Timber Supply — Issue No. 8 — Monday, June 18, 2012 (HTML)

Present: John Rustad, MLA (Chair); Norm Macdonald, MLA (Deputy Chair); Harry Bains, MLA; Donna Barnett, MLA; Eric Foster, MLA; Bill Routley, MLA; Ben Stewart, MLA

1. The Chair called the Committee to order at 4:05 p.m. and made opening remarks.

2. The following witnesses appeared before the Committee and answered questions:

The following electronic version is for informational purposes only.
The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

SPECIAL COMMITTEE ON
TIMBER SUPPLY


CONTENTS
Page
Presentations	221
B. Holmberg
J. Van Barneveld
J. Pressey
L. Pedersen
C. Vandermark
M. Dunbar
T. Park

J. Rustad (Chair): Good afternoon, everyone. And welcome, everyone, to our second community meeting for the Special Committee on Timber Supply. The committee was struck in May with a specific mandate to look at the mid-term fibre supply and what issues could be done to mitigate the impact from the mountain pine beetle.

The process that we're going to go through and that we have been going through, starting this morning, is to go around to a number of communities. We're going to hit 15 communities in total. This week we're hitting ten different communities. The week of July 2 we'll hit another three or four communities, and then the week of July 9 we are doing three days of provincial consultations plus one more day of going out to two additional communities.

Today we've been in Smithers this morning. We're in Houston here, now. Tomorrow we'll be in Burns Lake and Fraser Lake. Wednesday we're going to be in Vanderhoof and Fort St. James, Thursday in Prince George and Mackenzie and Friday in McBride and Valemount.

The purpose of these meetings is to garner some public input around the importance of various values, various issues, that the public would like to have us consider in terms of our determinations — which will go. Ultimately, this will lead to a report that is required to be submitted to the Legislature by August 15.

What we are doing in terms of public consultation is to be able to have a round-table discussion with the mayor and council for the first part of the public consultation, then a round table with First Nations — to which they've declined to participate in Houston, and instead, they're going to be participating in Burns Lake — and then a period of time of public input where the presenters will receive 15 minutes of time to do their presentations. They can decide how they want to use that in terms of questions and answers, etc.

It's a fairly aggressive schedule. The issue is certainly very complex, and the input that we're looking for, of course, is much appreciated, to be able to receive.

So with that, I suppose I should introduce myself. I'm John Rustad. I'm the MLA for Nechako Lakes and Chair of the committee. I'll ask my committee members to introduce themselves, as well, starting with my far right.

N. Macdonald (Deputy Chair): Norm Macdonald, the MLA for Columbia River–Revelstoke.

J. Rustad (Chair): With us, as well, is Larry Pedersen, who is one of our special advisors to the committee. He and Jim Snetsinger are two that were appointed to this committee to be able to give us some advice on a wide variety of issues.

As well, with us today is Kate Ryan-Lloyd, who is our Clerk of Committees, and Jacqueline Quesnel at the back, I think, who is also with the Clerk of Committees. As well, of course, is the Hansard staff: Michael Baer and Monique Goffinet Miller. Have I got that right? That's good. I got a thumbs-up from Hansard.

All of the proceedings that we do through this public process are recorded by Hansard. They're also webcast, so anybody can go and review them, hear them, as we go from community to community.

In addition, the committee has a website, which is www.leg.bc.ca/timbercommittee. That website has all of these proceedings, but it also has a wide amount of information in terms of all the background that the committee received on a variety of topics leading to these consultations.

People can also go to that website to make public submissions. We are accepting written submissions, e-mail or otherwise, through to July 20, at which point we've got to cut off the public input and allow our staff to be able to do some compilation of what we've heard so that we can do the deliberation and get to the report by August 15.

With that, I'm pleased today to have Mayor Bill Holmberg and Coun. Jonathan Van Barneveld. Did I get that right? Thank you. It's not my feel for names.

B. Holmberg: Don't feel bad, John. I don't know how to say it, and I've been at council with him now for just about a year. So that's good.

J. Rustad (Chair): This is meant to have an opportunity for some input as well as for some question and answer. So with that, Bill, I will turn it over to you.

B. Holmberg: Okay. Thank you very much for you guys coming. Jon and I have had some extensive conversations over the pine beetle epidemic, the volumes that are being allotted to TSAs. Certainly, with the situation that went on over at the Hampton group a while ago, it
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brought a lot of things to the forefront that were eventually going to happen sooner or later anyway. As we all know, there's been a huge uptick in harvesting for the pine beetle, and sooner or later that was going to have to go away, and we were going to have to address some issues.

The main reason we're here today is that we want to raise a few concerns that we have. We've met with our licence holders. Just to give you a bit of background, we have two licence holders. Well, we have more than two, but the two major ones are West Fraser, which has a big mill here, and Canfor, which has — they call it — the world's largest sawmill. Vanderhoof fights over that once in a while and says they're a little bigger.

Needless to say, we're a resource-based town, and we depend on the forest for a living for the people of this town, so we thought it was very important that we let you know how we feel. We've met with both the mills, both the licence holders, and we're pretty much aligned with their thought process. West Fraser and — I think, Canfor, as well — will be making written submissions to your committee. I don't know if you've received them yet or not, John, but you will be getting them.

We're really opposed to robbing Peter to pay Paul, and that's what we see with the thought process. I would like you guys to comment on the thought process of you guys wanting to amalgamate TSAs. We are totally opposed to that as the district of Houston. We do not want to see the amalgamation of TSAs. They need to be stand-alone. They were designed for the mills that are cutting in those areas, and I think that needs to be left alone. At this point, it's more rumour and innuendo, but we can see that it's going to raise its head, and we're very vehemently opposed to that procedure.

Jonathan, I think, has got a few comments. In essence, I think that we realize there's a serious problem with the pine beetle. We know there is. I think everybody along this Highway 16 Corridor knew that sooner or later we're not going to have the volume to supply the mills that are along this corridor. There are too many mills, and there will be too little wood.

You could call it protectionism on behalf of the district of Houston, but we're going to fight for the Morice River TSA and keep our mills viable. That was the big thing that we came in here today on. But I would like you to comment. I would like a little bit of thought process on the amalgamation of TSAs, because if you're going to do that, then you might as well amalgamate everyone in B.C., and we could just have a big free-for-all, and that would be great.

J. Rustad (Chair): Sure. I can start off, although there might be some other members that are interested in some discussions.

I think there have been some discussions around that. There was a little bit of information that was put together. But really, if you noticed in terms of the options that have been placed in front of us as a committee to look at, that really wasn't one of the options that is on the table for discussion, although there may be members that bring it up in terms of discussion.

Of course, in terms of the decisions as to where the committee is going to go, that has yet to be determined. It would be premature to say yea or nay to any one particular option at this particular stage, although, like I say, I'm happy to have other members comment on it if they so desire.

N. Macdonald (Deputy Chair): Well, certainly, I take your point. You've been very clear in terms of speaking for the community. In terms of how the process will lay out, we come as the opposition with all sorts of questions, and we had a different terms of reference. We had a lot of things going forward.

But having said that, we are here to listen, and our presumption is that we will then go to a process where we will take in what we've heard and go through an authentic process of trying to come up with some solutions that will, hopefully, be based on realities and based on something positive, if it's there. So really, that's what I can tell you. But in terms of what you're saying…. You've been very clear in terms of the concern that you have, and it's obviously a really legitimate concern.

B. Holmberg: Yeah. Jonathan has a few comments. I'll let him speak to a couple of issues, and then I've got a couple of other things I'd like to say.

B. Stewart: Yeah. Mayor Holmberg and councillor, I was just going to say that one of the things that I think this committee has really been struck to do is to look for solutions and look at the lay of the land the way it is.

There's been a lot of work going on in the background about that, but I think that community by community that is forest dependent, we're looking for ideas and solutions as to what they have. That's the real purpose. It's not to come here with a preconceived or some sort of preordained kind of outcome as to what it is.

We want to know what happens when each community…. We're looking for innovative solutions and ideas on that. That's what we're here to hear.

J. Rustad (Chair): If I may add, just before going to that, each supply area has its own unique challenges. There's no question of that. Across the entire pine beetle area, which is basically from the Houston-Smithers area down to about 100 Mile House or farther south into the Kamloops-Merritt area, the estimated drop in supply is
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going to be a cumulative of about 20 percent.

Of course, in some areas it will be much higher than that. Some areas it will be a little bit lower than that. Basically, you're looking at about a ten-million-cubic-metre-a-year drop in the timber supply — or the equivalent of about eight mills.

In the Morice TSA, the estimated numbers…. You currently cut about 2.165 million cubic metres per year. Pre–pine beetle it was just under two million. Post–pine beetle, when that time comes at some point here in the future — estimated to be in the next ten years or less — it will drop to about 1.5 million cubic metres per year. So the impact in this area from current harvest levels is in the magnitude of just over 600,000 cubic metres per year.

J. Van Barneveld: Maybe just to give a background on myself, I'm a councillor of the district of Houston. I grew up here my whole life. I'm a forester in training, registered with the ABCFP. I'm an avid recreationist. I live in the bush probably seven days a week, including work and recreation. So I have a great tie to the Morice TSA. From my standpoint, I feel that there is lots going on, but there is lots of hope as well for the future, post–pine beetle.

I thought it would be just worth stating a few things about the Morice TSA that would be factors. I'm sure you guys are well aware, but maybe it's good to get on Hansard a few things in the Morice TSA that might be slightly different from other places, that would contribute to the level of harvest, such as how their old-growth management areas are not actually implemented in the Morice TSA compared to a lot of other TSAs.

I think the timber supply in Houston is actually fairly positive in terms of our species mix between pine, spruce and balsam. As for the numbers that Mr. Rustad just gave as a 600,000 drop, while that is significant, it is probably a lot less than most TSAs as well.

There are a few…. Talking to lots of foresters in the area, lots of community members…. Certainly, there's been lots of discussion in the local paper, as well, as to how far people are willing to go or what social licences are willing to be given to extend our timber supply — or, as Bill put it, to rob Peter to pay Paul.

With visuals, I think it's been a fairly accepted fact that most of the communities in the province have approached the government, saying: "Look at visuals as an increase of timber supply."

Old-growth management areas in Morice are not fully implemented yet. We have fairly good land use planning — the Morice LRMP, which is not actually legally implemented. I think with the Morice there is a lot more flexibility in terms of jostling around some of these values, compared to other TSAs.

One of the questions I do have, however, specifically with regard to fishery-sensitive watersheds…. They're proposed for the Morice TSA, but they're not implemented. There is a huge impact in the timber supply if those were to be implemented, essentially shutting down — it could be — a good quarter of the TSA's operating area.

I'm just wondering if any of the committee members have touched on that, or if they're aware of any of the specifics regarding that.

J. Van Barneveld: The fisheries-sensitive watersheds are areas which are identified through, I believe, the Ministry of Environment, but I could be wrong on that. They identify areas which are critical, perhaps for water temperature, quality, fish spawning zones. They're not fully implemented yet. They're proposed. If they were to be fully implemented, there could be a significant drop in cut, because you're only allowed to take out so much volume or so much area within these fisheries-sensitive watersheds.

I'm just wondering, in going forward, if that's going to be considered as an option on the table, or if that's already a done deal.

J. Rustad (Chair): Thank you for that. I'm not sure if any members have any background information on that. I don't know what the status of those are. There are the riparian areas and things that are in place. I see Josh, and I'm going to ask Josh if he has some information that he might be able to provide us with regard to those.

J. Rustad (Chair): Now, if you don't mind maybe coming up to the mike so it can be recorded. And then, give your name and title as you present.

J. Pressey: Sure. So I'm Josh Pressey. I'm the district manager for the Nadina district. As far as I understand, the fisheries-sensitive watershed they're looking at implementing is just something they're starting to look at to see where it goes to. But as part of our new organization, we need to kind of balance out fisheries-sensitive watershed with timber and mining and everything else. That has not been implemented. We just started discussions with industry.

B. Holmberg: I guess one of our concerns would be, as Josh just said, that that needs to be discussed when you're coming up with recommendations. If you guys go ahead and make a bunch of recommendations and the government approves it or whatever and then a year later they
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come out with this fish-protection watershed that affects our cut a whole bunch more, then probably, the decision you made at the time was not a great one. That was our big concern there.

J. Van Barneveld: One of the other concerns we have in reviewing some of the reports that were released, maybe prematurely, a few months ago was the numbers that were given in terms of boosted volumes in the long term due to silvicultural fertilization. I think a lot of us are uncomfortable with those numbers. Perhaps they're a bit overinflated or unrealistic. So we're just wondering, perhaps, how much weight is going to be put on these suggested numbers for increased fertilization if it means logging more timber in the short term in the hopes that there's going to be some increased yield in the long term.

J. Rustad (Chair): Sure. If I may, around the fertilization numbers, I'm going to ask Larry to come up in a second to perhaps comment about that.

There has been a lot work done on fertilization, on the estimates. There has been some groundwork that had been done throughout the last number of years, of course, as well as looking at models from other jurisdictions. The numbers that are in there in terms of fertilization and the uplift, from the work that I've seen, look to be good, look to be solid numbers, look to be relatively conservative numbers. But that would have to be factored in.

On that, Larry, could you come up and just comment about the numbers? Introduce yourself so that Hansard can get it down, recorded properly.

The ministry has been studying and modelling the impacts of fertilization in the province for decades. There are permanent sample plots and temporary sample plots in place that show what the growth-rate response is for early-, mid- and late-rotation fertilization.

I think the capacity to kind of predict that volume is reasonable. I think we'll get it by the right order of magnitude. We can reasonably predict the time frame that the volume comes on.

There will be some questions about what level of program would be implemented and who would pay for it. Then there's an underlying economic question that would need some further examination: what is the return on investment, and is that justified on some sites, all sites?

I would just say, Mr. Chair, that we have the analytic capacity to give you a pretty reasonable perspective and tell you kind of how much risk or uncertainty there is in that forecast, when it gets time to answer that question.

J. Rustad (Chair): In terms of a response as well, the key on a fertilization program is if you do it for one year, you're going to get a benefit down the road for one year. So it's something that would be a program that would have to be done over time, which is where the commitment on the money comes in, in order for you to get the change in the uplift of the potential harvesting.

N. Macdonald (Deputy Chair): Well, it's a discussion this group has had in preparation for this. One of the concerns that we had was using optimistic numbers and then basing cuts in the present on things that could turn out to be overly optimistic going forward. We've had that discussion, and we agreed to disagree on some of the projections going forward. But I'd be interested….

Just from your tone, you share that skepticism — not skepticism, but you're questioning it as well. Is that fair to say?

J. Van Barneveld: Yeah, to some extent I'm not convinced yet that we can rely on increased fertilization as a guarantee that we can cut more timber now, I guess. But I'm fully aware of growth and yield on all the models and the sampling and the systems that we use to identify growth and yield in the province.

I agree with Larry. We can get it right, within the order of magnitude. I'm just wondering if it's something we can bet the bank on.

N. Macdonald (Deputy Chair): Okay. Can I ask another question? Your Worship, you used the term "robbing Peter to pay Paul," and I thought you were talking within communities, but Jonathan, what you're raising is…. Are you also talking about intergenerational or competing values or…? I think maybe I misunderstood.

B. Holmberg: No, I think it's all of the above. I mean, it's robbing Peter to pay Paul if you have generations going forward, our children. The one I brought up was thinking more about communities, different TSAs, but certainly to Jonathan's point — no. I mean, we're the stewards of the forest. There are forests that people can see, and we want to make sure they're managed in a proper manner so our children can live here and your children can live here. It's a broad issue, for sure.

H. Bains: Thank you, Your Worship. I just have a question about the mid-term timber supply forecasts that have been prepared by the ministry.

According to the chart, the current AAC in this TSA is 2.1 million cubic metres, and it's destined to go down to 1.5. Pre-beetle it was almost 2 million. Even if you consider those numbers, there's half a million cubic metres of cut going down. When you talk about two major licence holders, have you had any discussions with them on what the effect would be on their operations when this actually happens?
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B. Holmberg: Absolutely, and like I said earlier, you're going to be getting some written submissions from our licence holders. We knew the pine beetle thing, as mentioned earlier, was coming. I mean, the uptick that we did in the cut…. We knew it wasn't forever. Certainly, some mills did gear up for it and have operated off that.

I can't speak for the mills, but they know there's going to be a downward trend in the next four to five years. It's when we've seen it coming, when that was going to get hit hard. We're a little bit blessed here because of our makeup of wood. We have a good percentage of balsam and a good percentage of spruce, but we still do have a lot of pine. We're not going to get hit as hard as the Vanderhoof area or Quesnel or Williams Lake, but we are going to get hit.

So yes, it's definitely a concern. That's why we're really questioning, and I've got some input, some things that we'd like to see implemented. That's why we're questioning some of the numbers. We just weren't really comfortable with that.

J. Rustad (Chair): Thank you for that, and knowing that I don't want to run out of time here, I'd like to let you go through that, and then we'll go back to some questions.

B. Holmberg: Okay. So here are a couple of thought processes we had under inventory and utilization. There is a need for improved forest inventories. In particular, there is a need to be able to differentiate between sawlog and pulp log as well as live and dead timber supply. Also, the economic timber supply needs to be better understood, and that's where we get back to where we're not really comfortable with the figures, and we question some of them.

To Jonathan's point, care must be exercised to ensure that potential benefits of incremental silviculture treatments are not overstated, particularly over short periods of time.

Access to market volume and volume availability. Where there is an identified timber shortage, the direct award of additional timber rights will only increase the burden on other existing tenure holders. Such actions will shift the negative impacts between licensees and communities. Issuance of non-sawlog-fibre licences should only be done where there is identified unutilized non-sawlog fibre available.

Existing facilities, such as pulp mills and MDF plants, should have access to non-sawlog fibre licences before new entrants, as there will be a shortage of fibre for these facilities in the future.

Granting of additional tenure must consider the uncertainty associated with First Nations' interests and issues. That's something I hope that you guys are paying close attention to.

Looking towards the future, there is no way of completely avoiding further rationalization of the forest industry. Government should not interfere with the market process. The future still does look good for the mills that survive the post–mountain pine beetle, given the forecasted strong demands for wood products.

We believe in tenure reform. We believe in area-based tenure, but I think there needs to be a lot more thought put into it. I guess in a nutshell — Jonathan, unless you had a whole bunch of other things — that's kind of where we're at.

J. Van Barneveld: The mills look good for the next few years, and until that falldown actually happens, Houston serves to be a vibrant community. What I really would like in the thoughts and minds of the committee members, and lots of people presenting throughout the province, is that we would like our communities to be sustainable for the next 40 to 50 years, not just the next five to ten.

There's a real balancing act between the social licence that the public could be giving versus what we are willing to do to free up timber. I think that's an ultimately hard decision. I hope that through this committee process there are some productive results, and it's not just a wash.

J. Rustad (Chair): I have two questions here. I'm going to throw out one question first to have you think about and, if you have an opportunity, perhaps give the committee a written submission around your comments that you've just made.

The one question that I'm going to raise with each community…. This isn't about a specific community or a specific mill.

As I said before, the impact across the pine beetle area could be potentially up to eight mills, more or less. It's hard to predict, and it depends on utilization and a whole bunch of other things that could happen. But if there was a mill that went down here, for economic reasons or other reasons, would your perspective on what you're recommending to the committee be different?

N. Macdonald (Deputy Chair): Just on the area-based tenure, which is something that was there within the terms of reference. Just for Houston, what does it mean to the community? You can set up area-based tenures in a number of different ways, so what sort of things are you considering there? What are the benefits that you see from that? Is it long-term, better management in your view, or does it tie it more to the community? What sorts of things are you thinking along those lines?

J. Van Barneveld: Well, area-based tenure doesn't
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solve anything. You could set up a TFL and the mill could close the next day. What it does give is the incentive for mills to invest in their current infrastructure. They realize then that they have a long-term, vested interest in the land which they are managing.

So while it's not a fix-all, it could be a carrot in front of a horse in terms of maybe getting some more mill upgrades in the town, extending the life or…. Essentially, it's just more favourable for a mill to keep open and invest in its own land base.

B. Holmberg: I think what it does…. Talking to licence holders and stuff, the area-based tenure gives them a lot more flexibility in how they run their business. At the end of the day — and Jon probably knows this better than anyone — it's going to generate more revenue for the government, because utilization hopefully, under this program, will increase — right? So I see it as a good thing.

N. Macdonald (Deputy Chair): And you see…. Currently utilization is an issue, is it?

B. Holmberg: Well, the market dictates utilization. I mean, the pulp market has always been an ongoing issue in this area. It's not like being on the coast, where everything comes to the beach and they either make it into a sawlog or it goes straight to the pulp mill.

Because we have such good sawmills, they generate enough chips that the round-log pulp has not been a commodity that's really being sought after in this area. So I'm hoping that with area-based tenure, some of those questions will be raised and maybe we'll be able to look at identifying that volume.

Certainly, the pellet plants that we have in Houston and Burns Lake are looking at some of that fibre. But then the cost associated with transportation becomes the big one that we fight all the time.

H. Bains: Just for our own information so that when we are talking about different areas, we know what's going on. Do you know if the fibre that is consumed here by largely those two licence-holders, the two mills…? Are they self-sufficient from this area, or are the logs coming from outside of this TSA?

J. Van Barneveld: The majority of the wood for the mills does come from the Morice. However, there's a huge amount that we do import from other TSAs, whether it's from the Bulkley, the Fort St. James or the Lakes. That's generally what's being used to kind of top up what the mills require. So to answer your question directly, I guess: no, there's not directly enough.

B. Holmberg: Both mills are actively involved in a log purchase program, but they do generate…. I don't know the numbers. I'm sure there are people in the audience that could answer the HFP side, but on the Canfor side, I'm not sure of the numbers. But no, they do buy on the open market as well. And we get wood — some out of Hazelton, quite a bit out of Smithers and out of Burns Lake.

It seems to go in all directions. Burns Lake, before the mill went down, was buying out of Smithers. It amazes me when you can see a truck loaded with logs going this way and one going that way, and you wonder about the rationale.

J. Rustad (Chair): Yes, I'd agree with that. For folks from the two mills…. Canfor is about 1.5 million or 1.7 million, I think. Is that what they're cutting?

J. Rustad (Chair): And HFP is about 1.1 million — is it? Or 1.2 million? A little less? It's about 800…?

J. Rustad (Chair): So 800 or 900. There you go. So between the two, that's about 2.4 million, 2.6 million, somewhere in that range, of wood — sawlog component, that is.

One quick question I've got for you is: Houston doesn't currently have a community forest — does it?

B. Holmberg: We also have a salvage association, which is fighting for some volume as well.

B. Holmberg: Yeah, we haven't cut in the last couple of years because the prices haven't been that great, so we've kind of left it alone. We've cleaned up a lot of the pine that was on their licence.

N. Macdonald (Deputy Chair): Did the pine beetle coalition work? How does that connect to what's going on in the community? Honestly, I come from Golden, so I'm not really familiar with the coalition's work. I know that they have a number of recommendations, but is it something tangible for the community, or is it something that seems disconnected? What's your assessment of that?

B. Holmberg: I question the value of the OBAC situation. I mean, they've done some great studies, but we haven't seen too much of the rubber meeting the road.

I think their hearts are probably in the right place, but I've seen a lot of money get gobbled up into studies in the last three years. There are probably people who want to shoot me for that, but that's just my personal opinion. It's not the opinion of council, I'm sure. But I have a hard time to see the value there. I see a lot of rhetoric, and I see a lot of political bullshit.

B. Holmberg: No, I think we…. John and…. We've had conversations. I was very concerned when this whole process started, but it looks like you've got a good group of people. Hopefully, you get some right numbers and you make some good submissions to the government. That's all we can ask for, and thanks for being heard.

J. Rustad (Chair): Thanks for that, Bill, and thanks for previous conversations. As I've said up in Smithers and I'll say in all the other ones, this isn't about any particular community or particular forestry operation. The goal of this committee is to look at fibre supply across the entire area and look at what options, if any, we would recommend in terms of being able to expand on that. Very much appreciate you taking some time and presenting to the committee.

We'll take a brief recess while we assess what to do next. I'm just going to suggest a ten-minute recess for committee, and we'll decide if need to go longer than that.

J. Rustad (Chair): Good afternoon, and we'll continue with the meeting of the Special Committee on Timber Supply. I'd like to thank everybody who's come here today to participate and to listen to the process that we are undertaking.

At this time I would like to invite Carl Vandermark to come up and to give the committee a presentation.

J. Rustad (Chair): Well, this time we've set aside is 15 minutes, but I'm sure we can be a little flexible if need be.

Carl, the process that the committee is going through, and to all the other people in the audience that may not have been here earlier…. We're going through a process in each community where we have spent some time with mayor and council, spent some time with First Nations if required and then a public input component. Each presenter has 15 minutes. You can decide how you want to use that time for the presentation and possible questions and answers.

With that, I will turn it over to you, Carl. Maybe just start with introducing yourself, who you're with and those things.

C. Vandermark: Sure, absolutely. My name is Carl Vandermark. I'm the silviculture manager for Canfor's forest management group, so I look after silviculture operations for B.C. and Alberta.

I'm also an ABCFP councillor. I've been working in northern B.C. for the last 25 years, the last 18 based in Houston. I've had a variety of experience in the Morice and Lakes TSA with extensive experience working in sustainable forest management through my involvement in the Morice and Lakes innovative forest practices agreement and a linkage to our CSA SFM certification.

I'd just like to point out that the viewpoints expressed here today are mine as a professional forester and not necessarily those of the ABCFP or my employer. I'm here as a professional forester, not representing Canfor. Hopefully, I can get done in ten minutes and leave you a couple of minutes for some questions.

The committee has asked the public to comment on options to increase the mid-term timber supply and within that context consider changes to land use objectives, rate of cut and tenure reform. I've got what I'm going to talk about here, so you can jot some notes beside it.

I doubt you're going to hear anything earth-shattering or anything else that you haven't already heard, but I really appreciate the opportunity to express my viewpoint nonetheless. As a professional forester, I'm concerned about sustainable forest management and the social and economic benefits that are derived from the forest. What I'm going to do is I'll touch on land use objectives first,
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rate of cut and, finally, tenure reform and then a bit of a summary.

Land use objectives. I might lead in with just a bit of a preamble, because land use objectives and sustainable forest management, in my mind, are kind of inextricably linked. Sustainable forest management is often viewed as the balance of economically viable, socially acceptable and ecologically appropriate options. Through that, we are really looking for our forests to provide benefits now and for future generations. I kind of touched on this already, but land use plans and voluntary SFM processes are vehicles for realizing sustainable benefits from our forests.

I'm really encouraged, actually, to see that there is some debate being opened up around land use objectives. Social, economic and ecological options have all changed dramatically over the last ten to 15 years. Many people, foresters included, have been advocating for us to think about that — those changing options. We shouldn't really be afraid of change. Adjust and use adaptive management to do that — to develop a plan, implement that plan, check on and act on it.

Actually, one of the strengths of the SFM processes, those voluntary processes, is that we adapt to change on a regular basis. I think one of the failings, actually, of the land use processes is that we haven't really done well in the checking and acting and adapting. So really there's an opportunity to determine and evaluate the current social, economic and environmental options and how they've changed. Then we can make some decisions around them. But those decisions need to be transparent, and the associated social, economic and environmental trade-offs should be rationalized.

One of the key things from my perspective as a professional forester is that any known critical habitat and environmental values need to be maintained. We can't really, from my perspective, violate that. We've probably got more opportunity to deal with the social and the economic options.

The decisions that we make will be better if they're supported by improved inventory, so it's really great to see that government is committed to renewed investment in forest inventory.

As those decisions are being made, provincial and local governments as well as First Nations, various agreement holders and a cross-section of the public should be involved and engaged in that process. That's what I have to say about the land use objectives.

Rate of cut. I read much of the material on the website, and I really liked this document. It was really good — these mid-term timber supply mitigation considerations. I read the timber supply forecasts and all that stuff, and there were really no surprises in that stuff that I read, actually. It was pretty much consistent with all the work we'd done in the Morice and Lakes IFPA.

From what I could tell, there's insufficient volume to support existing manufacturing capacity, even if we're willing to disregard social, economic or ecologically sustainable options. There's really no silver bullet on the land use objectives, and really, it's a no-brainer to me that there's not enough wood.

It was interesting. You've got some budget and electricity rate constraints, increased constraints, and those constraints are going to limit your options to reduce the trough in the mid-term. Without compromising environmental objectives — I've already kind of touched on that — a harvest flow policy that minimizes the trough…. We should look at that so that we can encourage community stability.

Really, what I'm trying to say is that I looked at some of the stuff in there, and let's make sure we don't do the eastern cod run scenario, where the cut completely crashes, because that will do nothing for us for community stability.

In the rate-of-cut stuff there was talk about changing the merchantability definition. That's great from an analysis perspective, but really, economic return is going to drive what that lower merchantability definition is, so just be careful. It might be artificial, or there's probably nothing realized there.

The next piece I want to touch on is incremental silviculture options. Again, this document and some of the other ones talk about limited…. There are some opportunities, but they're limited. Really, the main reason…. A lot of the work we did through the IFPA or done through my training is that any treatments beyond basic silviculture have a negative net present value. So really, there needs to be some kind of financial incentive if you're really going to look at something incremental.

The one thing that I didn't see, and maybe it was because I didn't look all that closely, was…. We've been in this thing for a while now. There's probably an opportunity to prioritize some of our stands or areas for rehab that aren't going to get dealt with. You know, it'll create some employment opportunities. It's going to help from a carbon sequestration perspective, and we can get those stands back into production. I didn't really see that in any of the stuff here, but that's probably something worth looking at.

One thing I'd like to leave you with is that, really, the decisions you make now around the rate of cut are going to have sustainability implications at the tail end of the mid-term and beyond. So really, you need to think about the mid-term and long-term implications of the decisions you make here.

Tenure reform. There should be some form of optional participation in whatever you do, because some folks tend to like to lead and others like to follow. Some folks would probably be comfortable staying where they're at right now.

Something else around tenure reform. We need THLB
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certainty. Whatever comes out, we can't continue to have the THLB be eroded or have further exclusions, and we really need government to play an advocacy role. My experience has been that, so far, we haven't had real great advocacy from a Ministry of Forests perspective around the THLB. We need someone looking after the THLB just like the OGC looks after the oil and gas interests.

Obviously, we need to resolve First Nations land claims. We need to move from a stand-level micromanagement approach to more landscape-level strategies. I'm going to give you an example. We really need stronger linkage between our stocking requirements and our timber supply objectives. Really, on these two points, my current position with Canfor provides me a unique perspective.

I also work in Alberta, and I must say that Alberta is now ahead of B.C. and has moved away from a well-spaced stems-per-hectare approach on every hectare to one where they have stocking requirements that are designed to support the yield assumptions on their unit of area — their forest management area or the area that they're managing — instead of worrying about every single hectare. Then that allows them to wisely invest in their land base.

In the end, tenure reform may provide some incentive to invest, but again, you've got to remember that there's a negative net present value for incremental treatments. So there's going to need to be some kind of financial incentive, particularly to encourage action now.

Summary. Social, economic and environmental options have changed. I think it's entirely appropriate to revisit them in a transparent manner. Involve the public, local government, agreement holders and First Nations, but don't expect it's going to solve our problem. I think it's still just something that we need to do as good practice.

Secondly, around rate of cut, there's not enough volume to support the current capacity. That's a fact.

Third, tenure reform may help for our timber supply. However, we're going to need some kind of financial incentives and resolve the land base uncertainties to make that successful.

J. Rustad (Chair): Thank you very much. I'm going to look for questions from members. I'm going to actually start off with a question — put myself on the list. Then I've got Norm and Ben.

A couple of quick ones. What's your harvesting cost today for a company like Canfor? Is it about 30 bucks a metre — or $25, $35? Do you know roughly?

J. Rustad (Chair): Forty bucks in terms of your harvesting costs. Your silviculture costs are $3½ to 5 bucks?

J. Rustad (Chair): About that. The reason why I ask those questions is…. You mentioned trying to target some of those stands that we're not going to get to, in terms of rehabilitation. So in theory, someone would have to pay to harvest those trees off of those stands and then pay for the silviculture as well as for the road development.

That could be as much as $40 or $45 a metre. In terms of costs, you're looking at a stand of 250 cubic metres, roughly, per hectare. You're looking at upwards of a cost of about $10,000 per hectare, or $20,000.

C. Vandermark: I don't know if it'd be that high, but we're certainly talking in the thousands of dollars per hectare, I would think.

J. Rustad (Chair): Thousands of dollars per hectare. Okay. The question is, I guess, when you're looking at about two or three million hectares that may fall into that category — obviously, prioritized for what money you have: where should we try to find that money from?

C. Vandermark: I guess that's really up to you. That's why I indicated, John, that I think it's a problem. You've applied those constraints. And I threw out the carbon sequestration. Maybe there's something that can be done.

I don't know what's happening with the Pacific Carbon Trust now. I know there's the restriction around being able to use it on Crown land, but maybe there's something that we can do around carbon sequestration to use it for rehab purposes.

J. Rustad (Chair): Okay. Appreciate that. I just had to ask, because obviously, the numbers are big when we start talking about it.

C. Vandermark: Yeah, so I mean, really, I know we've looked at…. In my prior role, I was a woodlands manager, and we looked at bringing in logs for pellets. As you guys well know, it's a pretty tight circle around your processing facility. Any kind of stands where you're targeting that kind of material, it becomes cost prohibitive. You can get it out of your sawlog stands as an incidental
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component, but if you start targeting them, it gets prohibitively expensive real quick.

N. Macdonald (Deputy Chair): I just have a couple of quick questions. First, you talked about the land use plans becoming somewhat static. So you would say that we need to re-engage the community. I presume that you would have the same process, or did I mishear?

C. Vandermark: I don’t know what process. I would want it to be somewhat less cumbersome. The other thing that I…. Again, one of the beauties of our SFM process, the voluntary certification process, is they have a continuous feedback loop, and you're adjusting based on how well you perform around your objectives. That type of an approach might provide us a better end result.

I know that with some of the land use plans, they became very prescriptive around their strategies instead of describing a desired outcome, so your hands quickly became tied if you wanted to try something innovative or different to achieve that end result. So you might want to go more around describing desired outcomes and leaving the strategies up to the people on the ground so that they can innovate and those types of things.

But really the main thing, I think, that I've seen, where the SFM process has worked really well is that…. Everyone's probably seen those continuous improvement loops, where you do a plan, you implement it, you check it and then you adjust it. Really, with the land use plans, all we've done is plan and implemented, kind of. We haven't really checked to see how well they're going and adjusted them. That's really the point I was making.

I guess the second point…. You've touched on certification. I think that at some point the committee is going to get a presentation on certification. When you talk to licensees, there's a concern around anything you do within the context of certification. As somebody who's working with certification, what are the things that the committee needs to think about as they go forward with recommendations? Is there anything in particular?

C. Vandermark: I would think, as a licensee…. I know I'm not supposed to put on my licensee hat here; I'm just speaking as a forest professional. The certification is critical from a marketing perspective, as everyone knows.

The key piece will be — and the reason we do it is really because of the environmental — to deal with environmental concerns. Anything that would compromise…. That's why I touched on known critical habitat and known environmental values. From not only as a forester but, I would think, from a certification perspective, they would be pretty much untouchable.

N. Macdonald (Deputy Chair): Then the last piece is you alluded to the cod. I mean, I can presume what you meant, but what did you mean by that?

C. Vandermark: Again, I was just looking at one of the harvest flow scenarios in here. When you step down the harvest flow, you can gradually step down, or you can go off the cliff. There was one scenario in the Lakes TSA. Maybe it was there for shock purposes, but it showed, I think, three decades outgoing from two million cubic metres to zero. That won't do a whole lot from a community stability perspective. So, yeah, let's not do the cod run.

B. Stewart: Carl, first I want to ask you to just clarify the part about the Alberta silviculture and what you said. I didn't quite hear what they're doing better.

C. Vandermark: In B.C. we have a model — we're trying to move away from it, but ever so slowly — where every single hectare has a certain density of trees on it, and it's pretty complicated. It's been around for 30 years. Every single hectare has to be regenerated.

Well, in Alberta what they've actually done is come up with stocking requirements where they predict a yield at a certain point in time, and that feeds right into their timber supply analysis. There are no minimum requirements on a per-hectare basis. Their results feed right into their timber supply analysis. They either reap that benefit or lose.

That sounds like it might be a scary proposition, but their tenure system is somewhat different. They have area-based tenures. That proposition also allows them, then, to spend money. They might spend less in areas where it's really expensive to regenerate and spend money more wisely where they're going to get a better result.

In B.C. we often bash our head against the wall trying to get the most difficult sites to that same level of stocking that is kind of required. I'm overgeneralizing to try and simplify.

Alberta has gone…. They actually did that because they had an Auditor General report, not dissimilar to what we've had in B.C., trying to link their reforestation strategy to their timber objective. That's actually why they did it. They've tried to link their stocking requirements more closely to their timber supply objectives.

B. Stewart: Can I just finish? The follow-up to that, then, is: in moving to area-based tenure, how would you see that being accomplished — or those stronger linkages you referred to?
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C. Vandermark: That's a good question. I'm trying to think how to answer that. It's quite technical. Right now we don't know where we're going to…. With the volume-based tenure, you could move around on the landscape. You'd be fixed to a given unit of area, and you'd have yield curves assigned to all the stands that you own or have a long-term lease on.

B. Stewart: I was wondering how you saw it being moved from volume-based to area-based — how you see us accomplishing that.

J. Rustad (Chair): How do we get companies moved over to area-based? I'm sorry. How do you get volume tenure moved over to area of tenure?

C. Vandermark: I think there are some obstacles that we'd have to get out of the way. Probably the first big one is going to be the First Nations question. That's going to create some obvious barriers.

I know ideas have been tossed out around suggesting that licensees offer up some cut to go for an area-based tenure. Again, I'm going to try and keep my forest professional hat on. Again, because of that…. I don't know if there would be enough of an incentive just flipping to an area-based tenure and then asking somebody to give up some cut. Why would I do it? Again, there is no positive net present value in growing the timber supply.

I might more wisely invest my moneys if I had some flexibility around landscape-level stocking standards, those types of things.

J. Rustad (Chair): We're well over our time, but, Bill, I'm going to allow you to ask the last question.

B. Routley: Thank you for your presentation. In your summary you have that there's not enough volume to support current capacity. I assume you're talking about milling capacity. You talked about not wanting to go by way of the cod plan. But there are still some serious job impacts that are coming. I guess I'm wondering if you can summarize…. Are there any ideas available to look at mitigating employment?

I see that you also, in your summary, are suggesting that we essentially go back and utilize the land use plans that are existing. By the way, that's a common theme in what we've heard in the other community we've been in so far: "You've got land use plans. Maybe you should go back and relook at them. But don't throw them out, so to speak."

I'm just searching for…. Is stand density something that you think we should be looking at? What are the options to deal with that problem that you know exists?

C. Vandermark: The employment opportunity, as I see it…. I threw out one. We've got incremental silviculture. The other one that I think would be worth looking at would be some kind of rehab approach. Again, we might be able to tie it in somehow with carbon sequestration. I don't know if that has been talked about. I'm sure it has come up. That would be an employment opportunity instead of just letting those stands decay and emit. I mean, they're emitting right now.

There could be…. It would be a decision of…. The marketplace isn't doing it right now, so it would be someone else's decision to take a look at it.

J. Rustad (Chair): Thank you for taking your time presenting and for being flexible to be able to move up the ladder a little bit.

M. Dunbar: Good afternoon and thanks very much for the opportunity to share my thoughts with you regarding the mid-term timber supply in the Houston area. My name is Mike Dunbar. I've worked in the Morice TSA for many years now, and I live in Telkwa.

I just have three very brief points for you. I won't be able to fill as much time as Carl did. These are very quick points, and they'll go fairly quickly.

My number one point is that I believe the government should not be relaxing the current environmental stewardship standards or regulations to free up timber in the short term or even in the medium term. But I do believe that there is an opportunity with looking at visual quality objectives. So that's my first point.

The second one — and this is quite a small one, but I'll make it anyway — is that there are several pipeline projects about to be working their way through our district and the area. I believe that those projects should provide a no-net-loss timber production arrangement by investing in intensive silviculture to offset for those alienations.

My third and final point is that the mills between Smithers and Fraser Lake have replaceable licences, but they also are buying volumes of purchase wood in the regional or the local log market. I believe the best mid-term solution for improving our timber supply is for the government to be working with the First Nations in the Kispiox area to assist with the flow of timber from that operating unit.

Now, I realize that's going to be no small task. It'll take many years to accomplish it, but we're talking about the mid-term here. I believe that with a concerted effort be-
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tween the ministries, there's an opportunity for upwards of perhaps as much as 300,000 metres of volume per year to be flowing from that unit. Those are fairly big numbers when you think about it, without any impact to the environmental side of the business.

So those are my three points. Thanks very much for registering with the community, and I look forward to hearing the results when you've finished your reports.

J. Rustad (Chair): Thank you very much, Mike. You don't quite get off that easy. We have a number of questions, I'm sure, from committee members, starting with Eric.

E. Foster: Thank you very much, Mike, for the presentation. I just have a quick question on your second point. You're talking about the opportunities for intensive silviculture compensation. Are you talking about the companies that put the pipe through contributing to that compensation?

M. Dunbar: Yeah, I think before you approve the project, there should be, perhaps, a bond placed up and then that money spent by the proponent to alleviate the problems of the timber supply.

N. Macdonald (Deputy Chair): I'm just not familiar enough with it to understand the reference to the First Nations in the Kispiox district. So maybe you can explain to those of us that are less familiar with the area exactly what's involved with getting that fibre. Where does it stand now? Where do you see the opportunities? How does that work?

M. Dunbar: Really, it comes down to a land claim discussion. But the main thing is that there are a number of bands in the vicinity, in our area here, that have provided and have been able to work with the government as well as the licensee or the agencies to provide some wood to flow from those units. So it would be a long-term project, but still, I think it's worthwhile.

M. Dunbar: It doesn't flow right now. Very little of it actually is moving right now.

M. Dunbar: So the government could be selling timber sales, but there's difficulty with that wood leaving the district and going to a mill.

H. Bains: Just on that, Mike — the 300,000 cubic metres. Is that considering the mountain pine beetle effects? It is all taken into account, and that's how much would still be available even after the mountain pine beetle consideration?

M. Dunbar: Keep in mind that's my very rough estimate. It's not an official number.

H. Bains: Yes, but still, considering the mountain pine beetle kill in that area…?

M. Dunbar: Most of the activity in that district…. There's not much pine beetle activity in the district. So you could look at this as augmenting the local area that has been affected by pine beetle.

Mike, thank you very much for your presentation, and it's good to see you again.

T. Park: I'm Terry Park. I work at West Fraser. I'm just an employee there. I've been in the wood industry for 34 years, and I have some concerns and questions.

This is a foreseeable thing. We all predicted this was going to come. However, certain events have sped it up a little bit and put a lot of pressure on people.

From what I understand, we're looking at how to better manage the wood supply. I have a question about overseas. When you sell the wood overseas, what percentage of our allotted timber in British Columbia goes overseas which is raw logs?

J. Rustad (Chair): Sure. There are no logs from this supply area, from the supply area in the mountain pine beetle epidemic, that are shipped overseas. As a percentage of the total, I think last year it was around five million, which would have been about 8 percent of the total harvest in B.C. — somewhere in that vicinity. Those are rough numbers. Sorry. Don't hold me to that. That's just from memory.

T. Park: Okay. For these eight mills that you predict are going to go down because of the pine beetle, what percentage of the wood would they be logging out of the province?

T. Park: Okay. So almost half of that could be avoided, without shipping out our raw logs. This has been going on for years. It's hard for us, sitting around our lunch table and talking about this. This is a preventable, manage-
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able thing. We're sending raw material out. We're buying it back as a finished product. We're losing a lot of value.

With a little bit of direction from the government for incentives, I think that we could make a lot more money. It would take a little time, because you're going to have to change the structure of how we're logging and the mills. But I think if we implemented secondary industries right beside our existing mills…. We have a lot of land that's not too far away. Canfor, the pellet plant, is a good example. You could easily double your employment with even a loss of your timber supply.

We're not managing…. Instead of selling all of our chips for the pulp mill, for example — because pulp wood is more easily obtained than sawlogs — if we could somehow do better with our chips, make something more manageable, more marketable, instead of paper, we have an opportunity here to create a lot more employment. The companies will make money, we'll make money, and future generations will be able to work.

B.C. sells a lot of raw materials and gets everything back at a substantial increase in price. I think that this is a golden opportunity where we could take that and turn it around. We can have the finished product, and we can create employment out of this, even with the loss of the wood fibre that we're going to have, because that's going to happen. Why not capitalize on it, instead of dwelling and looking at the job loss?

I think it's up to us how we manage it and what the political will is. I hope the committee is sincere, and I believe you guys are. But I don't have a whole bunch of faith in committees because the government just overrides them, and we don't always get the results we want, even though it's in our best interest.

I wasn't expecting to say anything, but this is a big issue that's going to affect a lot of people. There are a lot of technical things that we can do, but there are a lot of simple things that we can do. We don't have to reinvent a whole bunch of things. We just have to use a little bit of foresight. I think if the political climate is such, then a lot of the companies could be motivated to do good things, you know. It's my hope, anyways.

It's a renewable resource, and we're going to be using it for a lot of years. Let's maximize our usage of it. We're going to have a lull in our supply for sure, but that doesn't mean the industry is going to die or anything like that. I think there's a lot of room for us to….

A lot of the mills could be restructured to operate in this new environment a lot more effectively. Some of the mills could use upgrades right now. They could take this time, with a little bit of political encouragement and help…. I'm not asking for total subsidization or anything, but I think the thinking has got to be turned a little bit from quantity to quality.

We've been just pumping. "We've got to have the volume. That's where the bucks are." If we changed that thought a little bit and went more for quality over quantity, I think we could make more money and get way more returns from our investment in the wood supply.

J. Rustad (Chair): Okay. Thank you very much. I will open it up for questions from members.

N. Macdonald (Deputy Chair): Thanks for this, Terry. It is one of the things, I think…. It's difficult, often, to see how much wood goes offshore. Then we're facing shortages here, and I know there are an awful lot of economic reasons for that. But essentially, what you're talking about is getting more from the resource and trying to fully utilize the resource.

I think what we heard in Smithers, too, was that there were, possibly, opportunities with utilization even within existing stands in the Interior. I know that with some of the bioenergy proposals that were put forward, where we thought we would get returns fairly quickly, it becomes complicated for all sorts of very good reasons once you actually go and try to get the wood.

But I take your point. Government should have a strategy for utilizing the resources as effectively as possible, and there is opportunity to get more value out of the product, which is, essentially, what you're saying — that we still have opportunity to do better in terms of employment.

What I can say is that the work we've done as an opposition in trying to figure out how to get value-added up and going…. I mean, it's a complicated thing for us, and I think for government too. So any ideas that people have on the ground as to how to actually make that work…. In bioenergy, just as one example, I think government was sincere in trying to get operations up and going. Yet the complexities of actually making that happen are things that…. Years later, we aren’t where we hoped we would be.

T. Park: Well, I agree. It's a very complex issue, and that’s why we need a committee such as this to help streamline the different aspects of the government to work together, to get rid of some of that bureaucracy. You get so loaded down with everything, and you start fighting amongst yourselves, and it becomes a nightmare with all of the stuff that you're just talking about.

It's not a simple process. We need rules and regulations, but we need to work together. We've got so many now that it's hard to work together. It's too bad that things have to be politically correct, instead of just being correct — okay? We're burying ourselves.

I agree. It's a complex issue, and there's a lot of money involved, but we're at the wrong end of the spectrum here.

Just in terms of the bioeconomy opportunities, I'm really glad that you've raised that and that thought. We
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had a committee that did some work this past fall. That was submitted to the minister in January with some recommendations around bioeconomy and ways to try to access the fibre, and to deal with that. There has been some work that was done there, and I know that's being looked at in terms of the context of this as well, so I'm glad you raised that.

Just a quick comment about the coastal fibre that's going offshore. The mills in the northwest couldn't find it economical to be able to cut that wood, and the transportation cost to get it here would be prohibitive. There is currently 300 million cubic metres of wood to the north of us, in the north end of the Fort St. James and Mackenzie TSAs, which is uneconomical. It's not contributing towards our annual allowable cut, but it's still sitting there.

The challenge is, once again, the transportation distance to get it to our mills. There is also six million cubic metres of wood that is sitting under Ootsa Lake. The technology is there to harvest it, but it is uneconomical in the current environment in terms of lumber pricing.

If we see a change in that pricing, which I suspect we will over the next number of years, that will change the supply dynamics around that kind of wood. It's just the challenges of the transportation costs and the harvesting costs to be able to get it to our facilities in the pine beetle–impacted areas.

T. Park: So that timber supply up north of Fort St. John that you say…. Now, would that…? It's not merchantable for sawmills. Would it be for pulp mills?

J. Rustad (Chair): It's wood that would be merchantable in terms of…. It's wood that would make sawlogs that would be able to do it.

J. Rustad (Chair): It's just that the transportation costs…. It's too far away for the wood to be able to move down to a sawmill and to be economical, to actually be able to cut it into wood and sell the wood. You would have to do it at a loss, which is why it's not considered part of the supply at this point. But as we see the economics change in terms of the price per thousand board feet of lumber, that scenario could change.

All predictions are at this point that in the next five to ten years that scenario will change in terms of that, but we can't count on it at this point in terms of what could be utilized in fibre.

It's a good idea in terms of trying to use that wood, because that's been my thought too. How do we access that wood that is uneconomical at this stage to change supply dynamics? Thanks for raising it.

T. Park: Well, see, my concern is that even though it's not economical at this time, we're selling it overseas. So by the time it does become economical, we've lost it.

J. Rustad (Chair): There's a lot of wood there. There's a lot of wood on the coast in terms of….

T. Park: Yes, there is, and they've been logging it for a lot of years. There's a lot been going on. They're opening up sawmills left and right over there. You know?

J. Rustad (Chair): We've got to find a way for the economics, but that's, unfortunately, outside of the mandate of the committee.

B. Routley: Yes, thank you, Terry, for raising this important issue. You certainly speak for a lot of millworkers all over B.C. when you talked about sitting with your friends and talking about this issue.

The irony is that this committee is running around the province looking at timber supply, particularly for mills in this region, a pine beetle region. At the same time, we have the largest, and growing, number of exports in the history of British Columbia. It's gone from, on average, a million cubic metres to 5.5 million and headed for record numbers of log exports.

I have heard the same excuses about economics, but I fail to accept the reasoning that somehow China is not a long way to have transportation costs. I'm sure it's true.

I have heard from operators like, I think it is, Kalesnikoff, and I've heard from others, even Interior mill owners, that it depends on the value. Obviously, if lumber goes to 350 bucks or more — $1,000 — the economics change.

Maybe some of those things will be more accessible, but it's also up to government policy. We can either have a race to the bottom and really…. I guess some people would argue that maybe you should close mills and export all the wood to China and let them, with their lower labour cost, put us all out of work, but I'm with you. I think that as British Columbians we need to protect our resource.

We need to protect our resource communities and the jobs that we have now, and it's up to government to put in place regulations to find ways to protect you and your family and all of the other workers that you're talking to that have similar concerns.

It's unacceptable just to wring our hands and say, "Well, it's the economic argument," when we know that the barriers to our supplying the Chinese market are also issues that are out of our control. We shouldn't be put in a race
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to the bottom and just wring our hands and watch our families go by the wayside. It's incumbent upon us to look at fibre supply from all sources.

By the way, just this morning I heard that there is fibre that's almost about the same distance from the Kispiox area that's now being exported. It's about five hours, apparently, to the coast to be exported, and it's about five hours to some of these regions, including Burns Lake. So it's an interesting discussion and one that we should definitely be talking about. It should be in the discussion in terms of timber supply, so thank you for raising it.

B. Stewart: Thanks, Terry. First of all, I wanted to thank you for having the courage to come and just talk to us, because I think it takes quite a bit. You're right in the sense that these are complex issues and they're not easily resolved.

I think that one of the things you see, as somebody that's working and working with the workers here, is the opportunity to produce something with greater value. I think that's one of the things that we really want — to find ways that we can undo the regulations or the bureaucracy that's stopping those things from happening. I think that you're exactly right.

To what Bill just talked about, the big difference in log exports is the price that they're willing to pay in an export market versus the domestic, and that's probably the problem of just two-inch-dimension lumber. It has a certain value, and unless we can find ways to enhance or change that so that we're getting a greater value, really, that opportunity continues to close, and it's really not opening up the market like it should be.

"There should be more jobs here in your community" is really what we should be saying. If there are suggestions that you or other workers have, I think we have until July 20 to receive submissions. We're quite happy to receive them.

I know that in my community we have a mill that only does one-inch lumber that's chamfered. Essentially, they've maintained the 325 people working at that mill throughout the downturn. It's been tough, but the reality is that they get better value for the lumber than what they would if they were just cutting studs. So I think that that's the focus that we need to look at. We do want to find those opportunities, so bring your ideas forward.

J. Rustad (Chair): Terry, once again, thank you very much for your presentation and for talking to the committee. It is much appreciated.

T. Park: I wish this committee the best of luck in trying to get your results across and get results out of all the information that you gather, because you guys have a battle. It's going to be a tough job.

That ends the list of people that have signed up for presentations. What I'm going to ask is if anybody in the audience would like to give us a presentation or for an open-mike period…. I'm not seeing anybody offhand.

Our schedule for this meeting was actually not supposed to start until 6:30 for the presentation, so what I'm going to suggest at this stage is that the committee take a break for dinner, and then we'll reconvene after that to see if there is anybody else who may want to do a presentation. If not, then we'll wrap up at that stage. So at this point, the committee stands in recess.

J. Rustad (Chair): Good evening, everyone. We don't have anybody else on the presentation list, but being that we started a little early, I thought I would do a quick call to see if there's anybody else who would like to do a presentation to the committee here in Houston.

The process here would be five minutes, give or take. If you can say your name and title into the record as well.

I just wanted to maybe touch on something that I kind of heard throughout the previous submissions regarding bioenergy and linking that, really, into community sustainability.

There have been a lot of great projects throughout the province that have been proposed. We've talked about value-added and bioenergy for decades. The only things that have materialized are a few little pellet plants here and there, and we're still left with no value-added.

There have been a lot of interesting projects around the province that have not gone forward due to various reasons of economics or this or that — largely based around cogeneration and tying fibre supply and producing energy. I would like to bring it all together in terms of a community sustainability point of view and how we can slightly diversify communities in the future, especially with regards to cogeneration or B.C. Hydro's call for power and all that kind of stuff. Maybe having that program operate more frequently….

It's often been cited that one Site C dam equals one LNG plant. With all the proposed developments in the province and trying to ramp up the economy in the decade of the north and all this…. It would be nice if the B.C. Hydro call for power would start looking at those cogeneration plants again, maybe focusing them with the mindset of slightly diversifying those dependent communities as a way of trying to help the north and help
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our communities, while advancing forestry and providing that incentive to take waste out of the bush.

Driving through the bush and seeing a burn pile that's three stories tall makes you think about it no matter how many times you drive by it or how many times the numbers don't work out.

I just wanted to touch on that in terms of bioenergy and those kinds of programs that we can use to maybe throw another incentive out there.

Seeing no other presenters, I want to thank everybody for coming out for our meeting here in Houston. Of course, this process is critical for many, many communities that are dependent upon the forest industry, and we will certainly take everything that we've heard into consideration as part of our deliberations.

With that, our next meeting is at 8 a.m., starting in Burns Lake tomorrow. We'll be in Burns Lake until, I think, one o'clock in the afternoon, and then we'll be moving on to Fraser Lake.

So once again, I would like to thank everybody for coming out, and I move the meeting is adjourned.

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1) District of Houston	Mayor Bill Holmberg
	Councillor Jonathan Van Barneveld
Ministry of Forests, Lands and Natural Resource Operations	Josh Pressey

Chair:	* John Rustad (Nechako Lakes BC Liberal)
Deputy Chair:	* Norm Macdonald (Columbia River–Revelstoke NDP)
Members:	* Harry Bains (Surrey-Newton NDP)
	* Donna Barnett (Cariboo-Chilcotin BC Liberal)
	* Eric Foster (Vernon-Monashee BC Liberal)
	* Bill Routley (Cowichan Valley NDP)
	* Ben Stewart (Westside-Kelowna BC Liberal)
	* denotes member present
Clerk:	Kate Ryan-Lloyd
Committee Staff:	Larry Pedersen (Technical Advisor)
	Jacqueline Quesnel (Administrative Coordinator)

Witnesses:	Mike Dunbar
	Bill Holmberg (Mayor, District of Houston)
	Terry Park
	Josh Pressey (Ministry of Forests, Lands and Natural Resource Operations)
	Jonathan Van Barneveld (District of Houston)
	Carl Vandermark

REPORT OF PROCEEDINGS(Hansard)

SPECIAL COMMITTEE ON TIMBER SUPPLY

REPORT OF PROCEEDINGS
(Hansard)

SPECIAL COMMITTEE ON
TIMBER SUPPLY