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Log Export Policy

Log Export Policy in BC: The TLA's Perspective

Log exports: few topics are as controversial in British Columbia's forest industry. The TLA has long advocated that log exports are an important employment and economic driver for coastal communities, particularly in tough economic times. Those that suggest log exports equate to "job exports" don’t realize the reverse is actually true: log exports support local jobs. In this regard, the Fraser Institute report on log export policy released June 24, 2014 is worthy of review.

Notable is the finding by study author and Fraser Institute senior fellow Joel Wood that; “an outright ban on log exports from B.C., as advocated by many union leaders, environmentalists and politicians, would likely cause economic damage, particularly to B.C.’s coastal regions where the majority of B.C. log exports originate.”

We know this to be true because harvest levels on the coast have been significantly below the Annual Allowable Cut (AAC) in all but two of the past 25 years. The undercut is due in large part to the preponderance of expensive-to-harvest, lower grade timber on the coast. Without a modest level of log exports where higher prices can be secured, this low grade timber is uneconomic to harvest. In essence, export log prices subsidize logs locally sold and without them, logging activity (and its associated economic activity) would be significantly reduced.

Setting aside the undercut, the actual AAC has dropped 25 per cent since 1990—due to a loss of 37 per cent of the timber harvest land base to the creation of parks, protected areas and old growth management areas. This is another reason BC's policies must encourage the full use of the working forest we still have. The current export policy has helped the forest harvesting industry survive on the coast during the recent economic downturn. With one job in the forest for every job in a mill, it is important to maximize harvest levels in order to maximize the economic opportunity for all of BC.

According to the Fraser Institute study; "the current log export process prevents log owners from securing long-term contracts with foreign buyers to shelter from price volatility, prevents log owners from sorting logs per customer request, and imposes time delays that increase log handling costs and ties up capital.” The most effective policy, argues Wood, would involve streamlining the approval process in the short term and then using the potential removal of log export restrictions as leverage in future trade negotiations.

The TLA will study the Fraser Institute report and comment further. In general, however, the TLA's position is that any policy governing log exports should be supportive of coastal communities, seek to maximize the economic activity in both the mills and the forest, preserve forestry infrastructure and optimize future timber supplies.