No-ExcusesIf you’re a forest owner, a tree grower or a land manager you know it takes significant investment and decades of careful stewardship to grow a commercially valuable timber crop. Getting the best value for your harvested timber is essential for sustainable forest management, economic stability, re-investment in your land and future crops.

In British Columbia (and only British Columbia), private landowners are subject to log export restrictions that restrict our ability to get the best value for our crops; specifically, Federal Notice to Exporters 102.

The graph below illustrates the price difference between international, domestic U.S. and domestic B.C. markets for a specific grade of Douglas fir logs (‘J’ Grade, 8” to 11” top diameter).

You can see a close relationship between the international and Washington state lines on the graph in both price and responsiveness to market changes. In contrast, the green line, representing B.C. domestic prices, shows less responsiveness to market changes and significantly lower prices.

A graph showing price difference for J grade Douglas fir logs

The surplus test under Federal Notice to Exporters 102 is the reason for the price gap.

The federal surplus test is where government subverts competition and substitutes real international log prices by encouraging mills to offer artificial, made-up ‘domestic’ (much lower) prices to block export permit applications from private timber growers.

This is a problem for B.C.’s forest owners. Unfortunately, it’s not a new problem. This year marks PFLA’s 20th anniversary. That’s 20 years of working diligently for access to fair timber prices for our crops.

Here’s some context. When we first started thinking about this policy file Bill Clinton was president, DVDs were just invented, Braveheart won best picture, and POGs were all the rage.*

A lot can change in twenty years (see above paragraph), but one thing that hasn’t changed much is the list of lame excuses for maintaining log export restrictions on private land.

Here it is: the top five lame excuses for maintaining N102 (in no particular order).

1. Log Shortage (Despite a Significant Surplus of Logs on the B.C. Coast)

The rationale for the most recent (1998) iteration of the federal log export restrictions was fear of a shortage of available logs for processing on the coast of British Columbia.

The numbers speak for themselves. In 2013, harvested timber volume exceeded coastal mill consumption by 6.6 million cubic meters.

In other words, there is no log shortage and this is a lame excuse.

Under these circumstances, the sole purpose for maintaining a surplus test, using domestic log prices as the measure, is to suppress log prices and provide a direct subsidy to domestic mills.

2. A Bargaining Chip in the Softwood Lumber Negotiations

Historically, the U.S. cites log export restrictions as in irritant in the Softwood Lumber Agreement (SLA), pointing to log export restrictions as evidence of a subsidy-based model in Canada.

When forest owners approach the federal or provincial government and request the removal of log export restrictions from private land, typically, one of the responses we hear goes something like this:

“Well, you know, we’ve got the softwood lumber discussions coming up and this could potentially be an important and valuable tool for us in our SLA negotiations.”

This isn’t our first rodeo. U.S. trading partners have tabled log export restrictions from private land as an issue during SLA negotiations for decades now, and not one inch of progress has been made.

3. Log Export Restrictions are Necessary to Protect Canadian Mill Jobs

The excuse that log export restrictions are necessary to protect Canadian mill jobs is lame because it’s not true. Log export restrictions have not protected Canadian mill jobs. A lack of fibre is not the reason mills are closing. (See lame excuse #1 re: log surplus.)

The virtual collapse of the coastal processing sector, and the lack of globally competitive processing facilities on the B.C. coast, is proof enough that artificially suppressed log prices are not the solution.

If you’re serious about reducing log exports you need to create a competitive processing sector — the inability to compete is why mills have closed and why they will continue to close.

4. Log Export Restrictions Encourage Investment (in other countries)

There has been no significant or meaningful investment in coastal B.C. mills for some time now. Log export restrictions have not encouraged investment in the processing sector, or rather, they have, but in other countries.

Canadian lumber companies aren’t investing in Canada, they’re investing in Washington where, notably, no private land log export restrictions exist.

5. It’s Politically Risky

For twenty years now we’ve heard the same lame excuse, from both provincial and federal governments, about how politically risky it is to remove log export restrictions from private land.

Like we mentioned earlier, a lot can change in 20 years. When we first started arguing for the removal of log export restrictions (back when POGs were cool and Chretien was prime minister) log export volumes were about 300, 000 cubic metres and almost entirely from private land.

Today, log export volumes have increased significantly and the majority of B.C.’s log exports are from provincial Crown land.

Between 2007 and 2014, B.C.’s log export volumes doubled from 3.1 million m3 to 6.3 million m3. During that same period, private land log exports were down by about 3%, while Crown land log exports increased by about 606%.

Maybe the issue of log exports isn’t so politically risky after all?

Why List the Top 5 Lame Excuses?

In case it’s not obvious. The point in listing the top 5 lame excuses is to illustrate there is no defensible policy rationale for maintaining log export restrictions on private land anymore.

Twenty years is a long time to push for change. In the words of one founding PFLA member:

“[…] How can we encourage owners of forested land to look after their forest and treat it as an asset when it is all too clear that the provincial and federal governments will see to it that a profitable operation is impossible? What I find even more disappointing though is the fact that after 20 years of banging our heads at a brick wall with only sore heads and empty pockets to show for it, we are now in essence being urged to bang harder.”

(from the comment section of an earlier post)

* Thanks to astute readers of an earlier version for noticing our contextual references were off by a decade.