Forest tenure reform a Crown land grab?

By Briony Penn, May 2014

Are the BC Liberals trying to take another step towards privatization of public forests?

On April 1, Forests, Lands and Natural Resource Operations Minister Steve Thomson announced that “A comprehensive public engagement process on converting some volume-based forest licences to new or expanded area-based tree farm licences will take place over the next two months.”

Sounds good in theory but it is fitting that the announcement was made on April Fools Day. British Columbian’s have been waiting 13 years to have a conversation about the future of BC’s Crown lands (94 percent of the province) and we are now presented with 60 days to comment on a decision that has already been made in the backroom. As one resident of Grand Forks wrote in a blog: “This is the government telling the public what they are going to do and inviting feedback. True consultation starts with an open question like ‘What is the best way to govern our public forest resources to ensure sustainability for future generations?’”

How did we end up here? Let’s go back 13 years to the day when then-Forest Minister Mike De Jong walked into a meeting of silviculturalists and told them that BC’s Crown forests would be “unrecognizable” when he and the Liberals were finished with them. Their end game was to privatize as much as they could of our 60 million hectares of forest, though that was never explicitly stated. In fact, even though they claim to have spent a billion dollars on planning and mitigating forest damage from climate change, no plan for the future has been drafted or presented to the public, so that the owners of this forest—British Columbians—can decide whether they like it or not. 

Despite the lack of any public plan, since 2001, the BC Liberals have set up the conditions to allow for de facto privatization of public forest lands. 

First they deregulated how we look after the forests and pushed control of the management of our lands into the private sector. They replaced laws with a failed concept of “professional reliance.” Professional reliance relies on a healthy independence between the profession and their major corporate clients; there are no laws to fall back on should these corporate clients choose to ignore their foresters’ advice. 

The Liberals also stripped the Chief Forester of all powers and budget including keeping an inventory of what is actually on our Crown lands and the extent of the damage from climate change-induced beetle infestations and fires. 

Then they stripped the Forest Service down to bare bones—more than half the jobs have disappeared, particularly those of scientists and people on the ground watching what is going on. Field inspections, for example, that provide oversight on forest practices, were slashed to the equivalent of eight people a year trying to cover the whole province. There are more people weeding Butchart Gardens than we have watching our entire public forests of British Columbia. 

The Liberal government also slashed the silvicultural program by 90 percent until public outcry nudged the budget back to 40 percent. 

Twenty district offices were closed including Prince Rupert’s which guarded one of the world’s most important forests for fisheries, biodiversity, carbon sequestration, cultural diversity and tourism. I could go on. 

Meanwhile, a secret plan was being set in motion by experts in liquidation—corporate distressed asset managers “focused on shareholder value creation.” Mega-companies like BAM (Brookfield Asset Management) and TAM (Third Avenue Management) started quietly buying up majority interests in distressed logging companies when they hit rock bottom. They then worked—successfully—to enhance their value through political pressure for deregulation. 

These corporations hope to soon convert their holdings to secure leases—which is what the April Fools’ announcement is all about. 

Their final vision sees these lands stripped of assets, then rationalized into categories of real estate, biofuel plantations (using GMOs), other industry interests (fracking, pipelines, etc). After that, they’ll flip, throwing the guts and feathers to the Indians. 

Their incredible success in carrying out this plan with hundreds of thousands of hectares of heavily subsidized private forests on Vancouver Island has positioned them well to move on to the bigger prize of Crown lands. 

This month, as mentioned, they are at the “tenure reform” stage of their plan. The companies lobbied behind the scenes for a decade for their idea of what this means—changing volume licences (or TSAs where they just get the trees) to the more lucrative area Tree Farm Licences (TFLs), where they get everything. Anthony Britneff, ex-forest service forester says, “these tenures are like the granting of fiefdoms in which the company can strip and sell whatever they want without any requirement to invest in local infrastructure and to manufacture timber locally as a condition of holding tenure. There is no social contract in the public interest.” 

The leverage to get to privatization from the area-based tenure stage is through compensation. Under this new tenure, the companies will be compensated if the allowable annual cut is reduced by more than five percent as a result of Crown land deletions by any pesky First Nations or citizens. Once the compensations get too high, the government can play the cost and liability card and sell some of the lands, removing them from public control forever.

Last year, after the Burns Lake sawmill fire, Premier Clark tried to sell the idea of tenure reform as a way to leverage money for the new sawmill. But there was a big push back from anyone who didn’t have investments in the big companies and subsidiaries: West Fraser, Canfor, Interfor, Western Forest Products and Tolko Ind. There was also an election, so the Liberals waited, collecting donations from the aforementioned to take them to a victory. Clark is now trying again to implement tenure reform, acting on a mandate from her election sponsors. BC’s history with tenure “rollovers” is fraught with nepotism, cabinet fumbling and cover-ups (some may remember 1955 Forest Minister “Honest” Bob Summers), and the future may well include more of the same.

Forest Minister Thomson promises, “We will ensure that there is a broad discussion…we believe and continue to believe that this is one tool in the toolkit that can have benefits.” The benefits that Thomson asserted were that forest management is better in TFLs than volume-based TSAs. After being repeatedly asked by Opposition Forest Critic MLA Norm Macdonald to produce evidence of this, none was produced. 

Anthony Britneff points to what he believes is evidence to the contrary: TFLs generate higher fines for waste, export more raw logs and jobs, and show no greater incentives to invest. The Minister has no means of recording relative investments in silviculture between the two tenures because the data isn’t available. Finally the leaseholders aren’t required to finance inventory, reforestation, roads or fighting wildfires, so the public is still on the hook for funding these activities. Others have suggested that TFL “rollover”is another case of privatizing the profits and socializing the costs. 

Last year, Focus reported on a leaked memo (dated April 2012) to one of the companies suggesting that once the new leases are drawn up the government will expand the annual allowable cuts far beyond what the region can sustain, leaving it decimated even by their own internal accounts. They would get rid of all the old growth timber rules and wildlife management rules to free up what’s left of the ravaged forests. The memo also drew attention to the vulnerability of government to legal claims from First Nations and citizens alike, hence the clause on compensation. 

BC Liberals said last July that they would broaden the consultation on this issue but nothing happened. Meanwhile, a bullish timber market emerged and the BC Liberals have to deliver to their big donors—donors that have dropped well over $2 million into party coffers in the last 7 years. BAM has just offered 46 million of their shares in one of their logging companies (Western Forest Products) that they scooped when the asset was distressed a few years back. Forestry is bouncing back as markets for raw logs increase south of the border. 

Besides hearing condemnation of the proposed tenure reform from communities, First Nations, forest workers and environmental activists, the Minister also recently heard from a rather unlikely critic: Canfor, which donated $543,000 dollars to the BC Liberals coffers over the last eight years (hedging its bets, it also donated substantial amounts to the NDP). 

In an April blog post, Canfor CEO Don Kayne confirms that Thomson’s assertions about the benefits of area-based tenure are not true: “It is economics that drives low levels of intensive silviculture…not the form of tenure.” Then he goes on to challenge two more assertions of the Minister: “[Thomson’s] discussion paper has no specific criteria around who will be invited to apply for conversion of their volume-based tenure. The list of stakeholders invited to provide comment appears to be so thin as to be problematic. Only two major forest companies were on the list, and this decision has the potential to impact major tenure holders most severely. As British Columbia’s largest forest products manufacturer, Canfor is absent from this list.” 

Finally, Kayne argues, it appears that the compensation agreements might not be as smooth as planned “as in any conversion agreement, there is bound to be a take-back provision. Our view is that any potential benefits from increased supply security would be offset by the damage to our industry’s social licence and whatever take-back provision would be imposed.” 

He concludes with this statement: “To Canfor, the public opposition to this proposal is a deal breaker. It risks setting forest companies against our public landowners and giving the impression that area-based tenures are an attempt by our sector to assert more control over a public resource.” Kayne is worried because every single forest labour union in the province has concerns. 

The BC Liberals have invited citizens to participate in a public discussion on the expansion of area-based forest management until May 30 (www.engage.gov.bc.ca/foresttenures). Ideally, they will hear that we want a proper discussion that leads to a comprehensive plan for our forests in the 21st century—one that addresses governance issues, First Nations sovereignty, the quality of our water, the protection of our wildlife, climate change and forest carbon sinks, real jobs not exported jobs, community benefits not corporate shareholder windfalls. It’s worth a try because the political fortress is showing signs of weakness from within.

Briony Penn PhD has been reporting on the environment since her first article in The Islander in 1975 on Garry oak meadows and has been a columnist in Victoria publications since 1993.