2002/03 Annual Service Plan Report Ministry of Forests

Appendix 3 — Forest Investment Account

Forest Investment Account Overview

The Forest Investment Account (FIA) is a forest-sector investment model, led by government, established to deliver the Province's forest investment in an accountable, efficient manner. It is founded upon a Vote of the Legislature, authorizing the Minister of Forests to provide funding to help government develop a globally recognized, sustainability managed forest industry. Investment dollars have been directed to activities on public land — enhanced forestry, watershed restoration and resource inventories — and marketing and research that supports sustainable forest management and increased allowable annual cuts. Specific amounts have been dedicated to program elements at the provincial level, other amounts have been allocated for disbursement to tree farm license holders and certain types of tenure holders in each timber supply area.

Forest Investment Account Objectives

Across the sweep of provincial and local program elements, the objectives of FIA expenditures include:

Objective 1 — Actively fostering sustainable forest management;

Objective 2 — Improving the public forest asset base; and

Objective 3 — Promoting greater returns from the utilization of public timber.

Forest Investment Account Organizational Overview

The Forest Investment Account comprises the following programs:

• Land-Base Investment Program (LBIP)
• Crown Land Use Planning Enhancement (CLUPE)
• Tree Improvement Program (TIP)
• Small Tenures Program
• Forestry Innovation Investments Programs — Research, Product Development, International Marketing

Within the context of the Legislature's voted appropriation, the Minister of Forests has decision-making authority in respect of FIA parameters. The Deputy Minister of Forests chairs a Forest Investment Council (Figure 1) that periodically reviews and makes recommendations on all FIA programs. The Council includes the Deputy Ministers of Ministry of Sustainable Resource Management (MSRM) and Ministry of Water, Land and Air Protection (MWLAP), three licensee representatives, and one representative from the forest research and technology sector.

The Council receives progress reports and audit results from the private-sector administrators (e.g. PricewaterhouseCoopers and Forintek) and is responsible for determining whether guidance or restrictions are necessary to ensure that investment choices provide the greatest contribution to sustainable forest management.

Administration of most FIA activities is provided by the private-sector firms rather than by government staff. PricewaterhouseCoopers (PwC) provides day-to-day administration for the Land Base Investment Program, and Forintek Canada Corp. does the same for the Research, Product Development, and International Marketing Programs. The Federation of BC Woodlot Associations (FBCWA) administers the Small Tenures Program.

PwC, Forintek and the FBCWA ensure that proposed activities meet eligibility criteria for FIA funding and constitute an optimum mix of expenditures to promote program objectives. They also provide funds to successful proponents, track project delivery, and are responsible for performance and financial auditing.

The Forest Innovation Investment Programs have two advisory boards, one for the International Marketing and Product Development programs, and the other for the Research program, which provide advice on strategic direction, including the goals and objectives for the respective programs.

2002/03 Progress on Meeting Program Objectives

Forest Investment Account

1	Grants and contribution agreements include: the Select Seed Ltd contract, a membership to the Sustainable Forest Management Network, and a grant to Forintek Canada Corporation for implementation in 2003/04.

Land-Base Investment Program

Significant change to how forest management is undertaken on public lands in British Columbia is occurring. The central theme and a key driver for this change is a shift to a "results-based" rather than a "prescriptive-based" approach. The FIA land-base program is one of the tools available to the forest industry for implementing this change.

The Land-Base Investment Program provides funding for the forest industry to plan and deliver investments in strategic resource planning, enhanced forestry, restoration and rehabilitation of roads and riparian areas, and resource information. Funding is also provided to ministries to establish objectives and standards, and to maintain and utilize data resulting from FIA investments.

Staff in the Ministry of Forests, with assistance and input from staff in MSRM and MWLAP, are responsible for establishing FIA objectives and delivery standards. Having established the operating criteria for FIA, government staff have no direct role in setting activity priorities, approving LBIP projects, verifying fieldwork, or certifying project completion.

Investments in the Land-Base Investment Program contribute to the FIA objectives of actively fostering sustainable forest management and improving the public forest asset base by:

• Acquiring better information about forest resources.
• Improving the modelling of forest dynamics.
• Fostering comprehensive strategic land-use planning.
• Monitoring changes to forest resources.
• Supporting the creation of sustainable forest management plans.
• Supporting the feasibility of third-party certification.
• Funding backlog reforestation of areas denuded before 1987.
• Reclaiming and enhancing site productivity.
• Restoring damaged ecosystems.

Key Accomplishments:

Information gathering and management

• A combined total of 69.2 million hectares of new resource information was acquired that ultimately will lead towards improved land use planning and decision-making. This includes an increase in the amount of provincial Crown land area where information relating to terrain stability, terrestrial ecosystems, vegetation resource inventory, archaeology, biodiversity, wildlife, and recreation has been enhanced.
• 2,154 growth and yield plots re-measured or established. This information contributes towards estimating future volume and quality of timber yields from our forests supply, update forest inventories, provide input for forest management planning, evaluate enhanced stand management opportunities, and assess the impacts of pests and fire on timber yield.

Stand Establishment and Treatment

• Over 388,000 hectares of forest stands treated for enhanced silviculture. Activities funded include improved incremental silviculture treatments (i.e. pruning, juvenile spacing, or fertilization), and reforestation of backlog areas. The investment in these treatments contribute to growing higher quality second growth stands faster on Crown lands available for timber production.
• Detection and quantification of forest health issues was completed for over 5 million hectares of Crown land. These were used for the prescription and implementation of protective or suppressive treatments to anticipate and prevent insect, disease and mammal damage to reforested areas and old growth stands.

Restoration and Rehabilitation

• Permanent road deactivation, landslide and gully rehabilitation and assessments was carried out on 4,438 km of non-status forest roads (i.e. road on Crown land that is not being used under any authorization by a government agency), thereby reducing the risk of damage to resources (including environmental, social and economic) within and adjacent to the road location from landslides and other environmental hazards.

Strategic Resource Planning

• 120 strategic forest management plans initiated towards providing the foundation for achieving sustainable forest management by setting goals, indicators and targets for a defined forest area.
• 76 forest management strategies initiated that identify objectives for values as identified in the pending Forest and Range Practices Act (e.g. timber; fish, wildlife and habitat, water, recreation, visual quality) that can be met through FIA activities

Infrastructure

• 87 forest recreation sites and 959 km of forest recreation trails maintained or established to provide user safety; provide sanitary conditions; protect the environment; provide user access and convenience; and protect investment in infrastructure.
• 1,145 km of maintenance on wilderness roads assessed to ensure protection of private and public property, and other social and economic values.

Crown Land Use Planning Enhancement

The Crown Land Use Planning Enhancement (CLUPE) Program has been established to augment the province's strategic land use planning program. Strategic land use plans are completed for areas across the province to resolve land use conflicts, identify management priorities and establish resource objectives for specified areas of Crown land. This set of objectives guides resource management and use and helps to identify economic opportunities within the plan area.

Investments in the CLUPE Program contribute to the FIA objective of actively fostering sustainable forest management by:

• Fostering comprehensive strategic land-use planning.

CLUPE funds are used towards the following objectives:

• Developing resource objectives and capacity building — to prepare resource objectives and to enable First Nations, local government staff and interested members of stakeholder groups and the general public to participate more effectively in strategic land use planning and sustainable resource management planning.
• Inventory and decision support — to provide better tools and information based on appropriate inventories that will assist planning participants to assess options based on a better picture of local needs and circumstances.
• Implementation, monitoring and evaluation — to ensure land use decisions are achieving their anticipated social, economic and environmental goals.
• Research — to provide scientifically sound information upon which to base planning decisions.

Key Accomplishments:

Developing Resource Objectives and Capacity Building

• Complete the Horsefly Sustainable Resource Management Plan (SRMP) including First Nations consultation and a short-term timber availability assessment.
• Prepare draft 100 Mile House SRMP including a short-term timber availability assessment.
• Support public consultation and data development for the Quesnel SRMP.
• Complete the Chilako Stewardship Plan.
• Prepare visual quality objectives for the Robson Valley TSA.
• First Nations consultation or participation in the Prince George, North Coast, Morice and Lillooett Land and Resource Management Plan (LRMPs).
• Develop key water management objectives in Kootenay Region.
• Completed Lillooet Timber and Economic Recovery Plan.

Inventory and Decision Support

• Development of ecosystem based management framework for the Central Coast LRMP.
• Environmental and economic assessments for the Central Coast LRMP.
• Predictive ecosystem mapping for Coast Region.
• Old Growth inventory for the Fort St. John code pilot project.
• Develop Omineca-Peace regional indicators for SRMPs.
• VRI, growth and yield projects for Prince George TSA.
• Assessment of caribou habitat and supply estimator, Mackenzie TSA.
• Analysis, fieldwork and inventory of future old growth management areas in Kootenay Region.

Implementation, Monitoring and Evaluation

• Implementation analysis for the Revelstoke and Area Land Use Planning Recommendations.
• Mature seral analysis for the Kootenay-Boundary Land Use Plan (KBLUP) Higher Level Plan.
• Spatial analysis for Kootenay Lake and Arrow Forest Districts to evaluate the KBLUP HLP.
• Implementation of the Okanagan-Shuswap LRMP direction on Mission Creek Enhanced Watershed Advisory Committee.

Research

• Complete criteria/indicator databases and spatial analysis for the Rocky Mt. Forest District.

Tree Improvement Program

The Tree Improvement Program is an operational investment plan for the management of the genetic resources of the Province. The program focuses on improving the public forest asset base by supporting the development and availability of genetically well-adapted, high quality reforestation material from natural sources and through the conservation of our forest gene resources. The Forest Genetics Council (FGC) of British Columbia, appointed by B.C.'s Provincial Chief Forester guides tree improvement activities in the province.

Investments in the Tree Improvement Program contributes to the FIA objective of improving the public forest asset base by:

• Supporting the creation and deployment of improved seedlings and other germplasm.

Based on its goals and objectives, the FGC has defined a provincial forest gene resource management program with the following components:

• Gene Conservation — activities monitor the gene pool needed for species to adapt to future environmental conditions, and provide technical recommendations on how to maintain the genetic resource for future generations.
• Tree Breeding — activities include selecting parents in wild stands, testing offspring, establishing/maintaining/measuring trials, and delivering technical support.
• Operational Tree Improvement Program (OTIP) — focuses on increasing the quality and quantity of select (Class A) seed produced from existing forest company and MoF seed orchards.
• Expansion of Orchard Seed Supply — the Ministry of Forests supports seed orchard expansions and the cooperative production of vegetative materials through SelectSeed Company Ltd., a company under the control of the Forest Genetics Council of B.C.
• Extension and Communication subprogram — meets FGC goals and objectives related to extension, communication, and education activities.
• Gene Resource Information Management — supports the development of computer-based systems that improve user access to information on select reforestation materials.
• Program Planning — supports development of business plans, species plans, and annual activity plans.

Key Accomplishments:

• Completion of gene conservation status analysis for 11 commercially important conifers in BC.
• Increased provincial use of high-quality selected seed sources from 42.5% to 44% of total provincial sowing, with an average gain of 11 per cent.
• Establishment of over 23,000 ramets in new seed orchards, bringing the provincial total to a level that will effectively meet cooperator objectives.
• All cooperator activities, including FIA support, allowed provincial seed orchards to produce a total of 2,400 kg of high-quality seed; sufficient for about 400 million seedlings.

Small Tenures Program

Funding under the Small Tenures Program is available for eligible land-base activities on Crown land under a:

• Woodlot License tenure; or
• Community Forest Pilot Agreement tenure.

Investments in the Small Tenure Program contribute to the FIA objectives of actively fostering sustainable forest management and improving the public forest asset base by:

• Acquiring better information about forest resources.
• Funding backlog reforestation of areas denuded before 1987.
• Reclaiming and enhancing site productivity.
• Restoring damaged ecosystems.

The small tenures program provides funding to eligible licensees for activities similar to the land-base investment program (i.e. enhanced forestry, environmental preservation and restoration, and resource information).

Key Accomplishments:

Information gathering and management

• A combined total of 74,000 hectares of newly acquired resource information on small tenures (i.e. woodlot licenses and community forest pilot agreements) that ultimately will lead towards improved land use planning and decision making. This includes an increase in the amount of provincial Crown land area where information relating to terrain stability, vegetation resource inventory, and archaeology has been enhanced.

Stand Establishment and Treatment

• Over 470 hectares of forest stands treated within small tenures (i.e. pruned, juvenile spaced, or fertilized). These investment in these treatments contribute to growing higher quality second growth stands faster on Crown lands available for timber production.
• Over 18,000 hectares within small tenures completed for the detection and quantification of forest health issues, and, where necessary, the prescription and implementation of protective or suppressive treatments to anticipate and prevent insect, disease and mammal damage to reforested areas and old growth stands.

Training and Extension

• Over 300 small tenure participants involved in the new Forest and Range Practices Act training.

Research Program

Investments made through the Research Program are expected to provide a positive contribution to the government's goal of having a leading edge forest industry that is globally recognized for its productivity, environmental stewardship and sustainable forest management practices.

Investments in the Research Program contributes to the FIA objective of actively fostering sustainable forest management by:

• Protecting investments in long-term ongoing studies across BC;
• Extending research results to users in many different ways (e.g. journal articles, extension notes, workshops, tours, websites);
• Funding projects in a wide range of relevant disciplines; and
• Presented BC forest science to international audiences.

Program investments are expected to lead to positive outcomes in at least four identified impact areas, including:

• More effective policies, regulations and guidelines;
• Enhanced value of the forest land asset;
• Improved stewardship and market acceptability of B.C. forest products and forest practices; and
• Increased and more effective reach of forestry research results.

Key Accomplishments:

More Effective Decision-making

• $2.0 million for 19 projects designed to support science-based decision-making, improve land use planning, and develop or evaluate decision support tools. For example, the research program funding helped the independent multi-disciplinary coast information team build the foundation for ecosystem-based management and science-based decision-making in the area. These types of investments strengthen decision-making at all levels and support the development and implementation of more effective policies, regulations and guidelines.
• $544,000 was spent to develop tools for more effective decision-making. For example, researchers in Kamloops developed a web-based expert system for site preparation and vegetation management, using research results from recent and ongoing site preparation, planting and vegetation management research projects. Expert systems use a huge amount of information in a series of databases to provide an easy-to-use decision aid. Users are asked a series of questions, and are then provided with a detailed set of recommendations, in a clearly understandable report.

Enhanced Value of the Forest Land Asset

• $4.5 million for 68 projects focused on tree improvement, silvicultural systems, stand management, reducing forest health risks (with projects on forest pathogens and pests), wood quality, and non-timber forest products. These will result in benefits such as enhancing the value of timber and the forest land asset, promoting the best use of forest resources and reducing timber production costs.
• $943 thousand was spent on enhancing the value of the forest land asset. One project, "Development of growth and yield tools for sustainable forest management" was designed to understand and quantify the biology of tree growth, the dynamics of stand development, and the effects of environmental factors and silvicultural treatments on the growth and yield of uneven-aged interior Douglas-fir stands and mixed species interior cedar-hemlock stands. Information from these studies was used to refine growth and yield models such as Tree and Stand Simulator (TASS).

Improved Stewardship and Market Acceptability

• $3.3 million for 50 projects that address issues relating to ecosystem management, landscape ecology, watershed and riparian management, and wildlife habitat. These will improve stewardship and market acceptability of B.C. forest products by supporting new or adapted forest practices that make B.C. more competitive globally, enhancing market access, improving sustainable forestry practices and accelerating the certification processes.
• $2.049 million was spent on projects that will improve stewardship. In particular, major long-term studies continue to build BC's reputation for environmental stewardship and leading edge research at an international level. For example, the Long-Term Soil Productivity study, initiated in 1991, is a full rotation-length study of the impacts of soil disturbance on site productivity. It is the world's largest co-ordinated effort to understand how soil disturbance affects long-term forest productivity, and will provide increased certainty about soil disturbance and site productivity.

Extension Services

• $2.4 million for 5 projects which resulted in the development and delivery of over 260 extension activities and products including workshops and conferences, reports, journal articles, presentations, extension notes and newsletter articles, websites, field tours and forums. These activities were funded both through a research extension services provider and within individual research projects. Ultimately, extension will enable a more effective use of forestry research results with the potential for broad application by a wide range of end-users including field practitioners, decision-makers, planners, regulators, researchers, and the public.
• $390 thousand was spent directly on extension projects, but each research project also had it's own extension component. Numerous extension products were transferred to a wide range of audiences. Eleven extension notes were written, 10 papers and 9 posters were presented at conferences, 68 different tours, talks and workshops were given, 59 journal articles are published or in draft, 2 book chapters written, and 2 new websites were developed.

Product Development Program

The Product Development Program is designed to assist proponents to improve manufacturing processes and support technology transfer, develop new types or uses of forest products, and support market access initiatives by removing technical barriers to trade.

Investments in the Product Development Program contributes to the FIA objective of promoting greater returns from the utilization of public timber by:

• Promoting secondary manufacturing.

Investments through the Product Development Program will be made through the following key program areas:

• Product development activities — for multi-licensee primary industry initiatives to develop, assess or improve manufacturing processes or products, evaluate the economic feasibility and/or performance characteristics of new forest products, and provide demonstration services to enhance the use of BC forest products;
• Market access — support initiatives designed to explore market access and/or resolve trade access issues in new and developing markets;
• Domestic development activities — for projects that will expand the domestic market and the use of BC wood products within the Canadian marketplace, or enhance the understanding of BC forest practices domestically; and
• Technology transfer — to assist BC primary and secondary manufacturers to implement technologies that improve product quality and/or lower production costs.

Key Accomplishments primarily through funding of industry associations:

• Development of wood frame building codes and standards in China, South Korea and Taiwan.
• Distributed promotional material for builders and designers in China to increase their awareness of wood-frame construction technologies and the use of B.C. forest products.
• Training of building professionals and Chinese government representatives in wood frame construction.
• Training trade instructors to develop capacity for local training in China.
• Tested wood products to show their ability to meet local market standards. For example, demonstrations on how well wood construction withstands fire, which is expected to lead to changes in fire regulations to allow institutional and commercial low-rise wood-frame construction in central urban areas of Japan.
• Supported product development initiatives to enhance existing products or develop new products designed for global markets.
• Supported technology transfer program to enable companies to improve their cost efficiency and competitiveness. For example, improved veneer drying processes which could save the plywood industry $3 million in energy costs and lead to as much as $31 million in additional production each year.

International Marketing Program

Investments made through the international marketing program are intended to promote the sustainability of British Columbia forest practices, support the retention and development of existing markets for BC forest products, and develop and pursue new forest sector market opportunities. The Government of British Columbia has committed 1% of direct stumpage revenues to the international marketing of BC forest products and forest practices.

Investments in International Marketing Program contributes to the FIA objective of promoting greater returns from the utilization of public timber by:

• Marketing British Columbia forest products and practices.

Key Accomplishments:

• Supported industry associations and their marketing strategies in existing markets (US, Japan, Europe) and emerging markets (China, Korea, Taiwan and India).
• Funded market research to determine needs and identify barriers to trade in different markets (both existing and emerging).
• Supported trade missions to both existing and emerging markets, including the coordination of the Minister of Forests' international trade mission to China.
• Developed website http://www.bcforestproducts.com to promote BC wood products.
• Produced DVDs and business directories promoting BC wood products and practices.
• Established Market Outreach Network and developed multi-lingual fact sheets, presentations and set up the website http://www.bcforestinformation.com.
• Prepared groundwork for announcement of the Dream Home China project, which will showcase the use of BC wood construction products and methods.