BY RICK KOSLOLOFSKI
Over many years there has been much controversy over log exports. Often when asked what I do for a living and I mention that I am involved in this part of the forest industry I am met with a negative response at which point I find myself having to defend and explain to people how it all works and why we export logs.
It is surprising how little knowledge the residents of our province have about the biggest industry in BC even amongst people who work in the industry. I have worked in BC’s forest industry for close to 30 years in various occupations although mostly as a company owner in the field of timber measurement also known as log scaling. Over the years I have seen many changes, many of which left me thinking that the industry was coming to an end but there has always been an instinct of survival that has kept it alive through innovation and change for the better.
Some of my opinions may not be well received by all, but the facts are the facts and it is important to separate the two.
For as long as cargo ships have existed there have been lumber exports from Canada to many parts of the world and years following there have been raw log exports simply because foreign countries wish to process the logs themselves and in many cases our domestic mills are not geared to make the product that the customer demands.
Some of the facts that seem to be little known are that high grade timber of all species with the exception of Balsam is not exportable. Western Red Cedar and Yellow Cedar of all grades are not allowed to be exported at all and the only exception to this is from federal land which is very rare. If a forest company or land owner wishes to export timber from provincial land of any kind be it private land or a provincial forest tenure, the timber must be harvested and contained in a parcel, then the information on the parcel of logs must be submitted to an electronic system managed by the Ministry of Forests where the parcel is advertised as surplus for domestic production. If a domestic sawmill wishes to purchase this timber, they have first rights to do so at fair market value based on the past three months average domestic selling prices (not the higher export selling price). If after a two week advertising period there are no domestic mills offering to purchase the timber then the owner can sell the logs to an exporter and must pay to the province a fee in lieu of domestic manufacture of approximately seven dollars per cubic meter which would be approximately $210,000.00 for one full freighter of logs. The only geographic areas in the province that are exempt from the advertising requirements are some very remote locations in the mid coast and Haida Gwaii where it has been deemed uneconomical to transport timber to the nearest processing facility.
The question prevails why so many mills in BC have shut down or moved to other countries and the reasons vary. Some companies have deemed their antiquated mills to not be financially viable to operate and not worth the capital investment to upgrade and some have found that due to governmental change the business environment prevents profitability. Some have found that the high cost of labour coupled with the added cost of labour unions prevents profitability. Timber profiles have changed across the province due to many factors including park reserves, impact from harvest, pine beetle infestation to mention a few and all of these issues impact the viability of a sawmill that has been built for a specific purpose.
In years past the BC Government legislated that in order to have rights to a tree farm license, a company was obligated to own and operate a wood processing facility. During the leadership of Gordon Campbell this legislation was changed and the obligation to own and operate a wood processing facility was eliminated. This gave existing tree farm license holders a large advantage in how they could manage an already granted timber supply.
Due to the changes in the forest industry over the years, diversification has been necessary to maintain survival and without the ability to export logs it may not be viable due to the limited demands of domestic processing facilities. The infrastructure requirements to harvest timber have a large financial impact along with the cost of harvest. Just to build a logging road can cost well over $100 per lineal meter and harvest cost can range from $20 to $60, depending on the terrain and logging methods necessary to harvest the timber.
The good news in all of this is that trees are renewable and sustainable resource. I have been employed by trees younger than myself before I was 40 and I have worked with some people who have harvested the same stand of timber twice in their careers. Commodities and natural resources from most countries are sold and traded all over the world and this is what keeps the world economy alive.
Hopefully knowing some facts and history will enlighten the people who would normally take a dim view of log exports.
Rick has been a licensed BC coastal log scaler for 27 years and owner of Pioneer Scaling & Inventory Management Ltd for 19 years. Having been involved in many aspects of the forest industry over those years, my focus has recently turned to contracting my services in log procurement and logistics to China based log importers.