|2003/04 – 2005/06 SERVICE
Ministry of Forests
Since its establishment in 1912 as the Forests Branch, the Ministry
of Forests (also known as the Forest Service) has continued to protect
the public's interest and provide leadership in the protection,
management and use of the province's forest and rangelands.
The Forest Service is the main agency responsible for the stewardship
of 47 million hectares of provincial forestland. In addition, the
ministry provides fire protection services for 84 million hectares.
Managing these provincial forests presents a unique and complex
set of challenges. More than 90 per cent of BC's forest lands are
publicly owned, which means that the provincial government, on behalf
of the public, plays a much more prominent role in the forest sector
than its counterparts in other forestry jurisdictions.
The broad extent of B.C.'s forest lands also means that forestry
is a significant contributor to the province's overall economic
health. Of the province's 63 regional economic areas, 41% rely on
forestry as their principal source of income1. The forest
sector is estimated to account for 22% of total provincial employment
and nearly 25% of provincial gross domestic product2.
The ministry pursues its goals for sustainable forest resources
and benefits in a consultative manner with the public, industry,
and other Crown agencies, while recognizing the unique interests
of aboriginal people.
- The protection of Crown forest and range assets and infrastructure,
and the assistance given to rural communities to combat wildland
fire, requires a coordinated and consultative approach by the
ministry with a great many stakeholders. These include the oil
and gas community, First Nations, guide outfitters, cattle and
range associations, local and regional governments as well as
the forest industry and the general public.
- The ministry works with thousands of license tenure holders
each year, ranging from small area or volume based holdings (e.g.,
woodlots or timber sale licences) to large major licences (e.g.,
forest licences or Tree Farm Licences). In addition there are
over 2,500 individuals and corporations registered as BC Timber
Sales Enterprises (formerly known as Small Business Forest Enterprises).
- More than 1,800 range licence and permit holders for grazing
and hay cutting held by members of the ranching industry, guide
outfitters and commercial recreation operators are involved with
the ministry in crown range management.
- The ministry consults with First Nations regarding forest management
activities on Crown land. In addition MOF supports government's
objectives of establishing working relationships with First Nations
by negotiating interim measures and economic measures agreements
with First Nations and supporting the Treaty Negotiations Office.
- The ministry maintains key partnerships with the Ministry of
Sustainable Resources Management, for co-operation on land-use
planning and land and resource information gathering, and with
Ministry of Water, Land and Air Protection, for coordinating resource
protection and management of habitat and riparian areas.
- Partnerships with local governments, recreation groups, First
Nations, forest companies and others are also expanding as the
ministry pursues partnership agreements for the management of
over 1,800 Forest Service Recreation sites and trails.
This consultative and partnership approach to forest management,
seeks to earn the public's trust as our staff protect and manage
the province's forest and range resources, to ensure that all British
Columbians can look forward to healthy forests and a strong forest
economy now and in the future.
The ministry is proceeding with a new organizational structure
(Appendix 2) to be fully implemented by 2004/05. This includes the
closure of some offices during 2003/04, and will result in three
forest region offices subdivided into 29 forest district offices
and 4 satellite offices. The 6 fire centres will remain. In addition,
a new BC Timber Sales organization with 12 field offices has been
created during 2002/03 and will be managed on commercial principles
and at a greater "arms length" from compliance and enforcement decisions.
The main legislation for which the Forest Service is responsible
is outlined in Appendix 1. The legislation is undergoing significant
revisions in 2002/03 in order to meet new government direction.
Ongoing revisions, including subsequent changes to regulations,
will carry through 2003/04 and 2004/05.
Major emphasis in 2003/04 will be on making an effective transition
to the new Forest and Range Practices Act, to replace
the Forest Practices Code of BC Act.
Highlights of Changes from Previous Plan
The ministry is on track to achieving the key components outlined
in the 2002/03 to 2004/05 Service Plan published last year. Changes
from last year, now included in this Plan, are:
- The implementation of defined forest area management and market
based pricing regimes will be phased in during 2003/04. The phase
in is necessary to facilitate completion of consultation and legislation
processes. The timing of market pricing change is impacted by
Canada/US negotiations on softwood lumber.
- Until a defined forest area management model is fully implemented,
ministry resources will continue to be required to undertake management
activities to assist forest health and timber supply analysis
- Court decisions leading to increased consultation obligations
with First Nations have resulted in changes to Ministry resource
- The emphasis in the management of Forest Service recreation
sites and trails has shifted to partnership agreements where possible,
and user-maintain for the rest.
- Having offered its six seed orchards for lease to the private
sector, and having received no offers at this time, the ministry
will continue its program of propagating improved seed to be used
in reforesting Crown land.
- While the planned closure of certain forest district offices
will be proceeding, following a review of access requirements
for remote areas of the province some staff will remain working
in local communities.
Uncertainty and rapid change are ongoing features of the forest
sector's global environment. In 2003/04, competitiveness issues
are likely to continue to dominate the forest policy agenda, with
forest stewardship, market reform policy change and U.S. market
access, three key themes.
The ministry is faced with numerous challenges in managing the
large public-land based forest resource. The ministry's Service
Plan is intended to address the changing nature of the resource
as well as related social priorities, devolution of certain management
functions to licensees, and collaboration among government agencies.
- Perhaps the most notable concern related to the forest resource
itself is the damage being caused by the unprecedented epidemic
of mountain pine beetle. In 2002, beetles have continued to expand
and affect an area of about 9 million hectares stretching from
Smithers to Cranbrook. The actual area infested is approximately
1.6 million hectares within this larger area. The outbreak is
expected to continue to expand unless climatic conditions cause
a collapse. The main areas of the beetle epidemic are essentially
impossible to control by man-made means; a large-scale program
is underway to harvest infested timber before it becomes economically
worthless. Limited control work is also being conducted on the
edges of the outbreak and in areas where efforts can be expected
to have some success.
- If mountain pine beetle is the issue for the Interior, then
changing forest management approaches is the focus on the Coast.
Coastal silvicultural systems are changing to more closely mimic
natural ecosystem dynamics. The shift towards variable retention
logging has introduced a need to understand the impacts not only
on timber supply, but also on water quality and a wide variety
of flora and fauna.
- Implementation of the Forest and Range Practices Act
will be a major objective in 2003/04. Designed to ensure that
British Columbia achieves high quality forest management and environmental
standards in a streamlined regulatory environment, the code will
take effect April 2003 and will be phased in over two years. As
the new Act replaces previous forest practices code legislation,
there will be a greater emphasis on defining acceptable results
on the ground. Licensees and individual professionals will also
enjoy greater autonomy in deciding how best to achieve specified
- Within government, forest management continues to become more
collaborative in nature. The Ministry of Forests relies on the
Ministry of Sustainable Resource Management (MSRM) as the custodian
of forest resource data and the keeper of standards related to
those data. MSRM also has responsibility for high-level land-use
planning, which involves assessing the merits of competing demands
on the public landbase and deciding what uses should prevail in
each area. Direction from MSRM sets the parameters within which
the Ministry of Forests and its licensees can conduct their business.
The Ministry of Water, Land and Air Protection continues to provide
expertise related to species whose population viability depends
on forest management decisions.
- Implementation of the Ministry's Core Service Review restructuring
is also proceeding. Ministry funding is shrinking by 35 per cent
over three years, and Forest Renewal BC was wound-up at the end
of 2001/02. As a result of restructuring, the relationship between
government agencies and forest companies is changing rapidly and
the Ministry will work with industry and others to share local
forest management responsibilities. By way of example, functions
previously performed by Forest Renewal BC have been replaced by
an array of programs that are part of the Forest Investment Account
established in 2002/03. More than half of the funding appropriated
to the FIA will be distributed among forest companies so that
they can voluntarily undertake a variety of forest management
activities formerly initiated and managed by government staff.
- Finally, the rate of harvesting throughout most of the province
continues to be specified through the chief forester's determination
of the allowable annual cut for each of the province's 71 management
units. However, the scope and complexity of timber supply analyses
and AAC determinations are increasing significantly as the ministry
strives to better portray the dynamics of forest habitats and
Revitalizing the Forest Sector
Implementing market-based policy reform will be a focus for the
ministry during 2003/04. The purposes of this reform are to create
the framework for a competitive, dynamic forest industry and to
maximize the contribution of the forest sector to British Columbians
standard of living.
There are two complementary components to market-based policy reform:
- Market based pricing will ensure that the public receives fair
value for its resource. It will also mean that an efficient company
has the opportunity to earn a sufficient return over the business
cycle to justify reinvestment. Finally, it will fairly reflect
the differential economics of different stands of timber.
- Complementary policy changes that will free timber to be harvested
and flow when and where it will be put to it's highest and best
use within British Columbia.
The Ministry will also focus on the implementation of market oriented
policy change initiatives announced in 2002/03.
U.S. Market Access
The softwood lumber dispute with the United States is also a major
issue for the British Columbia forest sector.
- Expiry of the Canada/U.S. Softwood Lumber Agreement on March
31, 2001 was quickly followed (on April 2, 2001) by the filing
of countervailing duty and anti-dumping cases by the U.S. Coalition
for Fair Lumber Imports. B.C. arguments that the provincial lumber
industry is not subsidized had no effect on U.S. actions. In the
summer of 2001, the U.S. Department of Commerce introduced a preliminary
countervailing duty, followed in the fall by a preliminary anti-dumping
- Despite extensive discussions and negotiations about the possibility
of a policy-based solution to the softwood lumber trade dispute,
no mutually acceptable agreement could be found. On March 22, 2002,
the U.S. Department of Commerce announced final countervailing
and anti-dumping duty amounts averaging 27 per cent. The U.S.
International Trade Commission then finalized this result. Cash
deposits for estimated duties went into effect on May 21, 2002.
- The government of Canada has launched both World Trade Organization
and North American Free Trade Agreement challenges to the U.S.
softwood lumber duty determinations. However, both processes will
take time to complete. For example, the WTO Final Determination
of Subsidy panel is not expected to complete its work until August
- In the meantime, the high duty level makes B.C. forest products
less competitive in the U.S. and B.C. forest companies less resilient
to any declines in forest product prices or changes in the Canadian
Prices, Costs and Performance
B.C.'s forest-based industries produce an array of wood products,
but are dominated by the production of lumber, pulp and paper. These
commodities are sold into world markets. The ministry's market-based
policy reform is focused on supporting a globally competitive forest
industry while ensuring that the public receives fair value for
In 2001, the last full year for which data is available, B.C. forest
product exports totaled $14.6 billion and accounted for 47 per cent
of total provincial exports and approximately 8 per cent of world
exports of forest products. Late 2002 results (year-to-date November),
indicate that total forest product exports for 2002 will be below
2001 levels due to weak pulp and paper markets.
The primary market for B.C. products is the U.S., which imported
65 per cent of B.C.'s total provincial forest product exports in
2001. Japan is the second-largest market, accounting for approximately
16 per cent of exports3.
Exports by Destination
The forest sector's reliance on exports means that world prices
are an important determinant of the health of the sector as a whole.
Generally, prices were down in 2001 and this trend continued into
2002. The price of spruce-pine-fir (SPF) softwood lumber 2x4s, the
key product of the Interior lumber industry, fell from an average
of US$255/thousand board feet (mfbm) in 2000 to US$249/mfbm in 2001,
a drop of 2 per cent. In 2002, softwood lumber 2x4 prices fell by
nearly 6% to an average of US$235/mfbm4. The softwood
lumber tariff, and changing U.S. economic conditions have undoubtedly
contributed to the decline in lumber prices.
The price for hemlock baby squares, a key product for the Coastal
industry, was relatively stable in 2001 with prices up over year
2000 results. Average prices increased slightly again in 2002 to
an average of US$597/mfbm4. However, Japanese demand
is below 1990s levels and is likely to remain so given Japanese
economic performance and shifts in product demand.
Market demand for northern bleached softwood kraft (NBSK) pulp
weakened markedly in both 2001 and 2002. In 2002 NBSK pulp averaged
US$463/tonne, down by 32 per cent from the 2000 average of US$681/tonne5.
In 2001, newsprint prices increased by 4 per cent with average
prices reaching US$588/tonne for the year. This strength was not
maintained. Average newsprint prices for 2002 were US$468/tonne,
a drop of 20 per cent. However, some analysts suggest that newsprint
prices have bottomed out6.
Total Variable Costs
Timber Scale Billed
In addition to world prices, production costs are important to
the provincial forest sector. For a cyclical, competitive, mature
industry to be successful in the global marketplace, costs must
be kept low.
In 2001, variable costs — or costs that vary directly with
output — increased slightly on the Coast, but declined in
the Interior. The variable cost category includes costs of harvesting,
labour and supply.
For a variety of reasons, including the diversity of wood types
and terrain, the B.C. Coast has significantly higher lumber production
costs overall than the Interior. High production costs, changing
markets, and environmental pressures continue to exert significant
restructuring pressures on the Coast.
B.C. total harvest levels (Crown and private land), as measured
by timber scale billed, were down somewhat in 2001, falling from
77 million cubic metres (m3) in 2000, to 72 million m3. Despite
trade uncertainty and weak lumber prices, harvest levels rose slightly
in 2002 to 73 million cubic metres.7
The general weakness in the sector was also evident in the employment
and export numbers.
Employment levels in all sub-sectors of the industry dropped in
2001, with the largest fall occurring in the solid wood products
category. Total direct employment in the industry was 85,041 positions,
a drop of 12 per cent from 2000.
Forest sector employment levels have continued to weaken in 2002.
As of October, forest industry employment is 20 per cent or more
than 17,000 jobs below comparative 2001 levels with all sub sectors
posting significant declines.8
Exports by Forest Product
Total British Columbia forest exports dropped from $16.3 billion
in 2000 to $14.6 billion in 2001. Reduced pulp shipments accounted
for much of the change. Based on information from eleven months
of the year, similar results are expected for 2002. The pulp and
paper sector has remained weak with the result that pulp and paper
product exports are below 2001 levels. Solid wood exports may decline
Supply and Sustainability
While demand-side issues have been centre of attention for the
past few years, any economic scan of our forest sector is incomplete
without an examination of timber supply. Two supply-related issues
that will affect the provincial forest sector on a long-term basis
- the world supply of timber, and
World Timber Supply
World timber supply is not expected to be a constraint on global
forest product production in the foreseeable future.
It is expected that the availability of wood fibre will improve
significantly over the next 20 to 25 years, as the commercial production
of timber becomes increasingly concentrated on managed forests and
plantations10. While timber inventories in global "native"
forests are expected to decline moderately, "non-native" plantation
inventories will more than compensate for the loss.
Both economic and environmental factors are responsible for reshaping
the world's fibre supply. From a production prospective, non-native
plantations are generally more productive than their native counterparts,
and many countries have actively encouraged investment in this type
of forest resource. Simultaneously, there has been increasing international
pressure for the conservation of "native" forests due to concerns
about deforestation and forest degradation. Indeed, globally, B.C.'s
forest resource is increasingly unique. For example, B.C.'s remaining
old growth Coastal rainforest represents approximately 25% of the
remaining coastal temperate rainforest worldwide.
By 2025, some experts predict that fibre from "non-native" plantation
inventories will represent one-third of the operable growing stock
and supply more than half of global wood fibre needs. In terms of
wood supply, this means that Asia, Central America, South America,
Australia and New Zealand will become increasingly important wood-fibre
suppliers. From a B.C. perspective, this likely implies increased
competition in world forest product markets and increased pressure
for the conservation of increasingly rare forest types.
Certification is increasingly seen as a means of sustainable resource
management and excellence in forest stewardship. It is expected
that, over time, certification will become more of a prerequisite
for access to global forest product markets.
Virtually every major B.C. forest company has either achieved or
is pursuing third-party certification.
First Nations Land Claims
The uncertainty associated with unresolved First Nations land claims
continues to affect the provincial forest sector. Recent court decisions
have reinforced the importance of consultation with and accommodation
of First Nations interests. It will take time and experience to
adequately sort out the roles and responsibilities of government,
industry and First Nations in this regard.
It is expected that as land claims are resolved and treaties are
put into place, there will be increased stability for forestry operators
on the land base. In the meantime, the Ministry will continue to
consult with First Nations on forest management activities in order
to meet its legal responsibilities to First Nations.
The B.C. forest sector will continue to face the challenges associated
with a dynamic and ever-changing global environment. Only a sector
that is outward looking, globally competitive, environmentally responsible,
and locally accountable will be able to succeed. The ministry's
ongoing task is to ensure that an appropriate policy, regulatory
and legislative framework is in place to support these objectives.
Ministry of Forests (Forest Service) Vision:
Healthy Productive Forests
The province of British Columbia is renowned for its rich and diverse
forest and range resources, more than 90% of which are publicly
owned. These resources are a major source of environmental, economic
and social benefits, contributing to a high standard of living for
individuals and communities across British Columbia. Healthy, productive
forests are the cornerstone from which all other forest benefits
are possible, including continuous generation of substantial revenue
to the Crown.
The Forest Service, as the agency responsible for protecting and
managing these resources, will focus on ensuring that the health
and productivity of the province's forest and range resources are
maintained now and in the future. Healthy forests include a diversity
of ecosystems that support a full range of forest products, businesses
and other opportunities.
Forest Service Mission:
Protect and manage our public forests for the sustained benefit
of all British Columbians.
Since its establishment in 1912, the Forest Service has been mandated
to protect and manage the public's forest and range resources. We
have recently adopted the motto "Stewards of Our Forests"
to reflect this mandate. Other roles have come and gone, but the
stewardship role continues to be the foundation of our organization
and is reflected in our mission statement. The key responsibilities
for the Forest Service in undertaking this mission in the future
- protecting and managing the province's forest and range resources;
- providing the basis for a globally competitive forest industry
with high environmental standards; and,
- maximizing net revenues to the Crown.
We will carry out this mandate in co-operation with our other public
and private sector partners.
To fulfil this mission, the establishment of clear policies and
scientifically-based standards to protect the province's forest
and range resources are required to ensure a full range of benefits
are available from these resources on a sustainable basis. The Forest
Service will continue to monitor and enforce standards for the forest
and range practices carried out by licensees. At the same time,
we will implement pricing and selling policies aimed at making the
province's forest sector more competitive in global markets, and
ensuring the Crown receives fair value for the use of its forest
and range resources.
Values and Ethics
In carrying out our mission and day-to-day activities, the people
of the Forest Service share the following core values and ethics:
- Respect for the forest and range resources, our clients and
- Service excellence in fulfilling our public trust.
- Accountability for our decisions.
- Openness and adaptiveness to new ideas and knowledge.
- A Can-Do attitude for getting the job done and done right.
- Our Sustainable Use ethic is to manage forest development to
meet the current needs of British Columbians without prejudice
to the needs of future generations.
- Our Stewardship ethic is to care for the health and sustain
the beauty and natural functioning of the province's ecosystems
by managing forest and range lands to maintain natural diversity
across the landscape.
- Our Public Service ethic is to provide a continuous flow of
benefits from forest and rangelands for the physical, cultural
and spiritual well being of British Columbians.
Linking the Strategic Context with the structure of the Service
The Forest Service has three long-term goals to provide overall
direction in achievement of its mission and vision. The ministry
has established seven core business areas to structure the objectives,
strategies and performance measures of the ministry. Each of the
Ministry's seven core businesses is linked to at least one of the
three goals. Two core businesses, Compliance and Enforcement and
Forest Investment support two of the three goals.