Since before Confederation, trade in lumber between Canada and the United States has been politically contentious.  The modern conflict began in 1982, when the US softwood industry asked the US government to impose countervailing duties on imports from Canada. As Canada’s largest lumber producer, British Columbia has been strongly affected by US trade actions.

US lumber interests argue that Canadian policies have the effect of subsidizing lumber exports to the US, giving Canadian lumber an unfair advantage and making them inconsistent with the US Trade Act and free trade agreements. The biggest source of concern has been how stumpage (the price paid by a forest company for what is a publically owned tree) is set in the country. In most of the US, where private forest land dominates, trees are priced by markets. Because of the public land model north of the border, stumpage in Canada, including BC, is set administratively. The US has long argued that the way stumpage is calculated amounts to an unfair subsidy. The US has also complained about direct subsidies to the forest sector, limitations on log exports, and cut control policies.

In the early 1980s the US lumber industry petitioned the US Department of Commerce (DoC) to implement its countervailing duties, a tax the US would then charge Canada on its softwood exports. The DoC declined to do so. In 1986 the US lumber industry again petitioned the DoC to establish countervailing duties, which it agreed to at a level of 15%. However, before this could take place Canada agreed to a Memorandum of Understanding (MOU) which established a phased export tariff. In essence, Canada, in order to decrease tensions on the matter, agreed to tax itself so at least revenues would remain within the country.

In 1991 Canada withdrew from the MOU and the US industry petitioned the DoC again to implement countervailing duties, which it did at a level of 6.5%. This decision was reviewed under the Canadian-US Free Trade Agreement (a predecessor of NAFTA). The review panel ruled in Canada’s favour, finding that the DoC had not made a convincing case under the US Trade Act. Consequently, Congress amended the Trade Act to make it easier to demonstrate the existence of an illegal subsidy. In response, Canada agreed to the 1996 Softwood Lumber Agreement, which was planned to last five years. This agreement determined that a certain amount of softwood exports would be allowed tax free, but that above this level there would be substantial export fees.

In 2001 the Softwood Lumber Agreement expired, and the US forest industry again applied for countervailing duties. This time, the DoC agreed to impose even higher duties, at 27.2%. Canada again challenged the decision under the dispute settlement mechanisms of both NAFTA and the World Trade Organization (WTO), virtually all of which ruled in Canada’s favour.

At the same time, the BC government embarked on an extensive policy reform designed in part to address US criticisms by substantially increasing the role of market forces in determining stumpage and other aspects of BC forest policy. The 2003 Forest Revitalization Plan included a 20% take back of harvesting rights, half of which were allocated to auctions to create a system of market-based pricing. Appurtenancy was eliminated, along with other reforms to “bring the market back in.” One key part of the justification for these changes was to address the concerns raised by the US in the softwood lumber dispute.

Despite BC’s significant policy reforms, and the victories in dispute settlement mechanisms, Canada agreed again, in 2006, to enter into an agreement where export taxes were collected if the price of lumber fell below a particular threshold. The US refused to return the $5 billion in duties inappropriately collected from the industry over the past 4 years, and Canada felt the need to agree to trade restraints to get access to the funds.  The 2006 Softwood Lumber Agreement, which would last for 7 years and be renewed for 2 more, places an export charge on lumber based on the current market price measured in price per thousand board feet. The charges on lumber increase when the market price of lumber decreases – the maximum rate is 15% if the price falls below $315, and goes to zero if the price exceeds $355. In September 2015, Canadian exporters paid a tax of $5 US because the price of lumber was in the range of $336 US and $355 US.

The agreement expires on October 12, 2015, and there are no apparent signs of active negotiations. The agreement stipulates that the US is prohibited from launching new trade actions for a year after expiration. Premier Clark is committed to renegotiating a new deal, and recently stated she would bring the matter up with the prime minister “as soon as the federal election is over.”

The longstanding softwood lumber dispute between Canada and the US has had a significant impact on the BC forest industry’s policies and profitability. The dispute prompted one of the biggest changes in the forest industry through the Forest Revitalization Act and ensuing tenure take-back. It also continues to have impacts on the price of exports to the US, and thus the vitality of the BC forest industry. These US trade pressures have pushed costs up, induced policy reforms, and been a major challenge to Canadian sovereignty.

Additional sources:

Government of Canada DFAIT site Softwood Lumber

Government of BC Softwood Lumber

Random Lengths overview of softwood lumber dispute

Coalition for Fair Lumber Imports

“It’s not something you’ve ever seen before. It’s like a tsunami that takes twenty-five years instead of two seconds” Keith Dufresne, manager of the Cariboo-Chilcotin Beetle Action Coalition

In Andrew Nikiforuk’s latest book, “The Empire of the Beetle”, the bark beetle outbreak that has killed over 30 billion pine and spruce trees is described in great detail. The story is told like a parable, staring the little bug that significantly disrupted a huge industry.

Chapter three, “The Lodgepole Tsunami”, describes how the outbreak took over British Columbia. Beginning with the biology of the beetle, he explains how beetles and pine trees have coexisted in harmony for decades. So how did a harmonious balance turn into an outbreak that devastated B.C’s forests?

First, the British Columbia forest industry was based on a model of “cost minimization and volume maximization”(52). The model led to a policy of fire suppression, following the logic that lost trees to fires meant lost dollars.  This policy was a “multi-million dollar annual effort created a more uniform, dense, and expansive patch of adding lodge poles”(60). This is how “cost minimization and volume maximization” turned what was originally an age diverse forest into a monoculture of aging pine trees, or in other words, how a short term economic decision created long term ecological consequences.

However, fire suppression was not the only culprit in creating a perfect setting for a beetle population surge. “Dedicated firefighting may have set the table, but it looked as if climate change had reconfigured the table’s shape and size, so that it now extended into northern and alpine forests” (61). A subtle regular warming had removed the restraints cold weather had put on beetle population growth.

This is how human action set the scene for the unprecedented epidemic.

The beetle outbreak was met with a series of policy decisions that did nothing to slow it down. In 1996, the federal government abandoned the Canada’s Forest Insects Disease Survey (FIDS) to save money. While the duty of monitoring forest health was officially passed on to the provinces, it took a few years for British Columbia to pick up the slack. This resulted in no surveys in 1997 or 1998, which were both critical to the mountain pine beetle increase. Better monitoring may not have changed the course of the outbreak, it could definitely have shaped a superior, more informed response.

Allan Carroll, now with UBC’s Department of Forest Sciences, advised the park service that the best plan was to “predict the outbreak’s size and determine what was driving it”(55). Instead, a series of war like tactics where employed in efforts to kill the beetles. First, nearly a million dollars was spent on a “fell and burn” program, which involved cutting down and burning individual infested trees. After this didn’t work, a “snip’n'skid” program was put into place, followed by a “hack and squirt”. Hack and squirt was cutting into the tree and then injecting arsenic into it. In 2006, it came out that the arsenic was not just killing beetles but in addition killing fifteen species of woodpecker, the beetle’s best natural predator.

In response to the ever-growing beetle outbreak, in 2001 the annual allowable cut was increased to “salvage dead wood”. At the same time stumpage fees were lowered and mills expanded, upping the production and transportation of beetle kill wood. Of course, this resulted in some unintended environmental consequences, such as the transportation of beetle infested trees creating outbreaks along the highways (63).

In 2001 the province also commissioned a review on the costs and benefits of clear-cutting the beetle kill (which of course, they were already doing). The results of the review showed that letting the dying trees stay allowed natural processes of forest regeneration to continue, while removing the trees negatively impacted wildlife diversity and habitat. According the Nikiforuk, the results of this review where ignored.

In 2009, The B.C. Forest Practices Board released a report about the clear cuts that concluded, “The ecological consequences of salvage harvesting on a spatial scale” had “no precedent globally”(100).

While this book offered interesting insight into what policy choices helped contribute to the mismanagement of the crisis, the real value of it comes from the personal accounts Nikiforuk collects. The book is mainly focused on the emotive aspect of the beetle outbreak, and how the forest destruction affects the people and the animals that depend on it. Through personal interviews and stories, Nikiforuk paints a truly tragic story of environmental ruin.

Andrew Nikiforuk. The Empire of the Beetle: How Human Folly and a Tiny Bug Are Killing North America’s Great Forests. Vancouver: Greystone Books and the David Suzuki Foundation. 2011.

For more information about the environmental effects of the mountain pine beetle epidemic in British Colubmia, journalist Larry Pynn had a 5-part series in the Vancouver Sun this past week.

Issues come and go, but the collapse of forestry on the agenda of the government of British Columbia is extraordinary. Yesterday’s Throne Speech did not contain the words forest, forests, or forestry.

I got curious and had some students go back and look at previous thrown speeches over the past decade to see if there was any precedent for this. The results from 2000 to present are on the chart below (click to enlarge). There was in fact one other Throne Speech during this period that did not mention forests – Gordon Campbell’s first in 2001. The mean for the 17 speeches over this period is 10 references, with a peak of 28 in 2003 and another in 2009.

I have no rigorous explanation for the trends, but the two peaks and then steady declines afterwards are quite striking. The first peak was Gordon Campbell’s “year of the forest” in 2003, when a big burst of forest legislation was brought forth, centered about the Forest Revitalization Act. That was a period of real policy action. The second peak was 2009, when the government wanted to appear responsive to the Great Recession and the crippling impact it has on the forest industry. It released a Forestry Roundtable report and there were a variety of initiatives coming Premier Campbell’s energy and climate initiatives with forestry. But little policy change emerged during that period, and as the government ran out of tools to attempt to reverse the decline in forest jobs, it seems to have dropped the subject all together.

The complete absence of forestry from the Throne Speech is indeed striking. Two-thirds of the province is covered with forests, and the condition of the forest is vital to many environmental services enjoyed by British Columbians. Despite the recent decline, product products are still, according to the 2010 State of Forests Report, “the most important export commodity accounting for 30% of the total value of B.C. goods exports in 2009.” Despite sharp declines in employment over the past decade, the forest products industry still provides nearly 60,000 direct jobs. For a Premier focused on creating jobs, the absence of a strategy that includes measures for the forest sector is surprising.

The only conclusion I can draw is that the Clark government simply does not see the problems of the forest sector as something the government has the tools to address at this point in time. No doubt, the rejuvenation of the softwood lumber conflict contributes to the wariness of an already reticent government.

New book from Luckert, Haley and Hoberg

September 20, 2011

Policy analysts and advocates frequently are left scratching their heads when policy changes that seem self-evidently superior to the status quo are not adopted. Forest policies in Canada are a fascinating example. Implemented mostly in the mid-20th century, most forest policy analysts believe that the current system is now anachronistic and unable to meet the aspirations for sustainable forest management in the 21^st century. This month, a new book on Canadian forest policy was released by UBC Press that explicitly makes this case: Policies for Sustainably Managing Canada’s Forests: Tenure, Stumpage Fees, and Forest Practices. The book was authored by two forest economists, Marty Luckert (University of Alberta) and David Haley (professor Emeritus from UBC), and a political scientist, me. We provide detailed comparisons of policies for tenure, stumpage, and forest practices across the Canadian provinces. It nests these comparisons within an analytical perspective of property rights theory and a concern for advancing sustainable forest management.

Barriers to Change

One set of insights emerging from the analysis is the barriers to innovative policy change. The book develops five categories of barriers to change:

1. Intellectual barriers refer to the fact that even when there is widespread consensus on the failure of existing policies, there may actually be significant disagreements among analysts about what would constitute superior alternatives to the flawed status quo. These differences can arise because of value differences, where analysts put different weight on what the most important consequences of policy are (e.g., economic efficiency vs. environmental protection). They can also stem from significant uncertainties about the outcomes of alternative solutions to policy reform.
2. Political opposition from those benefitting from the status quo can occur even if proposed changes are clearly in the public interest overall. Policy change inevitably alters the distribution of costs and benefits, so any meaningful policy change creates losers as well as winners. When these potential losers have substantial political power, they can be a formidable barrier to change.
3. Decision rules that advantage opponents to change can also thwart policy changes. Rules that require government to compensate the forest industry for lost tenure rights, for example, can discourage change in some circumstances.
4. Institutional mismatch occurs when there is an inconsistency between the jurisdiction promoting policy change and other governments. In Canadian forestry, for example, the provinces dominate forest policy, but the federal government has significant powers that it could exercise if it so chose. So a province’s efforts to embark on a significant change could be thwarted if the federal government disagreed.
5. Path dependence refers to the phenomenon that “once a policy or institutional path is established, entrenched mindsets, interests, and institutions make departures from the status quo difficult to envision” (p. 170)

These five barriers to change have proven quite formidable in the case of Canadian forest policy, but are also an effective way to think about the challenges to adopting new policies in other fields as well.

The book is now available for purchase, and UBC Press has made the introductory chapter available on-line.

The cover photo is of Pemberton Valley, 170 km north of Vancouver, from the amazing Mark Richards in Whistler.

Community-based management natural resource management has been increasingly advocated as an opportunity to improve natural resource governance. A new journal article that I’ve co-authored with Lisa Ambus examines a much publicized effort in this area, British Columbia’s community forestry program. As of 2010, the province has issued 6 long-term (25 year) Community Forest Agreements and 22 “probationary” agreements. The article focuses on how much authority has actually been devolved to communities in these new tenures. We find that, despite the initial vision to provide “local control over forests for local benefits,” the actual extent of devolution has been quite modest: “The new community tenure is, with a few modest exceptions, essentially a much smaller version of the province’s area-based industrial forest tenure.” In addition, the program remains quite small: “while the program has been significantly expanded, the total volume allocated to CFAs still only amounts to 1%” of allowable harvest levels in the province.

The main contribution of the article is the development of an analytical framework for determining the allocation of authority over forest management decision making between the provincial government and the community tenure holder. We create a matrix that examines a core set of decision functions, and then analyze legislation, policy, and license documents to determine who has the authority over what.

We recommend that if the province is serious about giving decentralization a chance, “the province should experiment with devolving more meaningful authority to community or regional organizations over strategic decisions such as allowable harvest level determinations.”

While this article applies the framework to community forestry in British Columbia, “this approach to assessing devolution can be applied to other jurisdictions to help gauge the sincerity of government claims regarding devolving control over natural resource management to communities.”

Lisa Ambus and George Hoberg. 2011. “The Evolution of Devolution: A Critical Analysis of the Community Forest Agreement in British Columbia.” Society & Natural Resources Available on-line at http://dx.doi.org/10.1080/08941920.2010.520078. Sorry for the pay wall for those without access through university or other libraries.

• For BC government information about community forestry, go here
• See also the British Columbia Community Forest Association
• An extremely influential contribution to our conceptual thinking is Ribot, J. 2002. Democratic decentralization of natural resources: Institutionalizing popular participation. Washington, DC: World Resources Institute.

Next week, after ten years as Premier of British Columbia, Gordon Campbell will hand power over to Christy Clark. Natural resource policy has been one of the most dynamic areas of policy development during the Campbell era. This blog provides an overview of the most significant policy changes during Campbell’s tenure in the areas of energy, climate and forest policy. (Other aspects of the environment portfolio are not addressed.) This overview is not intended as an evaluation of the merits of the changes, but rather a ranking of the ten most consequential developments. I also provide a list of the five most significant shortcomings in policy development during the Campbell decade.

There are some deep contradictions in the list. That is by design. Climate action and aboriginal reconciliation top both the lists of most significant changes and greatest failures. In my view,  this is an apt characterization of the immense challenges of governing natural resource policy in BC during the Campbell era.

The Top Ten Natural Resource Policy Changes under Gordon Campbell

1. Climate Action: The Campbell government legislated ambitious greenhouse gas reduction targets (33% reduction by 2020 over 2007 levels) and enacted ambitious policy instruments (the carbon tax, cap and trade, and government carbon neutrality) to pursue those targets. These initiatives made the province a North American leader in climate action and won Campbell kudos from the environmental community.
2. The New Relationship with First Nations: Gordon Campbell entered government as a confrontational opponent of aboriginal rights, but by 2005 underwent an extraordinary conversion into a champion of Crown-aboriginal reconciliation. The effort to legislate the New Relationship crashed spectacularly into the political abyss between the resistance of Cabinet and the aspirations of the province’s First Nations. But real progress in power sharing has been made in specific reconciliation agreements between the BC government and First Nations along BC’s coast.
3. The 2002 Energy Plan required that all new sources of electricity generation (other than Site C and upgrades to existing BC Hydro facilities) be developed by the private sector. Independent power producers and run of river power projects ignited outrage by the BC environmental community and public sector unions, and provoked a divisive split among environmental groups.
4. The 2010 Clean Energy Act shifted the objective of electricity supply from provincial self-sufficiency to being a net exporter of power. It also strengthened BC Hydro’s conservation mandate, requiring it to meet two-thirds of new demand through conservation measures. It also punished the BC Utilities Commission for having the temerity to reject BC Hydro’s 2008 long term plan by removing many of the regulator’s powers of review of BC Hydro activities.
5. The Forestry Revitalization Plan of 2003 introduced market-based stumpage pricing, reallocated 20% of the industry’s tenure, and removed a number of levers by which government controlled industry transactions within the sector. Among other things, this economic deregulation unleashed a wave of corporate consolidations that reshaped the sector.
6. The Great Reorganization of 2010 separated the policy and operational functions of five ministries, and consolidated operations into a new Ministry of Natural Resource Operations. Among many other consequences, the reorganization effectively dismantled the BC Forest Service that has been in continual operation since 1912.
7. The 2007 Energy Plan effectively banned new coal-fired power plants, set a bold target requiring BC Hydro to meet half of new demand through conservation, and shifted the objective of electricity policy from cost-effective reliability to provincial self sufficiency with reserves.
8. The Great Bear Rainforest agreement of 2006 brought an end to a decade long land-use dispute. The decision’s increase in protected areas and more eco-friendly logging standards led Greenpeace and ForestEthics to declare victory in their campaign to save the precious wilderness area.
9. Downsizing Natural Resource Agencies: The “free enterprise” element of the Campbell government has been keen to reduce the role of government in the resource sector, and it has certainly succeeded in terms of the decreased capacity of provincial resource agencies. The budgets of all the major resource agencies in 2011 were 15% below what they were when Campbell took office in 2001, and 37% below their 2006 peak (constant 2011 dollars, see Figure 1 below).
10. Bill 30 – in response to the Squamish-Lillooet Regional District decision not to approve the Ashlu Creek run-of-the-river power project, the provincial government passed legislation in 2006 stripping local and regional governments of the power to use zoning processes to block new energy projects.

The Top Five Natural Resource Policy Failures under Gordon Campbell

1. Climate Inaction: While promoting the climate action file with Schwarzeneggerian fervour, Campbell more quietly fostered the development of the province’s carbon-loaded natural gas resources. As a result, the real Campbell legacy on climate is one of hypocrisy, revealing the enormous challenges of the climate file even in jurisdictions blessed with abundant hydroelectric resources.
2. Dismal Progress in Treaty Settlement: Despite Campbell’s 2005 conversion to champion of aboriginal reconciliation, accomplishments in reaching long term settlement with First Nations have been sparse.  When Campbell came into office, no treaties had yet been proclaimed under the treaty process that began in 1991 (the Nisga’a agreement took place outside of the official treaty process). As of March 2011, only one treaty has been finalized through the process (Tsawwassen First Nation). There are seven agreements-in-principle but they have yet to be proclaimed, and an additional 41 still being negotiated.
3. The Softwood Lumber Dispute was a vexing challenge when the Campbell government entered office in 2001. Despite massive changes in forest policy designed to address American concerns, tens of millions of dollars in legal fees to Washington, DC law firms, and a major new bi-national agreement, the softwood lumber dispute remains a vexing challenge as Campbell leaves office. In perspective, though, softwood lumber has been a challenging issue in US-Canada trade since before Confederation.
4. Forest sector employment has taken a beating during Campbell’s tenure. Despite major policy changes designed to put the sector on competitive footing, forest sector employment has decreased 38% from 89,000 jobs in 2001 to 55,000 jobs in 2010 (See Figure 2 below). The change has been wrenching for forest-dependent communities throughout the province.
5. The Working Forest has been a spectacular failure. Despite being the number one priority in their 2001 “New Era” forestry agenda, the proposal to promote commercial investment in forestry by increasing the certainty of a working forest zone crashed and burned near the end of Campbell’s first term. Struggling for policy initiatives to address the enduring crisis in the sector, the idea was reborn as the Commercial Forestry Reserve as a result of the Working Forestry Roundtable in 2009. But it has gone nowhere since being rejuvenated. Meanwhile, the Campbell government never seriously considered or proposed more serious structural reform of the province’s anachronistic system of forest tenures.

I would like to thank Stephanie Taylor for research and writing help and preparation of Resource Ministry Budget Figures, and David M. Pérez for help with employment figures.

George Hoberg and Stephanie Taylor

October 27, 2010

On October 25, 2010, BC Premier Gordon Campbell announced a fundamental restructuring of the organization of the BC government with respect to natural resource management. The government created a new ministry, Natural Resource Operations, and moved many of the responsibilities of existing resource agencies – Energy, Agriculture, Forests, and Environment – to the new ministry. In announcing the changes, the government issued a press release listing the names of new organizations, their ministers and deputy ministers, and the new responsibilities of the ministries. But there was no public explanation or rationale provided for the change, so it is hard to evaluate the government’s thinking. The one quote in the press of a rationale from the Premier is that the change would “allow us to move forward in a comprehensive and integrated manner across the natural resource ministries.” In an internal email circulated among staff in several natural resource ministries, Doug Konkin, deputy minister and chief executive officer of the new Ministry of Natural Resource Operations, described the changes as “formaliz[ing] the “One Land Manager” concept” and better positioning BC to “attract global investment and turn proposed projects and investments into actual worksites and jobs.”

The changes have provoked criticism, including a public outburst by Bill Bennett, Campbell’s own Minister of Energy, that landed on the front page of the Vancouver Sun. Overlooking the well-established convention of cabinet solidarity, Bennett chastised the Premier for making fundamental changes to the organization of natural resources without consulting his caucus or cabinet. The decision was also criticized by a leading environmental group. West Coast Environmental Law expressed concerns about the reorganization creating undue emphasis on expeditious resource approvals at the expense of environmental protections:

The lawyers at West Coast Environmental Law are concerned that BC’s new Ministry of Natural Resource Operations will give industrial users ready access to the province’s natural resources without ensuring environmental protection. The environmental organization argued that the new Ministry was being created to help industry get quick government approvals and that this could well compromise environmental protection.

The Changes in Responsibilities

Figure 1: BC Government Natural Resource Management - Before and After

To display the shift in functions to the new Ministry of Natural Resource Operations (MNRO), we’ve constructed a flow chart that shows the allocation of responsibilities before and after Monday’s announcement, shown in Figure 1 (click on Figure to enlarge).  The main thrust of the change is to move operational responsibilities from sector-specific resource ministries to the new MNRO, but leaving the higher level policy development within the sector specific ministries. For example, forest authorizations, such as Forest Stewardship Plan and cutting permit approvals, has been moved to MNRO, but forest stewardship policy remains within the Ministry of Forests (now Forests, Mines and Lands but more on that shortly). Likewise, the Oil and Gas Commission, which approves oil and gas developments, has been moved to the new MNRO, but oil and gas policy remains in the Ministry of Energy.

[Update: For a copy of the OIC, go here. For a copy of Q&A from the government, go here.)

These changes are profound. They are likely to be particularly troubling to entities that have a strong organizational culture. The BC Forest Service, created in 1912, has been moved around and renamed a number of times in its history. But this is the first time we are aware of that core components of it have been divided between different ministries.

In addition to that separation of policy from operations, some policy responsibilities were shifted around. Mining was moved out of Energy and into Forests, and Crown land administration policy was moved from Agriculture to Forests. Forests gave range policy back to Agriculture. Oddly, part of the Integrated Land Management Bureau was moved to the new Ministry of Regional Economic and Skills Development.

The rationale for these changes is presumably to improve the coordination of natural resource operations to expedite approvals and facilitate resource-based economic development. This raises three questions:

1. Is it likely to work to rationalize the approval process?
2. Are there risks to other values as a result of the changes?
3. Is organization design the problem, or is it capacity?

Lessons from Past experience with integration

This is not the first time that the BC government – in fact the Gordon Campbell BC Liberals – has attempted to reorganize government natural resource functions to promote greater integration and efficiency in approvals. When the Campbell government came to power in 2001, it created what they hoped would be a new “super-ministry” in the Ministry of Sustainable Natural Resource Management to improve the integration of natural resource policy and operations. While the original hope was that the new Ministry would facilitate natural resource administration, the end result was that it frustrated it. The problem was that the consolidation of functions was too limited: the Ministries of Forests and Environment still retained significant authority. So instead of reducing transactions costs, the net result was the there was more “red tape” for resource industries. The government dismantled the Ministry of Sustainable Resource Management in 2005, and redistributed its remnants back to the pre-existing resource agencies.

The most organizationally unstable function is arguably one of the most important: land use planning. When the NDP government launched comprehensive land use planning in the 1990s, they coordinated interagency activities through a cabinet office known as the Land Use Coordination Office. The Liberals came to power and created the Ministry of Sustainable Resource Management and housed land use planning functions there. When that ministry was disbanded, the government created the Integrated Land Management Bureau (ILMB) and housed it within the Ministry of Agriculture and Lands. In 2009, ILMB was moved over to the Ministry of Forests and Range. In this latest reorganization, ILMB as such has disappeared. The fate of some of its responsibilities is unclear, but the once-pivotal responsibility for land-use planning has been relegated the new Ministry of Regional Economic and Skills Development. It is hard to see how that move will improve coordination of natural resource management in the province.

The risks of separating policy from operations

Reorganizations are typically designed to address a particularly salient problem, but frequently create unintended consequences. Concentrating all natural resource operations in one ministry may facilitate project review and approvals, but separating operations from policy might create other problems. One risk is that organizational learning might become even more challenging. Policy reform should be informed by operational experience, but if the feedback from that operational experience needs to cross more organizational boundaries, it is less likely to be communicated effectively.

Another risk is that policy signals might not be received as well, and it might be more difficult for policy makers to monitor implementation. This risk is the basis for environmental group concern that environmental values might receive less attention in the reorganization.

Is organizational design the problem, or is it capacity?

This major reorganization is based on a premise that the previous structure was deeply flawed. Another view is that the fundamental problem is one of capacity – the financial and human resources to perform the governance functions effectively. Insufficient capacity is a core part of the critique of the decision leveled in Energy Minister Bennett’s criticism of Campbell’s decision:

The fundamental problem facing the natural resource ministries is they’re underfunded. We work the heck out of them [the employees] and we don’t have enough funds within these ministries to get the permits out the door, to develop the policy, to deal with the stakeholders, to do the work that actually leads to the majority of the revenue that comes in to government.

An analysis of changes in resource ministry budgets and personnel does show a significant decline over the past several years. Figure 2 show budget trends over the past decade for three major resource functions (Environment, Forests, and land use) (constant 2010 dollars). Budgets did increase in the late 2000s and peaked in 2008 but have declined precipitously since then. The three resource agencies combined saw their budgets drop by 27% between 2008 and 2010.

These recent reduction in budgetary and staff resource suggest that capacity is a major challenge for the resource agencies. Perhaps the reorganization will help the government cope with this challenge, but Minister Bennett, for one, is skeptical.

Conclusion

These organizational changes are dramatic; they appear to be significantly bigger than the reorganizations that occurred early in the Campbell government’s first term. That earlier experiment was acknowledged to be a failure. Whether this new effort to improve the organization of natural resource management in the province will be more successful remains to be seen. It would certainly be useful for the government to provide its officials as well as members of the public with a clearer rationale for the changes that shows how the lessons from past efforts at redesign and the risks to coordination and learning have been considered and addressed

On Tuesday, March 31, 2009, the Government of British Columbia announced that it had “met its commitment to establish an Ecosystem-Based Management (EBM) system for coastal B.C. by March 31, 2009.” Agriculture Minister Ron Cantelon announced “The war is over. Now we can move on in a positive way). Valerie Langer of ForestEthics said “We have made tremendous ecological gains.” The Greenpeace Canada website proclaimed “Greenpeace is celebrating an enormous success—the protection of the Great Bear Rainforest. The government of British Columbia has announced the implementation of the most comprehensive rainforest conservation plan in North American history for the Great Bear Rainforest.” First Nations and forest companies also praised the deal.

My perspective

I have been following, writing, and teaching about the politics of coastal forest conflicts in British Columbia for almost two decades now. I have not been directly involved in the Great Bear Rainforest deliberations, with the minor exception of being a co-author of a report to the Coast Information Team. So I feel like I speak mostly as an outsider, but as one with some knowledge of policy in the region and a perspective detached from immediate stakeholders, and also as one deeply committed to conserving the extraordinary ecological values of the region. There, I’m breaking from the mould of the independent academic I’ve carefully cultivated over the years. But the Great Bear Rainforest is just too special a place.

From that perspective, I don’t share the celebratory mood of the environmental community. I honour the enormous amount of work done by all stakeholders in searching for common ground. I’m proud that the province has made such enormous strides in sharing governance with First Nations who have called the region home for millennia. But I’m also very disappointed in the conversation gains reflected in this announcement.

History leading up to this announcement

The media have made much of the significant amount of area protected by the government in this decision, one-third of the 6.4 million hectare region. But those decisions were previously announced in February of 2006 (to much international acclaim) and legislated shortly thereafter.

What this next round of decision-making has focused on are the rules guiding forest management activities outside of protected areas. Since 2001, the parties have agreed that the policy framework would employ “ecosystem-based management,” or EBM, in areas outside those formally protected. The general definition of EBM as it has evolved in the region is “an adaptive approach to managing human activities that seeks to ensure the coexistence of healthy, fully functioning ecosystems and human communities.”

However, the parties could not agree on what constituted EBM operationally. .A special collaborative science process was developed, called the Coast Information Team, that contained representatives from all major parties, and produced an EBM Handbook in 2004 that defined one version of EBM. However, the multistakeholder land use planning process going on at the same time did not adopt this definition. Industry, government, and First Nations representatives balked at the high levels of protection in the EBM Handbook and replaced them with a set of more modest “transitional management targets.”

The core issue:  old growth representation

One of the foundations of EBM has been the objectives for landscape level biodiversity, in particular the retention of old growth forest. The philosophy of EBM, at least before it was diluted with socio-economic objectives, is that resource management should reflect patterns of natural disturbance in the particular ecological system in question. The key guiding concept has been the “range of natural variation” that has existing historically in the ecosystem. The particular nature of this coastal rainforest ecosystem is one where the natural range of variation in the representation of old growth has been very high – above 90% for the dominant species in the region.

The EBM Handbook that resulted from the collaborative science process set a target of 70% for old growth forest representation at the landscape level. The transitional management targets resulting from the land use planning process, and embodied in the government’s 2006 land use decision, provided for only 30% of old growth forest representation. This difference was huge, and extremely divisive. Environmentalists could not agree to it as a long term target, so when Premier Campbell made his historic announcement in 2006, the government committed to “full implementation of EBM by the end of March 2009.” To environmentalists, full implementation meant the EBM Handbook target of 70%. Essentially, the 2006 decision was a constructively ambiguous compromise that postponed the resolution of the difficult conflict over old growth representation, until now.

The March 2009 decision

The core of the government’s new EBM decision is the commitment to “Low-impact logging regulations that will conserve 50 per cent of the natural range of old growth forests.”

The first point to make is that this region-wide commitment to 50% is a far cry from the landscape level commitment to 70% representation that environmentalists had been considering their bottom line. It’s exactly half way between what environmentalists wanted and what other parties wanted. A simple compromise by splitting it down the middle. Not necessarily a cause for celebration, but a gain over what government had agreed to previously.

The Fine Print March 2009 decision

But more important, my reading of the fine print suggests that this 50% goal is more of a general guideline than it is a legally binding target. For virtually all of the region, the real legally binding target remains 30% old growth representation.

The 50% target comes from the preamble to the Legally established Central and North Coast Amendment Order. It says “For the purpose of this order, the intent is to maintain old growth representation at 50% of the range of natural variation across the combined area covered by the South Central and Central and North Coast Orders.” The final sentence of the preamble states that “This preamble is provided for context and does not form part of the order.” In other words, this 50% representation target is not binding. It is uncertain what role this target will play in actual decisionmaking, for example whether a district manager could reject a management plan because it does not meet this target. I don’t think they could, but please comment if your interpretation is different.

We need to move to other parts of the order to search for the legally binding language. The order requires that operations maintain an amount of old growth in a landscape unit greater than the “default target”. These default targets are listed in a table in Schedule 4, and vary from 30% to 100%. (Where the landscape unit has less than the default amount, old forest needs to be “recruited” over the next 250 years.) Section 14.6 of the order provides that less than the default target can be retained if five conditions can be met. One of these conditions is that it not fall below 30% of the range of natural variation. The other conditions are as follows: 

·         Information sharing and consultation with First Nations

·         A landscape unit habitat assessment for species at risk and regionally important wildlife is completed by a qualified professional

·         Old forest is retained to provide sufficient habitat to sustain species at risk and regionally important wildlife, based on the above assessment

·         An adaptive management plan is developed and implemented to the extent practicable

These conditions do not appear to be significantly more onerous that those required by normal forest operations under the Forest Range and Practices Act outside of EBM areas. The first condition is already part of established practice (in fact seems to fall a bit short of it).  The second condition requires an assessment routinely performed as part of forest planning. The third condition might provide additional protections, but forest managers are already required to establish protection of wildlife if they are identified in need of protection by the government.  The clause at the end of the fourth condition provides a great deal of leeway to avoid an adaptive management plan, not that such a plan would necessarily shape the level of protection.

Perhaps I am misunderstanding the significance of the constraints embodied in these conditions. If so, please comment.

Bottom Line

It looks to me like the order is structured to indicate an aspiration to manage for 50% of the range of natural variation, but there is no legal requirement to manage beyond 30% (except in 9 of the 95 landscape units in the region).

This level of old growth protection falls far short of the standards set by the independent science team. I find it hard to justify the use of the term ecosystem-based management when the representation of old growth forests is so far below the natural range of variation.

What is remarkable about the Great Bear Rainforest is the extraordinary extent of intact coastal old growth temperate rainforest. A spectacular ecosystem, one of the dwindling great wild places on earth. Many are celebrating that we’ve “saved the Great Bear Rainforest.” I don’t see it that way. We’ve protected a third from industrial development (well, somewhat less than that since some of the areas allow mining). In the remaining two thirds, we’ve adopted a system of forest management that requires between 30 and 50% of old growth forest be retained. That decision allows a tremendous amount of forest fragmentation in a remarkably undisturbed part of the world.

The dismal state of forest products markets means that industrial pressures for logging the region in the near future are likely to be limited. And environmentalists have apparently gotten a commitment from the government to revisit the issue of moving up to 70% within 5 years. Maybe that means there’s continued reason for optimism. Based on this decision, though, the conservationist side of me is not feeling celebratory.

Further Information

For more information about the history of collaborative processes in the region, see Merran Smith, Art Sterritt, and Patrick Armstrong, “From Conflict to Collaboration: The Story of the Great Bear Rainforest.” May 2007.

Today the Government of British Columbia released the long-awaited report of its 21 member Forestry Roundtable. The Roundtable was chaired by Forest Minister Pat Bell, and its membership was heavily weighted towards government and industry, and also contained representatives from labour, communities, First Nations, and academia. Environmentalists did not participate as members.

Press conference for Report release - From left to right: Dave Porter, Kaska Dena Nation; Minister Bell; Derek Thompson, Associate Professor, Royal Roads University; and Tom Olsen, President, Triumph Timber

The vision and principles guiding the Roundtable, and the resulting recommendations, are provided in italics in full below. The report is available here.

I had one meeting with the Roundtable, but have not followed its deliberations closely. I have been teaching forest policy at UBC for 12 years, and the following themes strike me upon first reading.

1.       The report offers little near-term solace to the struggling forest sector and forest-dependent communities. But that is realistic. The causes of the deep crisis in BC forestry are largely beyond the control of government policy.

2.       In a further indication of the Campbell government’s commitment to reconciliation with First Nations, the report includes as one of its six priorities “First Nations becoming full partners in forestry.”

3.       Forging consensus for action among so many stakeholders is challenging under the best of circumstances, so it is not surprising that many of the recommendations are very vague. A telling example of overly vague recommendations is # 8 – “We should work to streamline transactions between government and industry to support a vigorous, efficient and world-competitive wood processing industry.”

4.       Several recommendations (e.g., #2 wood first in taxpayer supported buildings, #16 creating a Wood Innovation and Design Centre) were already announced in the recent Throne Speech or earlier.

5.       In some cases, instead of providing specific recommendations, the report simply encourages that policies be “reviewed” or actions should be “encouraged.” One example is # 3 – “We should review our forest management and silviculture practices to ensure that they encourage maximum productivity, value and support forest resilience.” This style of recommendation is discouraging to those who thought the purpose of the Roundtable was to perform this sort of review.

6.       Given the times, it is not surprising, yet still notable, that environmental values are barely mentioned. They do not show up explicitly in the priorities. In a 56 page report, the word biodiversity appears twice. While environmentalists might take some comfort in the absence of any specific indication of environmental deregulation, they will find little solace in the absence of commitment to maintaining strong environmental standards. The closest the document comes to such a commitment is a line on page 20 “At the same time we need to ensure we maintain sustainable forest management practices.”

7.       There are real indications of a commitment to diversify the mix of products. The report disparages the province’s mindset that “saw logs are the only forest crop” (p. 19), and talks about carbon credits and bioenergy. But the report is not specific on what actions need to be taken to move in this direction. For example, recommendation #15 states  “We must advance bioenergy and biofuel projects by creating competitive tenure and pricing frameworks to attract private sector investment.”

8.       There are real indications of a commitment to diversifying tenure arrangements. The Roundtable recommends giving First Nations larger, more secure area-based tenures, and recommends expanding community forestry. It also recommends (#5) enabling the establishment of short-rotation fibre plantations, and (#7) establishing “commercial forest land reserves for key portions of the current forest land base where wood production will be a primary focus.” The combination of these recommendations conforms to longstanding recommendations by policy observers that BC would be better off by having more refined and differentiated forest land use zones.

9.       While the commitment to tenure diversification should be applauded, the document is silent on how far the province should go, or how it should get there. It does not contain targets for either aboriginal or community forest tenures, although in a press conference Minister Bell said that they intend to increase those two categories from the current 10% to 20%. The report does not indicate from where the new land or harvesting rights would come.

10.   Recommendation #7 on the commercial forest land reserve sounds remarkably similar to the Campbell Government’s failed “Working Forest” proposal of its first term. Can the Working Forest, like a phoenix, rise from the ashes? It would be helpful to know how the government plans to overcome the obstacles that the Working Forest initiative could not.

11.   The text around both Recommendations #7 and #5 (“we should enable the establishment of short-rotation fibre plantations”) seems to flirt with the idea of granting more private rights to public land without ever coming out and using the P word – privatization. Given that privatization has proven to be the third rail of B.C. resource politics (see conflicts of Western Forest Products schedule A lands removal on Vancouver Island and current battle over private hydropower projects), it is not surprising the Roundtable chose caution.

These are immediate reflections based on one reading and several hours of thinking. Greater clarity in how Campbell government plans to pursue the substance and direction of the Roundtable’s recommendations will no doubt emerge as they are engaged by the NDP in the upcoming May election.

What follows are the text of the vision, principles, and recommendations from the press releases and backgrounders.

The Working Roundtable on Forestry’s vision is for “a vibrant, sustainable, globally competitive forest industry that provides enormous benefits for current and future generations and for strong communities.” The Roundtable Report sets six priorities to help achieve the vision:

1. A commitment to using wood first.

2. Growing trees, sequestering carbon, and ensuring that land is available from which to derive a range of forest products.

3. Creating a globally competitive, market-based operating climate.

4. Embracing innovation and diversification.

5. Supporting prosperous rural forest economies.

6. First Nations becoming full partners in forestry.

ROUNDTABLE RECOMMENDATIONS

1. We should continue to inform British Columbians and forest product consumers about the beauty, carbon friendliness, economic and other benefits of British Columbia’s forests and forest products.

2. All taxpayer supported buildings in British Columbia – federal, provincial and municipal must, and private sector buildings should, utilize and demonstrate wood and wood products whenever and wherever possible.

3. We should review our forest management and silviculture practices to ensure that they encourage maximum productivity, value and support forest resilience.

4. We should encourage the Western Climate Initiative to include forests in the identification of cap and trade opportunities for carbon credits.

5. We should enable the establishment of short-rotation fibre plantations.

6. We should establish a Carbon Offset Credit program for restoration of forests killed by the Mountain Pine Beetle where credits could be purchased.

7. We should establish commercial forest land reserves for key portions of the current forest land base where wood production will be a primary focus.

8. We should work to streamline transactions between government and industry to support a vigorous, efficient and world-competitive wood processing industry.

9. We should offer competitive bid timber sales as area-based sales and review our timber pricing system to ensure it is as simple and transparent as possible.

10. The provincial government and Union of British Columbia Municipalities should work with industry to ensure municipal tax structures support competitiveness and industrial activity in British Columbia communities.

11. We must establish labour arrangements that advance productivity and support competitiveness and investment while maintaining good working conditions and an adequate standard of living.

12. We should clearly define compensation rules for agreements between government and licensees, and in particular, what constitutes a taking of rights awarded through agreements and how compensation levels will be assessed.

13. We should establish clear competition policies to guide the transfer of tenure between licensees.

14. We should respond to the urgent needs of business, workers and communities during the current global economic downturn.

15. We must advance bioenergy and biofuel projects by creating competitive tenure and pricing frameworks to attract private sector investment.

16. We should establish a Wood Innovation and Design Centre focused on bringing together builders, architects, designers, artists and engineers to advance the commercialization of value-added wood building and design products.

17. We should create a forum to bring together leaders from the forest sector with those from chemical, energy, and other sectors to identify new wood based product and market opportunities.

18. We should continue to diversify forest product markets with particular emphasis on emerging markets such as China, ensuring that marketing efforts are sustained, coordinated and based on what end users want.

19. We should be proactive in exploring ways to ensure wood fibre is available for industry growth and product diversification while respecting tenure holders’ rights.

20. We should increase the percentage of fibre that is available through competitively-bid timber sales.

21. We should develop an internet-based wood market.

22. Logs that are surplus to British Columbia manufacturing needs should be exported until local manufacturing capacity exists. The surplus test currently in use should be reviewed to ensure it is rigorous.

23. We should expand the Community Forest Agreement Tenure program.

24. British Columbia forest policies should reflect the unique forest attributes and socio-economic circumstances in different parts of the province.

25. We should create more long term, area-based forest tenures that are of an economically viable size, and create legislation for a First Nations forest tenure.

26. Revenue-sharing with First Nations should be proportional to the value of timber harvested in their respective territories instead of being calculated on a per capita basis.

27. We should encourage business and First Nations to become full partners in forestry businesses, in particular in emerging areas of opportunity including biofuels, bioenergy, carbon and reforestation.

28. We should strive to build capacity among First Nation governments, First Nation forest corporations and First Nation forestry institutions to achieve full participation in forest activities.

29. We should collaborate with First Nations to involve First Nations youth in forest employment opportunities.