Predictions for a new political era—forestry trends for 2006

Thisis the 2nd bulletin in a 5 part series concerning the challenges andopportunities expected to present themselves over the coming year. On January24th we published our predictions on energy trends for 2006

We delayed Dogwood Initiative’s annualforecast of upcoming trends because in anticipation that the federal election wouldrealign the federal political landscape. It did.

The question is how that will play outin relation to BC’s magnificent forests in 2006.

So after putting our ear to the tracks,consulting our Ouija board, and asking the spirits for guidance, we would like to share thefollowing analysis and predictions …

Forests

Given the shared contempt of theprovincial Liberals and Harper’s Conservatives for all things environmental, youmay be worried about the implications for BC’s forests.

Relax.

While the minority Conservativegovernment will have profound impacts for British Columbia, particularly on energy, First Nations anddemocratic reforms, they will have less of an impact on forests.

Forestry is a provincial responsibilityunder the constitution and Mr. Harper has indicated he will reduce Ottawa’s participation in such matters as part of hisefforts to decentralize federalism.

However, internationaltrade and taxes are federal responsibilities, so the tax and trade regimes pertinentto forestry may change direction under the new regime in Ottawa.

In our recent discussionof energy trends, we described how the NAFTA proportionality rules (Article605) commit Canada to exporting an increasing percentage of our fossilfuels to the US, even if we face domestic shortages. This should raise serious concernsabout our long-term energy security-although it hasn’t yet.

And energy security isrelated to forests through the linkage suggested by NDP leader Jack Layton.He and others made pre-election suggest ions that Canada should retaliate against Softwood Lumber lossesby imposing tariffs on our energy exports to the U.S.-thus linking their continued access to ourenergy, to the resolutions of softwood.

This populist linkageproposal continues to reappear from various circles. It sounds good, but itwill never happen. Too much money is being made in the oil patch. And toprotect their fossil fuel fattened pocketbooks, the Alberta based core supporters of the Conservatives willnever let the linkage idea get off the ground. And if it did, NAFTAcomplications would scuttle it before it gained momentum.

Softwood

Also, expect little progress on softwood unless Canada will agree to a quota on softwood exports tothe U.S.  

A cozier relationship with the Bush White Housesought by the federal Conservatives may ease some tension, but until Canadianprovinces implement policies that get rid of the subsidies conferred by lowstumpage prices… well, the conflict will continue.

Even if the U.S. is ultimately forced toacquiesce on the current trade disputes before WTO and NAFTA covering theperiod after 2001 (and don’t count on that), the U.S. softwood industry wouldjust re-file a new challenge based on a more recent period and the saga oftrade panels and litigation would begin again.

In fact, the Coalition for Fair Lumber Importsrecently posted a document titled- “Canadian Non-Stumpage Subsidy Programs“. It details new Canadian federal government subsidies alleged to be worth $1.48 billion over fiveyears, plus an additional C$110 million in tax savings.

How longdo you think it would take the U.S.industry to file a new challenge?

Although not widelypublicized, the trade panels consistently rule that Canada subsidizes logging. The confusion arises because they also rule against themethod that the U.S. uses to quantify the subsidy. The facts speakfor themselves.

How can BC claim thereis no subsidy when 36% of the wood logged since 2001 only produced 25 cents percubic meter in stumpage? That means companies are paying a quarter for eachtelephone-pole-sized tree they log.

In seven forestdistricts, over 50% of the wood was sold for a quarter. On the North Coast, home of the Great Bear Rainforest, almost 85% of the wood was soldat the 25 cent rate. And in Haida Gwaii (the Queen Charlotte Islands), home to some of the largest trees on theplanet, 56% of the wood was sold at the minimum rate. The truth of subsidies isobvious in light of these facts.

Don’t be fooled either by the feeble excuse of thebeetle problem. It is not the reasonfor the low rates, for there is no beetle problem on the coast or in Haida Gwaii.

So until Canadianloggers and governments act to end subsidies or agree to a specific quota, expect thesoftwood saga to remain stalemated.

Beetle Hysteria, overcutting andproductivity

You can also expect hysteria aroundbeetles to continue to drive overcutting this year.

Since 2000, Gordon Campbell’sLiberals have increased BC’s annual logging rate by 15.5%.  The BC government has justified thisunsustainable increase by promoting hysteria about the beetle epidemic. As aresult of this unsustainable logging, the futures of many resource-basedcommunities are now, more than ever, in peril.

Increasing loggingrates to control for the beetle epidemic is counterproductive. A review of theresearch suggests that there is little or no evidence to support increasedlogging in response to the epidemic. Once the trees are logged, the beetles havealready been, done and gone.

Despite all the banterabout sustainability, accelerated logging rate places the bottom line ofcompanies over the future of forest-dependant communities, workers, forests andthe critters that depend on them.

While there may be aspike in short-term jobs created by the beetle boom, the legacy will be fewerworkers, fewer jobs and fewer critters as they all disappear for 40, 80 or 120 years waiting for the trees to re-grow.

The beneficiaries ofthe promised softwood and beetle funds from Ottawa will be corporate investors, not workingfamilies. Given the frequent 25 cent stumpage rate collected, it would be better toleave the trees standing and manage the resulting potential fire load.

Despite the rhetoric about “managing results”,the incentives for beetle logging are backwards. The logging industry is usingthe hysteria, the relaxed regulations, and the lack of government oversight tohigh grade the forest.

Logging companies are targeting the best of thebeetle impacted forests and leaving the rest. Between 30% and 60% of theaffected trees will not be logged. Yet many species of trees unaffected by beetleare being logged as “salvage.”

This is a windfall for the companies who arepleading with Ottawa and Victoria to increase their subsidies by changing the taxlaws to allow the depreciation of machinery, computers and other labour savingdevises.

Expect “productivity” to become a mantra for Mr.Harper’s government and their big business supporters.

But don’tbe fooled.

Productivity, which is measured by economic output per unit oflabour, is the code word for efforts to subsidize corporate efforts to replaceworkers with
machines and computers. And when corporations talk aboutgovernment prioritizing productivity, what they really mean is they want morehandouts and subsidies to buy labour saving equipment.

So where is the goodnews despite all these negative undertones?

Leveraging certification

Another area that islikely to become a hotspot is forest practices. The massive deregulation thatoccurred in 2003 is starting to hit the ground.

Expect First Nations toratchet up the lawsuits to reverse this trend, as well as demands that loggingcompanies implement the Forest Stewardship Council (FSC) certification on theiroperations.

The FSC standardsprovide much better protection than current laws. More importantly, FSCPrinciple Three requires Aboriginal consent before logging practices can becertified.

By forcing all loggingto be FSC-certified, First Nations can improve forest practices and createopportunities for shared decision making.

As more and more FirstNations demand FSC, it will create incentives to re-regulate forest practicesto level the playing field. Loggers forced to implement FSC will have anincentive to push government to raise the regulatory bar, or their competitorswill have a distinct advantage. These efforts should begin in 2006.

Undoing deregulation

The provincial government’s attempts to turn almost allimportant decision-making over to logging companies will continue to fail in2006, due to the continuing trend of First Nations’ lawsuits that are chipping away at the rights handedover to logging corporations.

In 2005 the Huu-ay-aht First Nation, the Hupacasath, theHaida, the Gitanyow all succeeded in getting court decisions that challengedvarious aspects of the Liberal forest deregulation. Expect this trend tocontinue as further aspects of the deregulation hit the ground.

We predict that the dumbing down of planning requirements willbecome higher profile; with First Nations demanding more information in plansthan the minimal amount now required by law. Under the new laws, companies nolonger have to identify the exact location or timing of roads and cut-blocks,just general areas of interest. This makes it virtually impossible for affectedFirst Nations and communities to evaluate potential impacts. Lawsuits arelikely to challenge this aspect of the deregulation.

Logging tenures will also become targets as some Tree Farmlicenses and Forest licenses get closer to the deadlinefor their replacement.

Back in 2003, Mr. Campbell’s government attempted toundermine the Haida’s victory in the Court of Appeal (later affirmed by Canada’sSupreme Court) by extending the replacement dates of licenses by five years.The courts required the Crown to consult and accommodate affected First Nationsbefore “strategic level” decisions like licensing occur.

Campbell’sgovernment made it more difficult for First Nations to challenge thesereplacements by changing the laws to postpone replacement dates. It has beenthree years since that move. Uncertainty about the validity of these licensesis creeping closer. Be sure to expect some maneuvering this year as First Nationsbegin flexing their new leverage and challenging certain tenures.

It should be an interesting year. Stay tuned

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