Forest Revitalization Policy Change Legislation Overview

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Forest RevitalizationPolicy Change Legislation
Overview

• May 14, 2003

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Legislation Overview

• Forest Revitalization Policy Change Legislation
  includes
• Bill 27 - Establishing the legal authority for
  BC Timber Sales
• Bill 28 - Tenure reallocation and compensation
• Bill 29 - Tenure related policy change
• Bill 45 - Pricing related policy change

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Bill 27

• Establishes the legal authority for BC Timber
  Sales
• BCTS managers can issue timber sale agreements,
  administer program, etc.
• Supports market based pricing
• Closes log export loopholes
• Removes daily production restrictions on woodlot
  licences

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Bill 28

• Established which volume subject to takeback or
  reallocation
• For affected companies or groups, set the total
  reallocation amount
• 200 million set aside for one-time funding of
  compensation
• BC Forestry Revitalization Trust established -
  75 million

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Bill 29

• Forest (Revitalization) Amendment Act, 2003
• Focus of the Act is tenure related policy change
• Act will be brought into force by regulation

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Bill 29 Makes Changes To ...

• Subdivision and consolidation
• Transfers
• Cut control
• Appurtenancy and processing requirements
• Mill closures
• Extensions and surrenders

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Subdivisions

• Must instead of may language
• Applies to Forest Licences, Tree Farm Licences,
  and Pulpwood Agreements
• Forest management concerns only basis of refusing
  a subdivision

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Transfer of Tenures

• Ministerial consent replaced by a notification
  concept
• Transfer proceeds unless there are competition or
  bill payment concerns

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5 Takeback and Job Creation Plans

• 5 takeback provisions eliminated
• Existing JCPs monitored for three years

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Cut Control

• Elimination of annual minimum and maximums
• Elimination of five year minimum cut control
  requirement
• Introduction of a variable five year cut control
  period
• No undercut carry-forward

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Appurtenancy and Timber Processing

• New awards will not include
• Unless enforcement action has been taken,
  requirements removed from existing
• Replaceable licences
• Non-replaceable Forest Licences 10 years of
  age or older

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Mill Closures

• Elimination of mill closure section
• Companies no longer penalized for closing
  uneconomic mills

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Symmetry

• For volume sold at auction
• The terms and conditions of sale must be well
  defined
• Harmful speculation should be minimized
• To use auction prices to set stumpage for CPs
• Attributes of TSLs and CPs need to be as similar
  as possible

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Extensions and Surrenders

• TSLs
• Term of licence capped at 4 years
• Most licences expected to be 2-3 years
• Fee for extensions (in legislation)
• Surrenders possible if no previous harvesting
• Forfeit of deposit
• Ministerial waiver in limited circumstances

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Extensions and Surrenders

• CPs
• Maximum term of 4 years
• Fee for extensions (by regulation)
• No specific surrenders provisions
• CP is not equivalent to a licence
• But
• Take or pay approach means waste bill will be
  issue if harvesting has occurred

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Bill 45

• Forest Statutes Amendment Act (No. 2), 2003
• Focus of the Act is pricing related policy change
• Approach is take or pay competitive bid
• Implementation continues to be linked to softwood
  lumber

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Utilization

• Elimination of cut and remove requirements
• Strengthening of waste billing requirement (take
  or pay)

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Replacement Provisions

• Replacement period for TFLs and FLs will be up to
  10 years
• Flexible 5 to 10 year replacement period
• Will facilitate workload redistribution
• Transition provisions
• New period applies retroactively if statutory
  deadlines have been missed

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Timber Sale Licences

• All new licences competitively bid (bonus bid or
  bonus offer)
• Section 21 repealed
• Bidding on Section 20 category 2 sales restricted

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Timber Sale Licences

• Conversion of existing replaceable Timber Sale
  Licences to other licence types
• New licence to cut category created
• Limited direct award provisions remain
• TSL holders can choose from multiple options

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Forest Licences

• All new Forest Licences (replaceable and
  non-replaceable) awarded on the basis of highest
  bid price
• Bonus bid or bonus offer

22
Tree Farm Licences

• New TFLs awarded competitively
• For new licences, private land contributions
  optional

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Pulpwood Agreements

• No new pulpwood agreements
• Annual rent re-established for issued TSLs
• Issued TSLs will become part of new licence to
  cut category

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Community Salvage Licences

• Community salvage licences created
• Intent is to ensure strong community linkages
• License can be issued for
• Waste (left on site after logging operations have
  concluded
• Removal of dead, damaged, diseased, infested or
  windthrown

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Sealed Tender

• Provision for oral auctions removed

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StumpageRevenue protection

• Auction based pricing means waterbed will be
  eliminated
• Forest management obligations prescribed by
  Treasury Board
• Administrative actions (rebill, penalty) for
  inaccurate appraisal data
• Collusion penalties

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Appraisal Data

• Accurate information a requirement. If
  inaccurate information submitted
• Administrative penalties enabled
• Stumpage re-determined and the correct rate
  applied as of the date the wrong rate
• An additional lump sum penalty may also be
  levied.
• A due diligence defence will be available.

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Stumpage Determination Appeals

• Stumpage Determinations
• The internal MoF review of a stumpage
  determination made by an employee of the ministry
  will be removed
• Such decisions can still be appealed to the
  Forest Appeals Commission

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Collusion Prevention

• Increased collusion penalties if
• A person or a corporation is found to have
  colluded, or via threat or intimidation tried to
  rig the bidding for a timber sale
• Possible penalties
• Cancellation of other agreements that could have
  benefited
• Disqualification from bidding
• Monetary penalty