Canada's Forest Industry Cutting Wood and Carbon Emissions - Grassroots - Truck Loggers Association
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[ INSIDE What is the Interior Forest Sector Renewal Initiative? ]
www.tla.ca
Winter 2020
Canada's Forest
Industry Cutting Wood
and Carbon Emissions
Grassroots
Convoy Seeks Results
PM # 40010419
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2 Truck LoggerBC Winter 2020
WINTER 2020 Volume 42 Number 4 www.tla.ca
CONTENTS
36 43 49
Columns & Departments Cover
7 TLA President's Message 54 Canada's Forest Industry Cutting
Looking Back to Look Forward Wood and Carbon Emissions
Mike Richardson Jean Sorensen
8 TLA Executive Director's Message
Making Life Better Features
David Elstone
10 Southern Interior Perspective 21 BC Government's Optimistic Vision for Change and
We're Going to See John! Transformation
Premier John Horgan
Todd Chamberlain
22 Strengthening the BC Forest Sector’s Resiliency
13 North West Perspective Minister Doug Donaldson
Solutions for the North West 23 77th Annual Truck Loggers Association
Rick Brouwer
Convention + Trade Show
14 Northern Interior Perspective 32 TLA Forestry Event Calendar 2020
Impact of Proposed Change to Forest Utilization 36 Forestry Community: Revelstoke
Paul Schuetz
Robin Brunet
17 Legal Viewpoints
39 Industry Leaders' Vision for the Future
Surrogate Bidding
Jeff Waatainen of the Forest Industry
Ian MacNeill
19 Business Matters 43 What is the Interior Forest Sector
What You Need to Know About the BC Logging Tax Renewal Initiative?
Chris Duncan Ian MacNeill
34 Safety Report 46 Grassroots Convoy Seeks Results
Tackling the Issue of Phase Congestion Adrienne Tanner
Budd Phillips 49 Old Growth Roots Deep into BC's Coffers,
Economy and Communities
Jean Sorensen
Cover Photo: Courtesy TLA staff
Winter 2020 Truck LoggerBC 3
The Truck Loggers Association Interior Logging Association
2019 Executive & Directors 2019-2020 Board of Directors
PresidentMike Richardson Chairman Randy Spence
Vice PresidentBill Nelson First Vice Chairman Len Gudeit
Past President Jacqui Beban Second Vice Chairman Ron Volansky
Executive DirectorDavid Elstone Past Chairman Reid Hedlund
Industrial DirectorsSig Kemmler Directors Guido Claudepierre
Dave McNaught Dennis Cook
Jen Norie John Drayton
Clint Parcher Creole Dufour
Mark Ponting Randy Durante
Aaron Service Frank Etchart
Barry Simpson Sue Hagarty
Dorian Uzzell Scott Horovatin
Matt Wealick Lennard Joe
Associate Directors Tyson Lambert Hedley Larsen
Tim Lloyd Don Mathews
Brian Mulvihill Shawn McIver
Carl Sweet Tim Menning
Lawrence Van De Leur Shari Smaha
Editorial Board Jacqui Beban General Manager Todd Chamberlain
Chris Duncan Administration Nancy Hesketh
David Elstone
Jennifer Kramer Interior Logging Association
Brian Mulvihill 3204 - 39th Avenue
Mike Richardson Vernon, BC V1T 3C8
Dorian Uzzell Tel: 250.503.2199 Fax: 250.503.2250
E-mail: info@interiorlogging.org
Website: www.interiorlogging.org
WINTER 2020 / VOLUME 42 / NUMBER 4
Editor Jennifer Kramer
Contributing Writers Rick Brouwer Ian MacNeill
Robin Brunet Budd Phillips
Todd Chamberlain Mike Richardson
Doug Donaldson Paul Schuetz
Chris Duncan Jean Sorensen
David Elstone Adrienne Tanner
John Horgan Jeff Waatainen
For editorial information, please contact the Truck Loggers Association:
TUG & BARGE
Tel: 604.684.4291
Email: trucklogger@tla.ca
For advertising, please contact Advertising In Print:
Tel: 604.681.1811
Email: info@advertisinginprint.com
Truck LoggerBC magazine is published four times a year by the
Truck Loggers Association, with content and support from the
Interior Logging Association and the North West Loggers
Association. Its editorial content seeks to reflect issues facing
the industry and to provide readers with current information on
BC’s forest industry. All rights reserved.
Advertising Sales & Design Layout office:
Advertising In Print
200 - 896 Cambie Street, Vancouver, BC V6B 2P6
Tel: 604.681.1811 Fax: 604.681.0456
ice.
Goo o o d Se rv
d Company. Good People. G
Publication Mailing Agreement No. 40010419.
For subscriptions, contact office@tla.ca or 604.684.4291.
Send change of address notices
and covers of undeliverable copies to:
The Truck Loggers Association
Suite 725-815 West Hastings Street Tel: 604.684.4291
www.westcoasttug.ca Vancouver, BC V6C 1B4 Fax: 604.684.7134
E-mail: contact@tla.ca Website: www.tla.ca
4 Truck LoggerBC Winter 2020
from the editorial Board deSK...
H appy New Year and welcome to the Winter 2020
issue of Truck LoggerBC magazine. Be sure to
preview the information provided about the TLA’s 77th
implementing new policies. We also explore what you
need to know to understand about surrogate bidding and
the potential risks involved.
Annual Convention and Trade Show, to be held January Following the “What is Old Growth” article in our
15–17 at the Westin Bayshore in Vancouver. As an indus- Fall 2019 issue, we continue to take a deep dive into old-
try currently in crisis reacting to significant changes in growth logging to provide insight to how deep rooted it is
forestry policies and shifting markets, this year’s theme, in BC’s economy and communities. We also take a deep
“Vision 20/20” covers important industry issues to pro- dive into how the forest industry is cutting carbon emis-
vide a vision into the future. sions and why forestry is considered the greenest work-
In this issue, we speak with industry leaders, Charlene force in Canada.
Higgins, Stephen Hunt, and Susan Yurkovich to get their Once again, we have included the annual 2020 Forestry
perspective on where the forest industry is currently, Event Calendar in the centre spread. I encourage you to
where it needs to go and what we need to do to get there. remove it and keep it on hand for the remainder of the year.
Following September’s BC Logging Convoy, we pro- I’m looking forward to connecting with many TLA
vide the inside story of what motivated two Interior members at the upcoming Convention. If you haven’t al-
contractors to rally together more than 400 logging ready, be sure to register today!
trucks to drive to Vancouver in an effort to get govern- As always, I trust you will find this issue insightful
ment’s attention. and informative. If you have any feedback or comments,
In “Forestry Community—Revelstoke,” we take a look please contact our director of communications, Jennifer
at the importance of the town’s community forest, the po- Kramer, at 604-684-4291 (extension 2)
tential impact of the caribou recovery plan, and how it is or by email at jennifer@tla.ca.
embracing its evolution from not only a resource town to
becoming a tourism destination as well.
We explore the government’s recently announced In-
terior Forest Sector Renewal initiative in relation to the
previous Coast Forest Sector Revitalization initiative and Dorian Uzzell
the potential for unintended consequences if it results in Editorial Board Chair
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Winter 2020 Truck LoggerBC 5
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6 Truck LoggerBC Winter 2020
Mike Richardson TLA President’s MESSAGE
looKiNg BacK to looK forward
H aving a vision is important. A
large cornerstone of the NDP
government’s vision for the forest in-
Directors and energetic TLA staff. One
key aim was to provide member value by
growing our membership in the north-
An aware and engaged membership is
what makes this Association strong. I
would like to acknowledge all of those
dustry is to increase logs to domestic ern Interior. The strategic impact of this who have contributed their time to help
manufacturing and increase the value- allowed us to state that we represent the advance the interests of the TLA mem-
added sector, which resonates strongly sector across the province, which came bership at so many tables where the TLA
with the general public. And in many with increased responsibility. Acknowl- represents the contracting community.
respects, this vision conceptually edging our Interior membership by en- Advancing support for relationships
should align with the TLA members suring we provide member value wher- with First Nations has been another
as long as it results in the same or in- ever our members operate has been vital strategic objective, which has even
creased amount of timber harvesting. to fulfilling our objectives. greater urgency and relevance than ever
Unfortunately, over the last six Last spring, the TLA held its first before. As we seek to understand where
months and for the near future, tim- membership networking event in the Bill 41’s support of United Nations Dec-
ber harvesting is far from seeing any Interior in Prince George. Our advocacy laration on the Rights of Indigenous
increases. Our industry—coastal and has resulted in many new Interior con- Peoples will take us, the TLA has sought
interior—is in crisis. There is an im- tractors joining over the last two years, to develop tools and raise awareness of
mense amount of suffering and frus- including a show of support from three First Nations issues in the context of
tration in the forestry sector today; the new Interior community members. I be- forestry. This has been valuable work
TLA Board of Directors and myself are lieve this shift to encompass the broader and I hope the momentum continues.
empathetic to it and are indeed experi- provincial level will be instrumental in The role of the TLA president is re-
encing this first hand as business own- advancing our members’ interests. warding and challenging. I would like
ers ourselves. On such a somber note, The biggest advocacy issue has been to express my gratitude for the support
this will be my last letter as president of the Contractor Sustainability Review that I have received from my fellow ex-
the TLA with my two years in this role (CSR) and we have had significant suc- ecutive, with Bill Nelson as vice presi-
coming to an end this month. cesses in getting government to address dent and Jacqui Beban as the immediate
So much has quickly changed since it, although the changes we hoped for past president. Jacqui’s long tenure with
we finalized the TLA’s updated strategic have not been brought to completion as the TLA as a director comes to an end
plan when I became president in mid- of yet. this January. With the natural progres-
2018. Market weakness was growing, I am pleased the TLA led the way sion as vice president to be elected to
but the impacts to timber supply, the in getting the Hourly Equipment Rate the role of president, I know the TLA
enduring coastal strike and the depth of Sheet project launched and completed will be well guided by Bill through the
the market change were hard to foresee. in partnership with TimberTracks™ and rough times ahead.
Nor was it clear how the government’s support from the Interior Logging As- The TLA has followed its strategic
own vision for the sector would mani- sociation. This document should rest plan and made course corrections along
fest itself with the Coast Revitalization in the back pocket of every contractor. the way. The government has their plan
Initiative, the soon-to-be-expected re- Knowing what your equipment is worth and I hope Premier Horgan can see
sults of the Old Growth Strategic Re- and having that reference is instrumen- that how they are attempting to achieve
view and Interior Forest Renewal ini- tal in advancing a sustainable contract- their vision requires course correction
tiatives. Fortunately, the TLA’s strategic ing community in this province. too, because frankly, at this time, unin-
plan and vision continue to remain rel- Our advocacy has materialized with tended consequences have arrived.
evant through all this turmoil and has continuous efforts to keep the member-
kept our efforts on course. ship engaged with calls for action, from Mike Richardson, President, TLA
I am proud of what has been accom- keeping you informed on CSR develop- Tel: 250-203-2649
plished over the last two years and I ments, to supporting your submissions Email: mike@tsibass.ca
am thankful for a supportive Board of on the Old Growth Strategic Review.
Winter 2020 Truck LoggerBC 7
David Elstone TLA Executive Director’s MESSAGE
maKiNg life Better
T he tagline for the BC government’s
2019 fiscal budget, “Making Life
Better” might be missing the mark with
As I write this in mid-December, the
coastal logging community descended
on the grounds of the BC legislature, yet
That vision seems confounded when
it relies on a working forest, yet there
seems to be relentless initiatives such as
a reported shortfall of $133 million for again, in an attempt to express their frus- species-at-risk reviews, caribou habitat
the second quarter of their fiscal year due tration with government over the pro- set-asides, land use planning processes,
to reduced revenues in the forest sector. longed outage from the USW/WFP strike and an old growth strategic review, which
With even less timber harvesting since and the state of the forest sector. We were all could potentially reduce the amount
October, the impact of a forest industry pleased to hear Premier Horgan’s imme- of working forest, increase costs for in-
in crisis should finally be landing square- diate response stating government will be dustry, and therefore reduce jobs. Why
ly within the halls of the BC legislature. looking at ways to assist those affected. aren’t we meeting with government to
Along with it, should be the message that All that to say, timber harvesting discuss how to expand our working for-
the forest sector is integral to the liveli- contractors are fed up as they watch est, reduce costs, and increase jobs?
hoods of those who work in our forests their way of life, their livelihoods, and The general sense of the TLA mem-
and their communities. their communities suffer from relent- bership is that government is working
Large budget shortfalls from a spe- less hits to their industry. Life is not against the industry rather than support-
cific source such as the forest sector better for them. ing it. My recommendation is to have a
makes headlines. As of late, so too has Since July 2019, a canary in the coal vision, but how it is achieved is just as
the frustration of timber harvesting mine indicator of potential problems has important as the end goal. An industry
contractors and their workers on nu- been BC Timber Sales’ 13 no-bid timber in convulsions is a telling signal. Take a
merous occasions. sales on the Coast, which is an abnormal phased-in approach, which helps to react
Social media has been highly effective number. Three of those no-bids were re- to unintended consequences. Learn from
in fueling a grassroots uprising. The BC peated and again failed to sell. What we how implementation on the Coast might
Logging Convoy was organized in a mat- know is that markets have been weak, be modified when considering recom-
ter of days, and in late September saw and new forest policies were implement- mendations that will come from the Inte-
over 400 trucks converge in downtown ed during that time. rior Forest Sector Renewal process.
Vancouver from as far away as Vander- To be fair, many of today’s issues were These protests are an attempt to raise
hoof. The largest and unintentional im- not caused by the current, or any gov- awareness that there are problems. To
pact of this convoy was its inspiration for ernment, but can be attributed to the be successful in seeing a vision come to
others in this province to follow suit. USW/WFP strike; 20 per cent duties on reality, government needs to walk with
Late November saw coastal loggers softwood lumber exports to the United industry, as it transitions. The tagline
rally to have their voice heard in Camp- States, market conditions in China, and of “Making Life Better” should also ap-
bell River on two occasions within one Interior timber supply reductions due to ply to those that work in our forests,
week. The first was when the Wilderness mountain pine beetle. However, they all but so far, we are going in the wrong
Committee planned a public meeting to relate to a publicly owned resource—our direction. What would make life better
discuss management of old-growth for- provincial forest. for contractors is to work on George
ests, which was met with the timber har- The NDP government’s vision is to Abbott's recommendations to address
vesting community from across northern transform the forest industry. Its goals contractor sustainability.
Vancouver Island mobilizing to share are to use more BC logs in domestic One final comment, this will be my
their views. manufacturing facilities; increase value- last Executive Director’s message. I have
Shortly after, a meeting of constitu- added production; and leave less waste truly valued the many notes of apprecia-
ents in the North Island riding with their behind after harvesting to support pulp tion and support over the last five years.
MLA turned into a raucous townhall and paper mills. Bottomline, the govern- Thank you for reading my articles.
style gathering with some 80 contractors ment wants to sustain and create more
expressing frustration over forest policy jobs from our forests. Unfortunately, a David Elstone, RPF, Executive Director, TLA
and the United Steelworkers and Western stick is being used to shape the industry Tel: 604-684-4291 ext. 1
Forest Products (USW/WFP) strike. into this vision. Email: david@tla.ca
8 Truck LoggerBC Winter 2020
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Winter 2020 Truck LoggerBC 9
Todd Chamberlain Southern Interior PERSPECTIVE
we’re goiNg to See JohN!
On September 25, 2019, I was lucky to all that were involved, along with offers stop. Whether we were travelling through
enough to participate in what would be a of reduced hotel rates and money to assist Abbotsford, Langley or as we took the exit
historic day for our industry. The first text in their fuel costs. onto Hastings Street, the signs, banners
started at 4 am to let me know that logging The time to move on was drawing near and crowds continued.
trucks that were part of the BC Logging so Howard McKinnon and Frank Etchart The original plan was for the major-
Convoy had passed through Quesnel. The addressed the group to provide clear and ity of the trucks to marshal at the PNE
next text at 6:30 am said there were more concise instructions; their message was of grounds and only eight would continue
than 100 at 70 Mile House. safety and professionalism. ILA Chair- on to the Convention Centre to deliver
Trucks were en route to Merritt from as man, Randy Spence, shared words of sup- the message; however somewhere along
far north as MacKenzie and Burns Lake. I port and I shared gratitude to organizers, the way that plan had changed.
thought to myself, it’s going to be a good participants, and everyone who support- Fast forward to the Convention Centre
day. I made my way to Merritt that morn- ed us. Chiefs Lee Spahan and Aaron Su- where approximately 1,000 people lined
ing along with ILA Board Directors to mexheltza representing the Five Nicola the streets as the first of over 400 trucks
meet at the marshalling point. We were Bands offered words of encouragement arrived trucks arrived, and they were
there to support the vision of many indi- and support for our journey and also let met with cheers loud enough to drown
viduals who wanted to send a message of the group know that they were sending out the sounds of their horns. It took
support to the mayors of forest dependent a letter to the Premier in support of our approximately four hours for all of the
trucks to pass by and the crowd stayed
Unfortunately, we didn’t get to see Premier Horgan and cheered every one of them. Those
that parked were swarmed by the media.
that day but I’m extending an invitation to the Premier The Vancouver Police Department
to jump in a truck with me and maybe together we can escorted the remaining trucks to a mar-
shalling point and from there many of
find the solutions to help our industry! the drivers made their way back to the
communities who would be gathered in industry and the message that we were Convention Centre. They were greeted
Vancouver later that day for the Union delivering today. and congratulated by complete strang-
of BC Municipalities Convention. The At approximately 10 am, the first of many ers for what they had accomplished that
result would be a convoy of over 400 log- trucks started to roll out of Merritt and the day. Hands were shaken and in some
ging trucks coming together to share in horns began again. Hundreds of people cases a few tears were shed.
our message to Premier Horgan that rural lined the side of the highway or stood on Unfortunately, we didn’t get to see Pre-
communities in British Columbia matter. top of the overpass, waving signs along mier Horgan that day but I’m extending
We arrived in Merritt at 9 am and al- with Canadian and British Columbian an invitation to the Premier to jump in a
ready there were at least 50 trucks and flags. Those participating in the convoy truck with me and maybe together we can
hundreds of people gathered around wait- could only continue to sound their horns find the solutions to help our industry!
ing for further instructions. Soon after as their mere words were not enough.
you could hear a symphony of air horns The support for the convoy contin- Todd Chamberlain, RFT, General Manager, ILA
(which would become a familiar sound) ued as we made our way down the Co- Tel: 250-503-2199
as a row of trucks came down the Coqui- quihalla highway. Every overpass from Email: todd@interiorlogging.org
halla highway north from Kamloops and Merritt to Hope had people waving signs
pulled into Merritt. The support that had and cheering on the group. In Hope, the
already been shown to the drivers as they convoy grew as it was joined by trucks
made their way here was overwhelming. that had travelled the Fraser Canyon or
People had been standing on the side of Hope-Princeton highway. We were now
the highway as early as 2 am waving flash- over 240 trucks and as we continued on
lights and signs to show their support. to Vancouver, more trucks asked to join
It was no different in Merritt as a steady our group to show their support. As we
stream of local businesses continued to travelled deeper into the Lower Mainland
deliver food, coffee, water and well wishes the support from the general public didn’t
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12 Truck LoggerBC Winter 2020Rick Brouwer North West PERSPECTIVE
SolutioNS for the
North weSt
C ontractors in northwestern BC
have heard about forest revital-
ization for a long time. There have been
Additionally, when we innovate to
reduce our costs, the Post-Harvest Ap-
praisal Review Method (PHARM) disal-
Bureaucracy
There seems to be a culture in the re-
gional and branch offices that Northwest
at least five booms and busts in our area lows the costs of the innovation, pushing BC is not significant on the provincial
since the 1970s, and each time there has the indicated stumpage upward. stage. We are told that solutions that work
been discussion about how to revitalize Solution: Ledger the stumpage rate. for Northwest BC are “likely” to be a prob-
the forest industry. The interesting thing When a negative stumpage rate is indi- lem for the United States or for the “main”
is that ever since I’ve been involved in cated, the minimum is still paid ($0.25/ licensees in the rest of the Province. In
these revitalization discussions, the mes- m3), but appraisal ledgering is to be used other words, it seems to be easier for bu-
saging from the industry and forest con- to allow the negative portion of the in- reaucrats to criticize and either say, “no”
tracting community in northwestern BC dicated rate from the appraisal to be rec- or, “if the solution works for the other 80
has been consistent, and has also been ognized in the calculation for stumpage per cent of the province, then that’s good.”
consistently ignored. on a licensee’s other stands. This could be There is also a bureaucratic attitude
Maybe this time our messages will be implemented province-wide. that we should let the marketplace rule,
heard and we can finally move forward! as opposed to developing and promoting
Marginalization and lack of opportunities and markets that best uti-
Cost structure representation lize the forest resources to provide a good
Northwest BC has the enviable con- The northwest doesn’t fit the mold of return for the people of BC.
dition of having both challenging forest the Interior or Coast. Politically, the re- From a bureaucratic perspective,
types combined with challenging terrain, gion has generally not voted in line with Northwest BC is seen to be aligned to
including large areas without roads. Ad- the ruling political party. Hopefully, this the Prince George area. Even the Skeena
ditionally, there are few manufacturing has changed since the Minister of For- Region has its main offices in Smithers,
facilities in the region. This means that ests, Lands, Natural Resource Operations which is still in the true Interior.
the region needs strong markets for the & Rural Development is from this area; Solutions: 1. Move regional and pro-
entire log profile from the area, which however, the current government owes vincial decision makers into Northwest
does not happen frequently. Without most of its allegiance to urban centers BC. 2. Have provincial leadership direct
multiple robust and diverse markets for and Vancouver Island. We do not have the bureaucrats to embrace a philosophy
our entire log profile, our cost structures any of the established, large industrial of developing locally relevant solutions
hold us back. players operating in the region, which across BC.
Solutions: 1. Locally-led and informed means that the northwest does not get All of this is not to criticize or whine,
research into Hemlock and Balsam to in- much consideration when government but instead to provide advice and solu-
novate existing products and lead the “consults with industry” (i.e. COFI). tions, and demonstrate that there’s a lot
development of alternative products for Solution: Include the North West Loggers of opportunity in the forests of north-
a suite of opportunities to market the re- Association when government “engages western BC. The NWLA and contractors
gion’s forest profile. 2. Support First Nation with industry.” of northwestern BC are ready to work
endeavours to utilize the timber profile. with the Province to move these solu-
Uncertainty tions forward.
Stumpage There is confusion and uncertainty
In northwestern BC, the appraisal sys- around implementation of current and Rick Brouwer, RPF, NWLA
tem will result in negative stumpage rates upcoming treaties, although much of the Tel: 250-638-0337
for much of our forests, but we still pay tenure in northwestern BC is controlled Email: rbrouwer@westlandresources.ca
the minimum rate. This means that while by First Nations and community tenures.
costs are recognized, they are not reflect- This could also lead to opportunities and
ed in the actual stumpage we pay, nor are demonstrations about how to get things
we able to “recover” the costs through done.
a lower stumpage rate. In effect, we are Solution: Work with those Nations that
held at a disadvantage when compared to are approaching treaty and have forest
the rest of the Province. tenures to develop solutions that utilize
forest resources.
Winter 2020 Truck LoggerBC 13Paul Schuetz Northern Interior PERSPECTIVE
imPact of ProPoSed chaNge
to foreSt utiliZatioN
L ately, a topic of great interest has
been the Fibre Recovery Zones
that were implemented on the BC Coast
other users such as pulp mills. Adoption
of such a proposal would change the
way forestry is done in the Interior, and
opportunities for logging and chip
truck drivers.
early in 2019, increasing the amount of while there are many advantages, there Disadvantages:
wood fibre that is removed from har- are disadvantages as well. • Harvesting costs: To change the way
vested areas in the Interior. Reducing forest harvesting and hauling prac-
wood waste in cutblocks and maximiz- Advantages: tices are done in an entire industry
ing volume recovery sound like attrac- • Higher utilization: Increasing uti- will require many new innovations
tive concepts, but what is the cost of lization means getting the most and adaptations, and change doesn’t
these initiatives and who will be footing economic value out of a harvested come cheap. Investment in new
the bill? tree. The increased volume coming equipment, equipment modifica-
In January 1966, government intro- from blocks would provide biomass tions and associated training that
duced Close Utilization to the industry consumers with opportunities to would enable contractors to meet
and it constituted “logging all wood be- increase their supply; and in some new harvesting standards is a cost
tween a 30 cm high stump and a 10 cm cases, may potentially allow for an that would have to be made up front.
diameter top in all trees with a 17.5 cm Annual Allowable Cut uplift in ar- • Log hauling costs: Whole-tree haul-
diameter breast height and larger.” Start- eas where pulp mills operate. ing would require contractors to
ing as a voluntary policy in certain areas • Increased supply: While the mer- invest in revised trailer configura-
of BC, Close Utilization was designed to chantable supply of fibre to the saw- tions, and anyone hauling ‘cut-to-
reduce waste in the forest and provide milling industry will not effectively length’ trees would have to change
fibre for nearby pulp mills. After its ini- change, the supply of lower grade their operating procedures; also, a
tial implementation in the mid-60s, the fibre to downstream consumers of significant cost up front.
Forest Service noted, “all districts are re- sawmill by-products will improve. As much of the Interior logging in-
porting an upsurge in the shipment of With the ongoing closure of saw- dustry moves from harvesting dead pine
chips to pulp mills, which in turn results mills, the demand for biomass con- stands to greener wood, the amount of
from an increase in the number of saw- tinues to increase. By maximizing waste left behind in cutblocks has been
mills with barkers and chippers.” the fibre utilization from stands har- diminishing. However, we are a long way
More than 50 years later, the utiliza- vested in the field, this demand for from the ‘zero-waste’ strategies some
tion standards remain relatively un- biomass can be alleviated by hauling European countries employ. There are
changed, but with the ongoing demand undersized and less desirable stems. many benefits to changing, but invest-
for more fibre for pulp mills, and the de- • Less waste: If whole trees were uti- ment is required up front for changes to
sire to reduce waste in the forest, chang- lized, the excess waste that would machinery, safety and training.
es in utilization is touted as a solution to normally be burned in large waste Demanding truck logging and har-
the problem of roadside waste piles. piles would decrease dramatically. vesting contractors to make these
In the summer and fall of 2019, one of The benefits would include less time changes on their own will create an en-
the topics discussed at the Interior For- and labour for piling the waste and vironment of cut-throat competition
est Sector Renewal workshops was man- burning it, ‘cleaner’ areas for post- amongst themselves, and to avoid this,
ufacturing capacity and fibre utilization. harvest activities, and less CO2 re- government- and licensee-funded ini-
Changes to fibre utilization and the idea leased into the atmosphere. tiatives must be implemented to ensure
of maximizing the fibre potential from • More employment: Increasing the the transition is made smoothly. While
forested stands by harvesting and haul- utilization standards in a cutblock changing utilization standards may in-
ing whole trees is not a new concept. would result in an increase of the crease available wood volume, tax-break
Cutting stems to a 20 cm high stump overall volume that is hauled. More incentives, low-interest loans, train-
and a 5 cm top was proposed as well truck loads would be required to ing initiatives, and long-term contracts
as skidding the whole tree to roadside, deliver this extra volume since should be provided to ensure contrac-
loading and ‘off-highway’ hauling the whole, undersized and low-grade tors are not stuck paying for it.
whole tree to a processing yard or mill, trees that do not meet mill quality
then processing the tree into lengths for specifications would be added to Paul Schuetz, consultant to TLA
sawmill use while saving the remaining the mix. This increase in workload Tel: 250-564-4115
long-butts, branches, hog-fuel, etc. for would result in higher employment Email: pschuetz@industrialforestry.ca
14 Truck LoggerBC Winter 2020Left to Right: Brad Piercy, Rachelle Burt, Mike Delves, Chris Duncan, Blair Traxler
MNP FORESTRY AND FOREST PRODUCTS SERVICES
We’re With You for the Long Haul
At MNP, we believe in being your partner in business. That’s why more than 500 clients from all sectors of the
forestry industry in British Columbia rely on MNP for industry-specific expertise and strategic business advice.
OUR CLIENTS INCLUDE: Forestry Forest Products
• Logging Contractors • Sawmills
• Silviculture • Wood Processors
• Equipment Dealers • Specialty Wood Product Manufacturers
• Industry Suppliers • Pulp and Paper Operations
• First Nations • Biomass / Bioenergy
WE CAN HELP YOU WITH:
• Accounting and compliance tax • Due diligence for business acquisitions
• Equipment purchase decisions and financing options • Partnering with First Nations
• Understanding your true costs • U.S. tax planning and compliance
• Succession and estate planning • Technology reviews and software selection
• Selling your business • Hiring a controller or key manager
• Paying less tax • Contractor sustainability
• Corporate re-organizations • Industry benchmarking
To find out what MNP can do for you, contact:
Chris Duncan, CPA, CA Blair Traxler, CPA, CA
Regional Leader, Forestry and Forest Partner, Forestry and Forest
Products Services, Vancouver Island Products Services, Northern B.C.
T: 250.748.3761 T: 250.596.8313
E: chris.duncan@mnp.ca E: blair.traxler@mnp.ca
Winter 2020 Truck LoggerBC 15GROW
YOUR BUSINESS
Our Forestry Group is backed by a full-service global law
firm with a wide range of experience representing clients
across the country on issues affecting the forestry sector.
We provide you with the advice you need to succeed in
today’s economic environment and to unlock new business
opportunities.
Visit us at Booth 307 at the Annual Truck Loggers
Association Convention & Tradeshow to find out how we
can help your organization reach its highest potential.
KEY CONTACTS
Brian Hiebert Garry Mancell, R.P.F Jeff Waatainen
Partner Counsel Associate
+1 604 643 2917 +1 604 643 2977 +1 604 643 6482
www.dlapiper.com
DLA Piper (Canada) LLP is part of DLA Piper, a global law firm, operating through various
separate and distinct legal entities.
16 Truck LoggerBC Winter 2020Jeff Waatainen Legal VIEWPOINTS
Surrogate BiddiNg
“S urrogate bidding” in the context
of a BC Timber Sales (BCTS)
auction can mean different things to dif-
Once the winning bidder enters a
TSL agreement with BCTS, substantial
obligations are imposed upon the win-
for any liability the contractor incurs as a
result of the TSL.
In any such collaboration, the par-
ferent people. But for BC’s logging con- ning bidder, now licensee. These in- ties need to avoid anti-competitive be-
tractors, it can mean an opportunity to clude payment of a substantial licence haviour—they cannot do anything that
generate additional revenue through deposit, financing a logging operation, may suppress bids in a BCTS auction, or
collaboration with major licensees, management of a logging operation that suppress the price of timber or logs. Re-
private landowners and timber man- complies with legislative and contractual lated to this, the agreement or arrange-
agement companies (herein referred to requirements, payment of stumpage and ment that the parties come to should
as “Majors”). waste assessments, and marketing of tim- not have the Major agree not to bid on
Of course, anyone eligible to register as ber. And there is also the risk that the the TSL (this issue should not arise if the
a “BC timber sales enterprise” under the TSL may not turn out as advertised and Major already holds three active TSLs),
BC Timber Sales Regulation (the “Regu- strain the economics of the operation. and the contractor should prepare the
lation”) is free to pursue BCTS timber For contractors, management of a com- TSL application and determine the bid
harvesting opportunities regardless of pliant logging operation is not of much independently of any such agreement
whether they work with a Major. But the concern—it’s what they do. On the other or arrangement. That is not to say that
rules that govern the BCTS program pro- hand, management of the obligations and the contractor cannot seek information
vide incentives for contractors and Ma- risks associated with timber harvesting from a potential Major collaborator (the
jors to work together. operations is what Majors do. So, there price that the Major is willing to pay for
The Regulation deems that a person is potential for alignment of the interests the timber, the logging rates it’s willing
otherwise registered as a BC Timber Sales of a Major in search of incremental fibre to pay, and so on), but the Forest Act
enterprise is no longer a registrant for but who cannot bid in a BCTS auction, prohibits “agreements or arrangements”
so long as that person holds three active and a contractor in search of a source of whereby a party agrees not to bid on a
BCTS licences. In other words, regardless incremental revenue but who is unable or TSL, or whereby the bid particulars and
of its capacity, a registrant may only hold unwilling to assume the risks of a BCTS the amount of the bid “are decided.”
three BCTS licences at one time. On the harvesting opportunity. Finally, the contractor’s protection
other hand, capacity constraints may lim- In such a relationship, the Major from legal liability associated with the
it participation of other registrants in the would agree to purchase the timber har- TSL is usually the Major’s agreement to
BCTS program. While the requirements vested from a TSL awarded to the con- indemnify the contractor. But unlike a
of registration are not onerous, the BCTS tractor in a BCTS auction. The purchase typical contractor’s operation, primary
auction process imposes substantial fi- price may include a volumetric rate paid liability under the TSL is imposed upon
nancial and legal obligations on an “ap- to the contractor, or an agreement to use the contractor since they are the “licens-
plicant” (a registrant who submits a bid the contractor to perform the logging ee.” And, as the saying goes, an indem-
or “application” in a BCTS auction). An work, or both. Typically, the Major will nity is only as good as the person who
applicant will typically have to lodge a bid agree to provide the licence deposit and gives it, so all the legal rights in the world
deposit with its application. If something possibly the bid deposit on behalf of the do not replace the value of a trusted
goes sideways and the applicant does not contractor, and may agree to provide working relationship.
enter a licence agreement (typically a working capital for the logging opera-
“Timber Sale Licence”) with BCTS when tion. The Major should otherwise agree Jeff Waatainen is an associate with the Forestry
its application is “approved” (that is, when to ensure that the harvesting opportuni- Law Practice Group of DLA Piper (Canada) LLP.
it submits a winning bid), the registrant ty is completed in accordance with regu- This column is in the nature of general com-
forfeits its bid deposit, and BCTS will im- latory and contractual requirements, in- mentary only, and is not in the nature of legal
pose higher licence deposit requirements cluding payment of stumpage and waste, advice or opinion.
upon that registrant going forward. and agree to indemnify the contractor
This Report is brought to you by:
STAFFORD LAKE BENWEST Logging & Road Contractors
LOGGING LTD. LOGGING LTD.
Campbell River
Tel: 250-287-7932 Email: Bryce@bwlog.ca
Winter 2020 Truck LoggerBC 17Get The Right Coverage
At The Right Price
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Peter.Pringle@marsh.com Ben.Fitzpatrick@marsh.com Steve.Hicks@marsh.com
Marsh is one of the Marsh & McLennan Companies, together with Guy Carpenter, Mercer, and Oliver Wyman.
Copyright © 2019 Marsh LLC. All rights reserved. 422092626
18 Truck LoggerBC Winter 2020Chris Duncan Business MATTERS
what You Need to KNow aBout
the Bc loggiNg tax
What is the logging tax? The remaining tax payable is due with logging tax. When clearing land for more
The logging tax is a 10 per cent tax that the logging tax return six months after space, farmers are responsible for the
applies to individuals and corporations the end of the tax year. logging tax on any trees they sell from
in BC that receive income related to log- the cleared land.
ging operations from private and Crown Examples of situations where the
land. The logging tax is only applicable to logging tax is often missed: When is the return due?
those individuals and corporations that You must file a logging tax return with-
own, or own the rights to the logs that Timber sale bidding on someone’s in six months of your year end in which
are being sold. behalf the logging operations occurred.
The Logging tax department is cur-
What is considered income from rently reviewing stumpage data from BC Does it mean I pay more tax because
logging operations? Timber Sales (BCTS) and the Ministry of I log?
Logging operations can include any Forests, Lands, Natural Resource Opera- No. The logging tax is a separate tax
combination of: tions & Rural Development to determine you pay to the Province for income de-
• The sale of logs, standing timber, the if the logging tax has been paid on all rived from logging operations. However,
right to cut standing timber, or pri- BCTS transactions. In many cases they the amount of logging tax you pay is nor-
mary and secondary forest products
(e.g. lumber, shakes, shingles, poles,
pulp, paper etc.).
If you or your corporation is being assessed regarding
• The delivery of logs to a sawmill, the logging tax, it’s important to seek the advice of
pulp or paper plant, or other place
for processing or manufacturing, or
an accountant familiar with the provincial tax.
a carrier for export. are going after the successful bidder for mally fully deductible as a credit against
• The acquisition of logs, standing tim- the logging tax or even the secondary your federal income tax filing. You have
ber, or the right to cut standing timber. contractor hired to harvest the timber. up to three years to make the claim on
• The cutting of logs from standing timber. While all the cases are currently under your federal income tax return if you
• The import and export of logs. review, they won’t likely relent until they missed claiming it.
• The production of primary and sec- get someone in the supply chain to pay
ondary forest products. the tax. What do I do if I am being assessed
• The transportation of logs. regarding the logging tax?
Capital gains on the sale of timber is Private land holder If you or your corporation is being
treated as logging income for the purpos- If you are logging a piece of land you assessed regarding the logging tax, it’s
es of the logging tax and as such is taxable. have held for a long time and claimed it important to seek the advice of an ac-
There is no minimum number of trees as a capital gain, then you are responsible countant familiar with the provincial
or income for an operation to be taxable. for the logging tax as well. tax. Getting the right advice can not only
minimize your headaches but can also
When do you have to pay? Sale of standing timber minimize your tax exposure.
The logging tax is payable to the Minis- When selling land with standing tim-
try of Finance within six months of your ber you might be responsible for the Chris Duncan, CPA, CA
year end in which the logging operations logging tax on the part of the sale price Business Advisor, MNP Private Enterprise Group
occurred. If you owed more than $2,000 attributable to the timber value. The log- Tel: 250.748.3761
in logging tax in the previous tax year, ging tax department has been reviewing Email: chris.duncan@mnp.ca
you must make instalment payments. sales transactions through the land titles
You must pay your instalments as follows: office and assessing logging tax on sales
• The 50 per cent instalment payment of large parcels with standing timber.
by the end of the tax year.
• The 25 per cent instalment payment Farmers
by the end of the third month fol- Farmers are one group of individuals
lowing the end of the tax year. who are often caught off guard by the
Winter 2020 Truck LoggerBC 19MORE
THAN
AUCTIONS
At Ritchie Bros., we know your needs change. That’s why we offer you more
ways to sell equipment and trucks when, where, and how you want. From the
world’s largest live auction company to a global network of online and onsite
selling channels, today we’re more than auctions – much more.
Contact us for more details by visiting
RitchieBros.com/MoreThanAuctions
or call the Chilliwack Site at 604.823.2700
20 Truck LoggerBC Winter 2020Bc goVerNmeNt’S oPtimiStic ViSioN for
chaNge aNd traNSformatioN
By Premier John Horgan
W
Photo courtesy of the NDP
ood fuels British Columbia’s law in November, we can establish a
economy. Our province has predictable and collaborative path for-
one of the world’s most sustainable and ward with Indigenous peoples, com-
innovative forest sectors. We are facing munities and businesses on land and
challenging times in the industry: from resource management. We now have 13
climate change, to ongoing trade dis- signed partnership agreements between
putes, to the protracted coastal labour First Nations on Vancouver Island and
dispute and the challenge of ensuring BC Timber Sales, including Cowichan
the industry is aligned with the chang- Tribes, K'ómoks First Nation, Qualicum
ing profile of coastal forests. First Nation and the Nanwakolas Coun-
And while the challenges facing our cil member First Nations. These agree-
Interior sector are equally daunting, ments will bring economic benefit and
the heart of our forestry sector remains build relationships. We are sitting at the
its people. table with industry and First Nations,
Forestry remains a cornerstone of our economy, and
our government is proud to work with you to move
the sector forward.
What we are experiencing today is building partnerships that create better
more than a transition, it’s a transfor- outcomes and opportunities for every- Paul’s Hospital in Vancouver and the
mation. Long-term prosperity for forest one. By working together, we can bal- Royal BC Museum in Victoria. Innova-
workers and forest communities means ance environmental stewardship with tive partnerships, like the one between
finding new markets and getting more economic opportunity and growth. Pinnacle Renewable Energy and Mitsui,
value from our forest products. To do BC is globally recognized for its inno- will also see BC wood transformed into
that, we need to make sure the industry vative value-added wood products and clean, renewable electricity in Japan and
is up to the challenges ahead. mass timber is a cost-effective and sus- good-paying jobs here in BC.
Our government is doing everything tainable evolution that focuses on value The BC Government’s vision for the
we can to help the forest industry get over volume. BC communities are em- future of forestry is an optimistic one.
the most value out of every log, grow bracing mass timber technology for tall Change and transformation can be dif-
our manufacturing sector, promote in- wood buildings, with cities such as Victo- ficult, but together we can tackle the
novative products in markets around ria, Campbell River, Kelowna, and Surrey challenges ahead and find solutions
the world, and create good jobs in local signing on to become early adopters. that work for people. Forestry remains
communities. We need everyone with At a time of global focus on climate a cornerstone of our economy, and our
an interest in the future of forestry to action, mass timber can help us unlock government is proud to work with you
help us shape that future. We need to BC’s full economic potential and create to move the sector forward. Let’s build
work together as we revitalize the Coast good jobs for forest workers. Our gov- a stronger, healthier forest industry
forest sector by increasing the process- ernment is doing what we can to encour- for the people and communities who
ing of BC logs within the province and age companies to make the transition. depend on it.
redirecting waste fibre to BC’s pulp and This year, as part of the CleanBC plan
paper mills. And we need to work to- to reduce climate pollution, the Province
gether to find locally-driven solutions to changed the building code to allow wood
build a forward-looking vision for tim- building construction up to 12 storeys
ber supply areas in BC’s Interior. using fire-resistant, engineered wood.
Partnerships with First Nations are We also directed that engineered wood
an essential part of building a better is used, where possible, for $20 billion
future for BC’s forestry sector. Guided in public infrastructure projects over
by the new Declaration on the Rights of the next three years, including schools,
Indigenous Peoples Act, which became housing and hospitals—like the new St.
Winter 2020 Truck LoggerBC 21StreNgtheNiNg the Bc foreSt Sector’S reSilieNcY
By Doug Donaldson, Minister of Forests, Lands, Natural Resource Operations and Rural Development
Photo courtesy of Ministry of Forests, Lands, Natural Resource Operations, and Rural Development
changes needed to cement partnership solutions are best made when parties en-
approaches and create a more unified gage in good faith at the bargaining table.
forest sector that advances competitive- For Interior workers faced with perma-
ness for contractors and tenure holders. nent and indefinite mill closures, we’ve
We know it’s better for everyone when provided $69 million in funding to help
we work together. with early-retirement bridging, skills
Aligning with the Convention’s theme training and employment supports. This
of “Vision 20/20,” it’s clear we need a funding was put in place following dis-
big picture approach to support current cussions that myself and Parliamentary
manufacturers of lumber, pulp, paper Secretary Ravi Kahlon have had in com-
and pellets, and encourage further in- munities with affected workers, commu-
vestment in higher-value products such nities and industry.
as engineered wood. As part of the Interior Renewal, we
Continuing with the status quo is not sought Indigenous, community, industry
an option. With constrained fibre sup- stakeholder and public feedback to im-
plies, it’s crucial that we get value out prove the long-term success of the Interi-
of every piece of fibre that is harvested. or forest sector. A What We Heard report
Adding value means adding jobs for Brit- is expected to be released early this year.
ish Columbians and continuing to sup- A parallel process in the Interior contin-
port British Columbia’s communities. ues where forest industry leaders are help-
That’s why we’ve brought in changes ing form regional coalitions of Indigenous,
B ritish Columbia’s forest sector has
helped build this province, and
forestry and forest product manufactur-
through our Coast Revitalization initia-
tive to increase the flow of fibre for do-
mestic production. This includes a higher
community and labour leaders to work
together on how to create the most value
and prosperity from the midterm timber
ing are the greatest sector contributor to fee-in-lieu on some export logs when it supply; this is the TSA Coalition process.
BC’s economic base. We are committed makes economic sense to mill those logs We are continuing efforts to expand and
to its future for all British Columbians. locally. We are supporting business-to- diversify demand for our wood products
The industry has faced a perfect storm business relationships between harvest- abroad. In my recent trade mission to
of challenges over the past year—from ers and manufacturers through stream- China and Japan, I discussed with cus-
market pressures, low commodity prices lined scaling procedures. Because we tomers and stakeholders our building
and ongoing unjust duties from the US, want to maximize jobs from the fibre, code changes that allow mass timber con-
to impacts from climate change. we are encouraging improved utiliza- struction to 12 storeys, related BC and Ca-
That’s why we are making changes to tion through implementation of a fibre nadian technologies, and BC’s position as
strengthen the BC forest sector’s resilien- recovery zone, which we can adjust to a supplier of high-quality wood products.
cy so that it can come out of this situation market conditions. We engaged industry We are also partnering with Indigenous
stronger, more diversified, more inclusive of on ideas for reform and we’re acting on Nations to develop several land use plan
Indigenous Nations’ interests and better able recommendations received. updates and amendments that are more
to withstand the challenges of the future. In spring 2019, we passed Bill 22 to responsive to today’s growing resource
Our government announced the start of this ensure the public interest is considered development pressures and values. This
change at the TLA’s 2019 Convention. before any tenure transfer takes place. process will include opportunities for
Failures and inaction by the previous I looked for proposed solutions in ten- significant community, stakeholder and
government have led us to unsustain- ure transfer arrangements that consider public engagement. Please stay tuned to
able concentration in the industry and community, Indigenous and worker per- our land use planning public engagement
a serious power imbalance, with con- spectives. The Conifex-Hampton transfer site for opportunities to provide your in-
tractors paying the price. Through the in Fort St. James was the first approved put on projects under development.
Contractor Sustainability Review, we tenure transfer after Bill 22’s adoption. Looking ahead, I’m confident that BC’s
committed to making changes with con- I’m confident the legislative and regula- forest sector will show its resiliency and
tractors and tenure holders at the table. tory changes will support a more vibrant innovation to weather our current chal-
I recognize your countless hours of hard and diverse forest sector. lenges as it has so many times in the past.
work and commitment to seek solutions Understandably, we, amongst many, I see our forest sector emerging with a
so contractors and tenure holders can are concerned about reduced operations new strength, vision and stability that
share in successes and increase partner- on the Coast this past year. Our govern- will continue to cement it in the founda-
ships going forward. In 2020, based on ment knows how difficult labour disputes tion of our economy. I see a good future
recommendations from Dan Miller’s can be for all those who are affected; we and the future is wood.
report, I look forward to finalizing the hold strong to our belief that progress and
22 Truck LoggerBC Winter 2020You can also read
