ALBAS: Another look at raw logs

By on May 11, 2017
Logs ready for milling at sawmill in Prince George. (Photo courtesy of Canfor).

One of the challenges that all provincial and federal governments face is communicating policy in a manner that is easily understood by citizens. On the surface this may sound simple but sometimes policy can be difficult and timely to explain easily. Further, opposition parties and other interest groups may either intentionally or unintentionally misrepresent policy in manner that may undermine or generate public opposition.

I mention these things as the B.C. election resulted in some issues being raised that require more information to properly scrutinize. In Merritt, one of the largest lumber mills in the area has shut down in the past year, creating significant hardship for many in this community. As forestry is an area that falls into provincial jurisdiction, this became an election issue specifically as it has been alleged by some that the reason this mill closed is related to raw log exports.

In principal most would agree that exporting raw logs to be processed in mills outside of British Columbia should not occur if B.C. lumber mills are closing as a result of a lack of timber supply. This raises the question why has no provincial government of any political stripe actually banned raw log exports once in power.

Part of the answer to this question is understanding how the process around exporting raw logs, technically known as “unmanufactured timber” actually works.

Essentially the process involves three steps. The first step is to acquire an exemption of the requirement that lumber harvested in B.C. is also processed in B.C. Part of the exemption process involves advertising the timber supply in question to be potentially exported on a provincial list of timber for sale. This bi-weekly advertising list means that a domestic B.C. mill operator has the opportunity to buy these raw logs before they could be legally exported from B.C.

If there is an offer to purchase an advisory committee will determine that price is fair market value for all parties involved. If the offer is deemed fair the logs in question will remain in B.C. to be processed by the successfully bidding mill owner. If there is no interest or suitable buyers found the logs will be considered surplus for B.C.’s domestic needs and be eligible for export.

Once raw logs are deemed surplus, an application can be made for a B.C. permit to export the logs in question before moving on to the final stage of the process that is a federal permit for export. Why do some B.C. lumber mills not bid on these raw logs? There are a number of different reasons for this that may depend on specific circumstances. For example, many B.C. mills have become highly specialized in dealing with specific types of timber to produce a unique value added product. In some cases the timber available for sale may not be of the type or quality desired by the mill in question. In other circumstances the transport costs may not make purchasing logs in one area of B.C. economical. Cost may be another factor more so if the raw logs are from a private forest owner or a First Nations community looking to obtain maximum value for the wood.

The intent of my column today is not to defend raw log exports, as ideally I believe governments of all political stripes support increased value added wood manufacturing here in B.C. Forestry remains a critically important industry to many communities in British Columbia and one challenge will be to encourage more investment into value added processing operations with access to a diverse range of markets.

Although raw logs is not an issue of federal jurisdiction I welcome your thoughts on ways government can promote more value added wood manufacturing. I can be reached at Dan.Albas@parl.gc.ca or toll free at 1-800-665-8711.

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