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--  Industry Analysis  --

Are BC Forests FOR SALE?

The issue of privatizing BC forests has been raised, but a consensus view has yet to emerge.

By John Clark

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While BC forest companies may like the idea of owning more of the land on which they operate, it’s certain to receive more study before any kind of commitment comes from the provincial government.

When British Columbia Deputy Premier—and former forests minister—Dan Miller recently proposed privatizing timber land as a remedy for the province’s failed "Soviet-style" forest management, he was quickly shot down by his boss, Premier Glen Clark.

Clark said Crown land is not for sale. But, in fact, it is. BC is exchanging large sections of the forest to compensate companies for Tree Farm Licence (TFL) territory converted to park land as part of the province’s protected areas strategy, and some of it is ending up in private corporate hands.

When more and more land is ceded to exclusive aboriginal control, as in the Nisga’a treaty just negotiated, other land will need to be transferred to the companies as compensation for logging rights lost to native land claims.

BC has now designated almost enough territory in its protected areas to satisfy the United Nations’ suggested target of 12 per cent. It’s far ahead of any other province. In fact, Canada as a whole has reserved only six per cent so far.

Ontario Premier Mike Harris’ promise to designate 12 per cent, mostly in the northern part of the province, will bring us close to the UN standard—if it survives and if he can find a fair way to replenish the industry’s forest inventory. But compensation is going to be a sticky political issue for him. It will pit rural voters against the urbanites in southern Ontario.

Although the industry is said to be on side with Queen’s Park, analysts are already saying the companies will ultimately be the losers. When any portion of the forest is removed, long-term timber supply is diminished; 12 per cent is a lot of land in a province the size of Ontario.

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With land, along with harvesting rights, being ceded to exclusive aboriginal control as part of the land claims process in BC, other land will need to be transferred to forest companies as compensation.

There are no illusions about this in BC. It’s been accepted that timber harvests there will be below traditional levels for a long time, perhaps permanently. The objective now is practicing intensive forestry on what remains of the resource.

Land-for-land deals are the only option for a New Democrat government (and probably any that follows it) which is so short of money that it has just brought in a budget with a billion-dollar deficit.

Compensation in kind is a well-established practice anyway. The only thing that’s different now is a perceptible shift in thinking toward privatizing the land to be exchanged.

A case in point is MacMillan Bloedel Ltd. The company has lost almost six million cubic metres of mature timber production under the protected areas policy. Under a deal between the company and Victoria, MB would get rights to land worth $84 million.

According to company statements, the land exchange is likely to involve removing its private lands from TFLs and transferring Crown land into private MB property. That’s a small deal. But there’s a principle there that the government can’t hide from. The environmental groups know that, because they’re calling the deal the biggest threat ever to forest survival.

Nor are privately held forests unusual elsewhere. MB chief executive officer Tom Stephens likes to point out that in Sweden, that paragon of logging practices, 88 per cent of forest land is privately held.

In no other country with a significant timber industry is 95 per cent of the land in the public domain, as it is in Canada.

Even so, Bill Wareham of the Sierra Club of BC insists public land is still best held as a public trust.

Professor George Hoberg of the faculty of forestry at the University of BC forestry department says a government in turmoil like Clark’s is in no position to push privatization. The industry may be entitled to security of supply, but that could probably be provided best with longer-term leases on Crown land.

For him deals like the one at MB will make it harder to get a consensus on what to do about the crisis in BC’s industry. Not much public comment on privatization is coming from the executive offices. But there’s enough talk behind the doors to suggest it’s a subject of serious conversation.

"You’d be nuts to prefer Crown land to private land," says one executive. "Would it be a good idea for MB to increase its private holdings? Yes. Whether MB is a precedent, I’m not so sure."

For Lee Cooper of the BC Council of Forest Industries, privatization is a "big picture issue" that needs a lot more study before any government should commit to it.

But that’s precisely what’s happening in the negotiation of land exchanges any- way. While most of the territory for parks has already been designated, the land to be ceded as compensation hasn’t. Since old-growth forests are being increasing-ly placed out of bounds, that land will be in second- and third-growth areas.

That’s where intensive silviculture will be needed. Just about every initiative to save the industry by the NDP has failed, from the tough Forest Practices Code to the Jobs and Timber Accord to Forest Renewal BC. Indeed there’s talk of abandoning Forest Renewal, which is sup-posed to manage silviculture.

So the question going the rounds of the corporate dining rooms is: "What is the incentive in practising intensive forestry if you don’t get the benefit from it?"

That’s why Miller raised the privatization issue. He’s admitting that central planning in the Soviet style hasn’t worked. If the private companies, left to manage the forests their way under conditions set by government, can solve the problems, "what’s wrong with that in terms of public policy?" he says.

Broad-based privatization may be a bit too radical for an NDP government to acknowledge openly. But the next government in BC is likely to be Liberal, led by free-enterpriser Gordon Campbell.

He’s expected to sell off BC Hydro and the Insurance Corporation of BC. Some form of privatization in the forests might not be too much for him, especially if the big dollars involved would help to pay down BC’s massive public debt.

Miller has neatly raised the question for him, should Campbell want to answer it.

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