size, but that would require changes to provincial legislation governing community forests. “We think there is an opportunity for us to get larger. We’ve applied for an expansion, but we’re waiting on the legislation to change.

“We think we have a good case for growing. We’d also like to be part of increasing local wood product manufacturing.” But Hemphill admits that would be “a tough nut to crack” with the record of mill closings—rather than openings—on the B.C. Coast over the last decade.

In the meantime, everyone involved with the PRCF is looking forward—with great pride—to starting in on their second decade of operations.