FUTURE OF THE FOREST INDUSTRY (2022)

As forest policy modernization, reconciliation efforts and robust climate agendas continue to advance in British Columbia, the forest industry in Canada and in particular the BC forest industry is calling for the creation of policies, pathways and conditions that strengthen B.C.’s leadership potential and help drive investment and innovation across the industry.

Forestry remains foundational to people and communities across BC, supporting over a 100,000 jobs and contributing nearly $13 billion annually to GDP and $4 billion in revenues to all levels of government. The future for forestry in BC can be bright, particularly as consumers and jurisdictions turns to sustainably produced carbon-storing forest products as the building and packaging material of choice. The opportunity for BC to be a leader and support an inclusive, sustainable and competitive forest sector and provide good jobs for British Columbian is significant.

To that end, ensuring a policy and regulatory environment that supports the health of the sector through the ups and downs of volatile commodity markets is critical to ensuring BC can maximize opportunities.

Background

Following consultation with 7000 staff in the BC Province’s natural resource ministries along with First Nations and industry stakeholders, the government of British Columbia announced that effective April 1, 2022, that the responsibilities of the Minister of Forest Lands Natural Resources and Rural Development (FLNRORD) will be split into:

• The Ministry of Forests (MOF) and
• A new Ministry of Land Water and Resource Stewardship (LWRS)

The new Ministry has a $100M portfolio, employs over 1200 staff and is responsible for working with First Nations to co-manage land and resources, protecting drinking water and other provincial policy strategies and working with the Federal Minister of Fisheries and Oceans to manage fisheries and provincial species at risk policies.

The provincial Minister of Forests remains responsible for coordination with the Federal Ministry of Natural Resources responsible for national forest policy direction and the modernizing of forest policy. In addition, the ministry also is responsible for maintaining the Market Pricing System (stumpage), enhancing protections for forests and providing yearlong BC Wildfire Service.

The industry remains a cornerstone of the economy, supporting good jobs and a better quality of life for British Columbians and also as Canadian communities.[1] With a diversity of interests and perspectives, industry participants are represented by a variety of associations. This includes, but is not limited to, the BC Council of Forest Industries (COFI) which represents the majority of lumber, pulp and paper, and manufactured wood producers across the province, the Interior Lumber Manufacturer’s Association (ILMA) which has over a dozen manufacturers based in the interior of the province as members, the Independent Wood Processors Association (IWPA) which represent many secondary manufacturers , the BC Truckloggers Association representing contractors and service providers, and BC Wood which represents value-added manufacturers from across the province. Suffice to say, the forest industry has touch points in every single community of British Columbia and diverse interests.

These organizations and their members’ advocate and work with government, First Nations, communities, labour and other partners to promote a healthy, diversified, and sustainable forest industry that benefits people and families across BC and of course as Canadians.[2] Looking at COFI’s members alone, they support approximately 100,000 jobs and contribute nearly $13 billion in GDP annually in British Columbia.[3]

Indigenous Peoples are at the heart of the discussion on the future of forestry as rights holders, owners, business and stewardship partners and employees. As the fiscal relationship continues to evolve, and as the Declaration on the Rights of Indigenous Peoples Act and accompanying Action Plan[4] continues to be implemented in B.C., the BC Chamber of Commerce, along with many of the groups above, have publicly stated they are committed to playing a positive role in the journey to support reconciliation. For its part, COFI and its member companies have long advocated for increased government revenue sharing with First Nations for forestry activities taking place on their traditional territories.[5]

The Federal Minister of International Trade, Export Promotion, Small Business and Economic Development has been mandated to[6]:

• reinforce economic cooperation including enhanced trade engagement with the Pacific Alliance and pursuing bilateral trade agreements with key partners
• protect Canadian supply chains and ensure that Canada’s trading relationships are mutually beneficial economic relationships and;
• Support the Minister of Agriculture and Agri-Food to provide full and fair compensation to supply-managed sectors with respect to the Canada-United States-Mexico Agreement (CUSMA).

Additionally, the Federal Minister of Natural Resources has been mandated to[7]:

• Build off successful investments in Green Construction through Wood and Investments in Forest Industry Transformation programs and;
• Work with the Minister of Environment and Climate Change to help protect old growth forests, notably in British Columbia, by advancing a nature agreement with B.C., establishing a $50 million B.C. Old Growth Nature Fund, and ensuring First Nations and Métis Peoples, local communities and workers are partners in shaping the path forward on nature protection.

The Federal and BC ministries focuses are important to the forest industry and the communities they support. However, it is equally critical that both levels of government focus on the health of the industry and stem the tide of lost business to more competitive jurisdictions, lest we all experience the degradation of the core economics of the industry and its substantial contribution to the health of so many Canadian and BC communities.

THE CHAMBER RECOMMENDS

That the Provincial Government:

1. Collaborate with the Federal government, Indigenous peoples, communities, industry stakeholders, including the BC Chamber of Commerce and its members, to ensure a strong, sustainable and competitive BC forest sector.
2. Develop and implement a modernization strategy for the BC forest industry that ensures predictable access to fibre at a reasonable cost for existing producers, new entrants and First Nations and includes regional priorities, socio-economic interests of our communities, and the need to retain and grow forestry businesses.
3. Incent innovation in the forestry sector to improve competitiveness and sustainability, fostering value-added production and the development of manufacturing technologies of BC forest products that bring benefits to our local communities.

That the Federal Government:

1. Collaborate with industry stakeholders, Indigenous Peoples and the Provincial government of British Columbia in the development and implementation of a modernization strategy for the BC Forest industry that incents innovation and construction using wood products and invests in forest industry transformation programs to ensure long term supply of wood fibre and products for Canadians.

[1] https://www.cofi.org/cofi-joins-coalition-for-a-better-future-and-all-cofi-members-endorse-coalitions-vision-to-build-a-winning-economic-strategy-for-canada/

[2] https://www.cofi.org/cofi-joins-coalition-for-a-better-future-and-all-cofi-members-endorse-coalitions-vision-to-build-a-winning-economic-strategy-for-canada/

[3] https://www.cofi.org/wp-content/uploads/Economy-Fact-Sheet-Nov-17-2020.pdf

[4] https://declaration.gov.bc.ca/

[5] https://www.cofi.org/cofi-joins-coalition-for-a-better-future-and-all-cofi-members-endorse-coalitions-vision-to-build-a-winning-economic-strategy-for-canada/

[6] https://pm.gc.ca/en/mandate-letters/2021/12/16/minister-international-trade-export-promotion-small-business-and

[7] https://pm.gc.ca/en/mandate-letters/2021/12/16/minister-natural-resources-mandate-letter