Competitivenessand Innovation Branch
Competitivenessand Innovation BranchData source: B.C. Stats2
Long history of responsive policies Log exports from old temporary tenures firstbanned in 1891 Some exports permitted in...
Competitivenessand Innovation Branch 4Potential exporters need to show that logs:– are surplus to the needs of domesticman...
Competitivenessand Innovation Branch 5Log exports from pre-1906 private land in B.C.must also be surplus to domestic needs...
Competitivenessand Innovation BranchGenerating More Wealth from British Columbia’sTimber: A Review of British Columbia’s L...
Competitivenessand Innovation Branch 7Support log exports:• Private landowners• Market loggers• First Nations• Major Licen...
Competitivenessand Innovation Branch 8Economics of log exports:“Log  exports  are  primarily  a  symptom,  not  a  cause, ...
Competitivenessand Innovation Branch 9Recommendations:1. Adjust fee-in-lieu to reflect lumber export tax2. Negotiate free ...
 Many written submissions received◦ No clear consensus Policy did not change◦ Timing was not right, due to recession10
 Jobs in forest industry are down US market and stumpage rates are down Lumber and log exports to China are up Share o...
Competitivenessand Innovation BranchB.C. Forest Sector Employment (persons), 2001 - 20102001 2002 2003 2004 2005 2006 2007...
Competitivenessand Innovation BranchData sources: US Census Bureau and Statistics Canada.Competitivenessand Innovation Bra...
Competitivenessand Innovation Branch 14
Competitivenessand Innovation Branch Rapidly growing economy Value of B.C. lumber exports to China in 2010 were10 times ...
Competitivenessand Innovation BranchSource: B.C. Stats16
Competitivenessand Innovation BranchU.S.51.7%Japan39.7%South Korea5.9%China +Hong Kong1.8%OtherDestinations0.8%B.C. Log Ex...
Competitivenessand Innovation Branch 18LogLog exportexport volumevolumeStructural changes in the industry and marketsStruc...
Competitivenessand Innovation Branch 19
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Log Export Policy Meeting — July 2011

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Presented by Tom Niemann, on behalf of the Ministry of Forests, Lands and Natural Resource Operations, at the Log Export Policy Meeting - July 20, 2011 in Richmond, BC.

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Log Export Policy Meeting — July 2011

  1. 1. Competitivenessand Innovation Branch
  2. 2. Competitivenessand Innovation BranchData source: B.C. Stats2
  3. 3. Long history of responsive policies Log exports from old temporary tenures firstbanned in 1891 Some exports permitted in 1901 Export prohibition extended to Crown landgranted after 1906 Some exports permitted in 1909 Export of “surplus” permitted in 1916 First Log Export Advisory Committee in 19183
  4. 4. Competitivenessand Innovation Branch 4Potential exporters need to show that logs:– are surplus to the needs of domesticmanufacturers; or– cannot be economically processed in theprovince; or– export will improve utilization & prevent waste.Applies to Crown land and some private landSurplus test procedureFee-in-lieu of manufacturing
  5. 5. Competitivenessand Innovation Branch 5Log exports from pre-1906 private land in B.C.must also be surplus to domestic needs.Same surplus procedure as provincial logs.All logs exported from Canada require a federalpermit.Fee-in-lieu of manufacture is not applied tologs under federal jurisdiction.
  6. 6. Competitivenessand Innovation BranchGenerating More Wealth from British Columbia’sTimber: A Review of British Columbia’s LogExport Policies Views on log exports Economics of exports RecommendationsCompetitivenessand Innovation Branch 6
  7. 7. Competitivenessand Innovation Branch 7Support log exports:• Private landowners• Market loggers• First Nations• Major Licensees *• Pulp & papercompaniesOppose log exports:• Independent sawmills• Rotary (veneer) mills• Organized labour• Environmental groups• Communities ** Some exceptions
  8. 8. Competitivenessand Innovation Branch 8Economics of log exports:“Log  exports  are  primarily  a  symptom,  not  a  cause,  of  the  economic  problems  facing  the  coast  industry.”If there are restrictions on export of processedproducts, log export restrictions need to consider andbe calibrated to these. (Softwood Lumber Accord)“The  key  issue  in  the  Coast  Forest  Region  and  in  the  northern transition zone of the Interior Forest Regionis  the  economics  of  hemlock  and  balsam.”
  9. 9. Competitivenessand Innovation Branch 9Recommendations:1. Adjust fee-in-lieu to reflect lumber export tax2. Negotiate free trade in logs from private land for lumber from private landexempted under Softwood Lumber Accord3. Stimulate harvesting of hemlock and balsam4. Permit export of lower grades of western redcedar and yellow cedar, with atransitional fee-in-lieu5. Simplify operation of the surplus test for private forest land6. Special considerations for small Crown licences and small privatelandowners7. Considerations for First Nations and new entrants8. Second growth strategy9. Free trade in logs with the US as part of a lumber deal
  10. 10.  Many written submissions received◦ No clear consensus Policy did not change◦ Timing was not right, due to recession10
  11. 11.  Jobs in forest industry are down US market and stumpage rates are down Lumber and log exports to China are up Share of log exports going to US has shrunk Log exports (Provincial jurisdiction) are up Total log exports are about the same11
  12. 12. Competitivenessand Innovation BranchB.C. Forest Sector Employment (persons), 2001 - 20102001 2002 2003 2004 2005 2006 2007 2008 2009 201088,600 86,100 91,100 80,400 79,700 81,600 84,200 64,900 52,000 55,50024.7 25.3 27.7 21.5 21.6 21.7 24.3 17.4 13.9 16.648.9 43.849.046.9 45.8 44.8 44.734.327.229.115.017.014.412.0 12.3 15.1 15.213.210.99.823.2%22.0%21.9%18.4%17.6% 17.6% 17.0%12.9%11.6% 12.3%4.6% 4.4% 4.5% 3.9% 3.7% 3.7% 3.7%2.8% 2.3% 2.4%0.0%5.0%10.0%15.0%20.0%25.0%01020304050607080901002001 2002 2003 2004 2005 2006 2007 2008 2009 2010thousandspersonsForestry and Logging with support activities Wood Product ManufacturingPaper Manufacturing As %of Goods-Producing SectorAs %of all industriesCompetitivenessand Innovation BranchSource: Statistics Canada – Labor Force Survey12
  13. 13. Competitivenessand Innovation BranchData sources: US Census Bureau and Statistics Canada.Competitivenessand Innovation Branch 13
  14. 14. Competitivenessand Innovation Branch 14
  15. 15. Competitivenessand Innovation Branch Rapidly growing economy Value of B.C. lumber exports to China in 2010 were10 times 2005 level China became B.C.’s #1 lumber market in May 2011 At least 10 mills opened since 2009 to serve China Value of B.C. log exports to China in 2010 were 12times 2005 level China became B.C.’s #1 log market in Jan–May 201115
  16. 16. Competitivenessand Innovation BranchSource: B.C. Stats16
  17. 17. Competitivenessand Innovation BranchU.S.51.7%Japan39.7%South Korea5.9%China +Hong Kong1.8%OtherDestinations0.8%B.C. Log Exports in 2005 ($540 million)U.S.9.3%Japan35.9%South Korea21.4%China +Hong Kong32.5%OtherDestinations1.0%B.C. Log Exports in 2010 ($377 million)17
  18. 18. Competitivenessand Innovation Branch 18LogLog exportexport volumevolumeStructural changes in the industry and marketsStructural changes in the industry and markets
  19. 19. Competitivenessand Innovation Branch 19

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