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  • The billion dollar scam


    James Steidle
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    If a forestry company isn’t providing mill jobs with its tree farm licences or forestry licenses to cut, fair compensation for taking back those licences should be $0.

     

    LARGE MULTINATIONAL FORESTRY COMPANIES in BC earning billion-dollar profits have pulled a fast one on us.

    They want us to think the rights to the forests are actually theirs. If we wanted our forests back for some reason—say to make them accessible to community-oriented mills, or to stop spraying glyphosate on fire-resistant deciduous and work with mixed forests not against them, or to preserve old-growth—we would need to pay a ransom collectively worth billions of dollars!

    Our wild-west history is replete with stories of cattle barons, outlaw gangs and octopus-tentacled monopolies extracting wealth from the public domain. This is only the latest chapter. Yet the scale of the new thievery promises to put anything before it to shame.

    A little history is required.

    First of all, across much of BC we have publicly owned forests. Nobody ever bought them, and nobody ever paid the public any money to secure exclusive access to them. This is the key point.

    For example, a vast tract of forest north of Prince George—now within the Mackenzie Timber Supply Area (TSA)—was divvied out to British Columbia Forest Products back in the 1960s.

    BCFP never paid for the timber rights. But they did pay for construction of a pulp mill and two sawmills in the community of Mackenzie, providing numerous local jobs and community benefits in return.

    From day one, the requirement to get access to public timber was to provide community benefits. “Trees for jobs” was the mantra. And it was on this basis that we provided access to timber. This was a requirement of the Forest Act at the time. The 1990 Review of Forest Tenures in British Columbia clearly states that the Forest Act granted tenures in exchange for “employment opportunities and other social benefits,” along with “managing for water, fisheries and wildlife resources.”

    We were never paid cash for the tenures. We were paid in economic, social, and environmental considerations.

    Canfor ended up with the tenure when they bought the Mackenzie Mill. So now that Canfor has closed its sawmill and is no longer providing local jobs in the community of Mackenzie, surely the tenure should revert to the public—the same way it was originally transferred to the private sector. For free and at no cost, and simply on the basis of what the public gets in return.

    Yet the corporations are convinced the timber rights are theirs now. Personal private property that they can exploit to the maximum degree with no consideration for wildlife and fisheries. Property which they can now turn around and sell to someone else to do the same. And for which we, the public, will have to pay dearly if we ever want them back.

     

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    A recent Council of Forest Industries report on the $70 million sale of Canfors forestry licences to cut in the Mackenzie Timber Supply Area

     

    Somewhere along the line, the exact details obscured by the passage of time but the outcome surely a result of the relentless drumbeat of corporate power chipping away at our sense of community, a metamorphosis has occurred: public forests have become property that corporations can sell.

    This is a preposterous situation, duly noted by Mackenzie mayor Joan Atkinson. In 2020, after Canfor closed its Mackenzie mill, Atkinson asked why Canfor was selling (to Dunkley Lumber) rights to uncut, publicly owned timber before stumpage had even been paid. What right did Canfor have to profit when it was no longer providing jobs or community benefits? Those jobs had been shifted to Quesnel, 264 kilometres away.

    I have a theory for why they are so committed to this perplexing illusion. Obviously, they have money at stake, but how did money come to be at stake?

    The answer is found in the past decades when the big players swallowed up all the small independent mills. When they did so, observers at the time thought the big companies were paying too much for the mills. And they would have been, if the janky old mills were all they thought they were buying. But in the companies’ minds, they were buying not just the sawmills, but also the associated timber rights. The original mill owners, who never paid a cent for the timber rights, reaped this inflated windfall.

    In short, the big companies paid dearly to establish their empires because they thought they purchased the public timber rights, an asset they imagined in itself to be in addition to, and perhaps separate from, the actual mill providing the community benefits. They created a non-existent product in their own minds, and they made this purchasing decision knowing full well the law required community benefits in return. Their goal was obviously to make this public asset theirs. But those pesky mills and the jobs they provided were in the way.

    Luckily for the corporations, they got their big break in 2003 when “appurtenancy” was eliminated. Up until then, a TSA had to supply the local mill. Now logs could be shipped from anywhere within the company’s patchwork of multiple tenures and that paved the way to close the little mills and expand their big ones. We would still get “jobs for logs,” just less of them, and in less places, and this was justified on the bogus basis of rationalization and maintaining global competitiveness.

    More critically, this helped create the myth that a tree farm licence (TFL) and forestry licences to cut could stand as tradable assets belonging to the licensee, now that the local mill was no longer necessary.

    It didn’t happen all at once. But over the years, one by one, small mills and their communities like Upper Fraser, Clear Lake, Isle Pierre, and countless others, disappeared. And with each mill closure, blamed on external market forces, the public’s memory of the link between jobs and logs faded. The old contract was blurred and obscured by turmoil in the industry as 50,000 out of 100,000 forestry jobs disappeared into thin air.

    Those mills and jobs disappeared, but rest assured the big corporations hung onto their old timber rights, even as mills in communities like Fort Nelson sat idle for years, wreaking economic ruin on the community, a blatant violation of the terms by which the tenure was originally granted.

    Nobody challenged them on it.

    And so now companies like Canfor are taking their next big leap of faith, hoping we are all asleep. It appears many of us are. The companies are now attempting to fully monetize these mill-less tenures as a separate asset altogether. Their original plan is at play. This is insane. This has happened with Canfor’s apportionment of the AAC in the Fort Nelson TSA, which it sold to Brian Fehr’s Peak Renewables in a deal that was finalized just last November. In reality, Peak Renewables is an affiliated company of Canfor’s. This is, potentially, what will happen to Canfor’s share of the cut in the Mackenzie TSA, too, with the proposed $70 million sale to the McLeod Lake Indian Band.

    These third parties should be aware of what they are buying. Separated from community benefits, a TFL or a forestry licence to cut are ultimately fictitious products. Sure, companies can buy and sell their imagined timber rights amongst themselves, as long as there is one greater fool to buy the snake oil, as Canfor once was, or which the government may be. But ultimately, the public owns the land, owns the forest, never sold the rights to access them to begin with, and with new legislation in place, can take it back for “fair compensation,” whenever we like.

    The big question going forward will be what entails “fair compensation.”

    The companies and the corporate press want us to think this compensation is stratospheric in value, maybe worth billions. They say we have to respect private property rights. But how? It never was their private property. And since the corporations have mostly reneged on the terms of the original deal, have neglected to protect wildlife populations, and since the hard mill assets have been capitalized and most of those jobs have evaporated—along with the communities—the notion of “fair compensation” for an abandoned, liquidated “asset” like Canfors licences to cut in the Mackenzie TSA, beyond $0, is an illusion.

    Here’s what should happen in that case: The Mackenzie TSA licences should revert to the Crown, the cutting rights then doled out to entities like the Macleod Lake Indian Band, or a community-based company, and the basis of the original agreement—trees for jobs—is re-affirmed. The assets and property of the shuttered Mackenzie mill are Canfor’s to sell as they see fit. That’s the extent of their “private property.”

    At the end of the day, when the political leaders of British Columbia handed access to public timber to the private sector over 60 years ago, the spirit and intent was to do so with conditions of environmental responsibility, employment and community benefits. That was the political contract, and despite what you may hear, or what you don’t hear, that original contract never changed.

    At no point did we ever pass a law saying or intending that we were to give timber rights away altogether with no expectation of employment, community, or environmental considerations in return. We never elected a single politician or government who said they would do this. In other words, that we would allow private companies and oligarchs to completely monetize exclusive access to a public asset and exploit it with nothing for the public in exchange, like what we are seeing today.

    We should all stop pretending that we did.

    James Steidle grew up south of Prince George in the bush and worked as a treeplanter for 3 years and in Clear Lake Sawmills for 4 years.  He currently runs a woodworking company and works with aspen wherever he can. He is a founder of Stop the Spray B.C.

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    Guest Herb Hammond

    Posted

    Hi James---
    Great article about the evolution of "forest" tenure.  I really like the history of tenure arrangements that you lay out so clearly in your paper.  Thank you for putting this together.  The case is abundantly clear that tenure arrangements need to be cancelled and we need to get on with defining and enshrining in law a new kincentric relationship with forests.  The responsibility for this new relationship is vested in a publicly accountable agency, co-managed by Indigenous Nations and settler government.

    One last kick at the compensation can:  From my perspective, not only is no compensation owed to large companies that hold tenure, but those companies owe the general public, and Indigenous Nations in particular, compensation for damages to the ecological integrity and resilience the of land and water they have degraded.  This compensation would include costs associated with restoration, lost opportunity costs for using the land and water in ecologically sustainable ways, and costs of lost employment.  All three of these "heads of loss" have established methods for their determination.

    Time to send large timber companies a bill for their past and ongoing damage to the forest and the public interest therein.
    Herb

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    Pretty simple really. But , I'm sure in some how or some way it will get very complicated.

    You can't legally sell something you don't own. That would be be fraud.

    So all Canfor has to do is produce a sale's agreement (even though it may be 60 years ago) for the TSA showing who they bought it from and a legal deed of ownership.

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