APPENDIX 6
THE TIMBER TENURE SYSTEM
Ninety-four percent of the land base in British Columbia is Crown land, owned by the public and managed by the provincial government, in some cases for commercial purposes such as resource extraction. The use and management of forest resources is influenced by the historic allocation of resource rights to various parties. The legislation, regulations, contractual agreements, policies and permits that allocate rights to forest resources to different licensees are collectively referred to as the "timber tenure system."
The provincial government administers a wide variety of tenure agreements, throughout the province. Many of the forestry tenures in BC originated in the 1950s, although the current structure was established under the 1978 Forest Act.
The table on the following page lists the eleven types of forest tenure agreements in BC and describes the rights and responsibilities associated with each one.
Rights granted under a tenure agreement may be exclusive or non-exclusive, depending on the terms of the agreement. Some tenure agreements, such as tree farm licences and woodlot licences, grant a single licensee the exclusive right to harvest timber within a defined area. These are often referred to as "area based tenures." Others, such as forest licences, grant the rights to a certain volume of timber, but allow more than one licensee to harvest timber within the same operating area. These are known as "volume based tenures."
Tenure agreements under the Forest Act include several provisions intended to provide security to licensees, their employees and contractors. For example, certain provisions require that replacement tenures be offered by the government every five years in perpetuity; these licences, if accepted, supercede the previous agreement. If the new licence is not accepted, the existing licence will run its designated term and then expire. The exercise of tenure rights is contingent on the approval of management plans and operational plans, which must accommodate public non-timber values.
These clauses are intended to grant secure rights of ongoing access to public resources for tenure holders while still maintaining some flexibility by allowing the terms and conditions of the licences to change as they are replaced.
Many tree farm licence and forest licence tenures also have "appurtenancy clauses" which require that licence holders process the timber they harvest, or an equivalent volume, in a manufacturing facility that they own or operate. This is intended to provide community employment and security to mill workers. In order to provide security for contractors, certain licences stipulate that the holder harvest a minimum percentage of their AAC using contractors. The relationship between licensees and contractors is governed by the Timber Harvesting Contracts and Sub-contracts Regulation.
The Forest Act also contains "cut-control" provisions intended to provide flexibility in cutting levels which is responsive to annual variations in market demand, while still maintaining some continuity in forest worker employment and government revenue from stumpage. These provisions specify that major licensees, such as holders of forest licences and tree farm licences, must harvest within plus or minus fifty percent of their AAC within any one year, and within ten percent of their AAC in each consecutive five-year cut control period. These provisions represent a "use it or lose it" policy in which unused timber cutting rights may be forfeited. Other provisions intended to provide security to licensees, employees and contractors include limitations on the export of raw logs and constraints on the ability to sell or transfer licences.
For further information contact the Resource Tenures and Engineering Branch of the Ministry of Forests at (250) 387-5291.
SUMMARY OF TIMBER TENURES IN BRITISH COLUMBIA
Tenure Rights Responsibilities Term and Scale Tree Farm Licence
(TFL)• Almost exclusive right to harvest an AAC from the licence area, under cutting permits • Right to carry out forest management on a specific area of Crown land
• Area based tenure
Licensee is responsible for: • Resource inventories
• Strategic and operational planning
• Road building and reforestation
• 25-year term; replaceable every five years • Approximately 24% of the AAC in BC occurs under TFLs
• Large scale operations
Forest Licence
(FL)• Right to harvest an annual volume of timber within a Timber Supply Area, under cutting permits • Volume based tenure
Licensee is responsible for: • Operational planning
• Road building and reforestation
• 15-year term; replaceable every five years • Approximately 57% of the AAC in BC occurs under FLs
• Medium to large scale operations
Timber Sale Licence • Right to harvest timber from a specified area of Crown land within a timber supply area or TFL area • Applies primarily to Small Business Forest Enterprise Program
• Volume based tenure
Ministry of Forests is responsible for: • operational planning
• road building and reforestation
Licensee is responsible for:
• logging according to licence specifications
• Generally 6 months to 5-10 years; most are not replaceable • Approximately 14% of the AAC in BC occurs under TSLs
• Small to medium scale operations
Woodlot Licence • Exclusive right to harvest an annual volume of timber from the licence area, under cutting permits • Right to carry out forest management on a specific area of Crown land. (maximum 400 ha. on the Coast, 600 ha. in the Interior)
• Area based tenure
Licensee responsible for: • strategic and operational planning
• road building and reforestation
• 15-year term; replaceable every
five years• Small scale operations
Pulpwood Agreement
(PA)• Right to harvest up to a maximum annual volume within a TSA or TFL in the event that its holder cannot meet its fibre requirements privately • Licence requires a management plan. If harvesting occurs, responsibilities are similar to a Forest Licence. • Up to 25 years; new contracts may or may not be replaceable Timber Licence • Exclusive right to harvest timber from a defined area of Crown land, under cutting permits • Area based tenure
Licensee responsible for: • operational planning
• road building and reforestation
• Variable term; licence is not replaceable. Once forest is re-established, the area reverts to Crown and becomes part of a TSA or TFL • Relatively small operations
Free Use Permit, Licence to Cut, Road Permit, Christmas Tree Permit • The various rights associated with each of these tenures are described in sections 48-51 of the Forest Act • Limited responsibilities • Short term, non-replaceable licences • Very small scale
Community Forest Agreement • Exclusive right to harvest timber from Crown land in a specific area • May grant exclusive rights to harvest, manage and charge fees for botanical forest products and other prescribed products
• Area based tenure
Licensee responsible for: • submission of a management plan for the area specified under the agreement
• audits to assess performance
• 5-year probationary agreement • 25-99 year long term agreement
• Community forest pilot project agreement will be in effect until January 1, 2004
STUMPAGE AND AAC DETERMINATION
The provincial government collects revenue, in the form of stumpage, from the harvesting of Crown timber. Stumpage rates ($/m3 of timber) are derived through a complex timber appraisal system. Those of you wishing more information about the stumpage and appraisal system in BC are referred to the following Ministry of Forests publications:
• Stumpage: An Information Paper on Timber Pricing in BC
• Coast Appraisal Manual
• Interior Appraisal Manual
Tenure agreements grant licencees the right to harvest timber within a geographic area. The rate of logging, or AAC (allowable annual cut), is determined by the Chief Forester in accordance with requirements set out in the Forest Act.
AACs are determined every five years, or more often, for two management units of land: tree farm licences and timber supply areas. Holders of tree farm licences have exclusive rights to the timber under their licence, therefore they are assigned the entire AAC for that area. The AAC for timber supply areas is apportioned between all of the licence holders (e.g. forest licences, some pulpwood agreements) who have been granted rights to the timber within that area, according to their quota.
The Chief Forester is required, under section 8 of the Forest Act, to consider the following five parameters when determining the AAC for an area:
• the rate of timber production that may be sustained on the area, including constraints on the amount of timber produced from that area that reasonably can be expected by use of that area for purposes other than timber production;
• the short and long term implications to the province of alternative rates of timber harvesting from the area;
• the nature, production capabilities and timber requirements of established and proposed timber processing facilities;
• the economic and social objectives of the Crown, as expressed by the Minister, for the area, for the general region and for the province; and,
• abnormal infestations in and devastation of, and major salvage programs planned for, timber in the area.