B.C. tinkers with log export rules

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Delegates at the Truck Loggers’ Association annual convention gave a cool reception Thursday to Forest Minister Steve Thomson’s adjustments to log export fees and rules.

Thomson announced a 20-per-cent increase in the export fee on logs exported from B.C.’s south coast and southern Vancouver Island, the main source of B.C. log exports. He also unveiled a two-year trial where the export fee on lower-grade log exports from the mid-coast region will be reduced to $1 per cubic meter, the same minimum rate as applied to Interior logs.

Thomson said only 10 per cent of the annual allowable cut in the mid-coast region is being harvested, and reducing the fee is an effort to generate more logging activity in a remote region with no sawmills. In December, the B.C. government extended a timber revenue sharing agreement with aboriginal communities in the mid-coast, in an effort to assist logging and other resource development in a vast area without treaty settlements.

TLA president Bill Markvoort said the fee increase for the south coast deters export sales at a time when the industry is not cutting all the trees allowed under provincial harvest rules for Crown land.

The TLA estimates that since 2000, 41 million cubic meters of coastal timber has been exported as logs. During the same period, 58 million cubic meters that could have been logged under sustainability rules was left standing.

Rick Jeffery, CEO of the Coastal Forest Products Association, said the changes represent a successful balancing act by the province between supplying B.C. mills and keeping loggers working to supply export markets.

“People should know that for every log that gets exported, between two and three logs end up in front of a domestic mill,” Jeffery said.

NDP forest critic Norm Macdonald said the increased export fee for south coast logs isn’t enough to stem the rising tide of log exports. A ministry example of the new fee schedule shows a fee increase from $7 to $8.40, based on the difference between the export and domestic price.

Thomson also announced an increase of 500,000 cubic meters of timber to be auctioned through B.C. Timber Sales this spring to supply the B.C. log market. Jeffery said that will improve access to logs for B.C. mills, which are taking advantage of improved lumber prices as the U.S. housing market recovers.

Loggers get tax break, bailout fund

Logging contractors compensated for loss of work when the B.C. government bought back forest tenure from big timber companies 10 years ago will get nearly $10 million in federal tax repaid to them, Premier Christy Clark announced Jan. 11.

Speaking to the Truck Loggers’ Association convention, Clark said the tax break was agreed to by federal finance officials after the latest plea from B.C. Finance Minister Mike de Jong.

The tax bill for 300 logging contractors has been a sore point for the industry since the B.C. government undertook a sweeping reorganization of Crown timber licences in 2003. A trust fund paid out $71 million after harvest licences were taken back from large companies to offer community and aboriginal logging projects.

The B.C. government later moved to exempt the compensation payments from provincial income tax, but Ottawa continued to treat the money as taxable income until now.

Clark also updated the audience on her pledge from last year to establish a fund to protect logging contractors who supply timber and don’t get paid when a mill operator goes broke. She said the $5 million announced last year is now available for payments if required, and more money will be added as the government can afford to

Clark’s speech had a campaign flavour, starting when she was introduced to a packed house of logging company executives with an invitation to come back again next year. It was the 70th annual TLA convention, which is traditionally closed with an address by the premier of the day.

The enthusiastic response came after Thursday’s unpopular announcement by Forests Minister Steve Thomson that the government is increasing its log export fees for south coast and Vancouver Island logs by 20 per cent.

Much of B.C.’s growing log export trade comes from that region. Loggers argue that export revenues from coastal forests allow them to bring out a larger volume of other logs to deliver to domestic mills.