Last week, Premier Gordon Campbell announced upcoming implementation of BC’s pseudo-market based pricing scheme. He announced that as of Feb. 29, timber prices in the coastal industry will be based on auctions of cut blocks of B.C. timber. The BC government intends to expand the new system to the BC’s Interior within a year.
Despite the standing ovation he received from independent forestry contractors belonging to the 500-member Truck Loggers Association, the changes will not begin the troubled coastal forest sector’s journey back to prosperity.
The scheme is supposed to end complaints from U.S. producers that the old stumpage system subsidized B.C. exports, which account for about half of Canada’s $10-billion annual softwood sales into the American market. However, Canadian press has not reported that these reforms are virtually identical to those repeatedly rejected by U.S. negotiators as inadequate throughout the softwood negotiating sessions.
The scheme, developed behind closed doors by industry and government policy wonks, is intended to create the illusion of a market without any real competition. The plan is to auction 20% of coastal Crown timber and the prices used to determine stumpage rates of the 80 per cent logged by major tenure-holders. In fact, it is expected that the cut blocks put out for auction will quickly be controlled directly or indirectly by the same few companies that now control the majority of the annual cut. There will still be no place in BC where innovative entrepreneurs can buy or sell trees. They will remain at the mercy of the same large tenure holders that control virtually all BC wood supply.
Given the ingenuity of BC loggers to manipulate the stumpage and tenure systems, it is clear that the auction based scheme will not create a market based system that will reflect the true value of BC’s precious timber. But then that was never the intention. In fact, quotes from many industry spokespeople reflect their belief that log prices will fall under the new scheme – exacerbating the existing giveaway of BC’s public resources.