Appendix 2: 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 provincial government's forest investment in an accountable, efficient manner and to assist government to develop a globally recognized, sustainably 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 Goals

Goal 1: Actively foster sustainable forest management

Goal 2: Improve the public forest asset base

Goal 3: Promote greater returns from the utilization of public timber

Forest Investment Account Organizational Overview

The Forest Investment Account comprises the following programs:

• Land-based Investment Program (LBIP)
• Small Tenures Program
• Crown Land Use Planning Enhancement (CLUPE) Program
• Tree Improvement Program
• Forest Science Program
• Product Development, and International Marketing Programs

The Minister of Forests has decision-making authority for FIA and the Deputy Minister of Forests (MOF) chairs a Forest Investment Council that periodically reviews and makes recommendations on all FIA programs. The Council includes the Deputy Ministers of the Ministry of Sustainable Resource Management (MSRM) and the 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 from program administrators and is responsible for determining whether guidance or restrictions are necessary to ensure that investment choices provide the greatest contribution to the achievement of FIA goals. FIA programs are administered by government or by third parties acting on behalf of government (see Figure 1).

Figure 1: Forest Investment Account Overview

Administration of most FIA activities is provided by private-sector firms rather than by government staff. PricewaterhouseCoopers (PwC) provides day-to-day administration for the LBIP and the Forest Science Program, and Forest Innovation Investment Ltd. (FII) does the same for the Product Development, and International Marketing Programs. The Federation of B.C. Woodlot Associations (FBCWA) administers the Small Tenures Program.

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

FII was incorporated on March 31, 2003 under the Company Act of British Columbia. The Province of British Columbia, as represented by the Minister of Forests, is the sole shareholder of the company. The company is managed through a Board of Directors made up of the Deputy Ministers of Forests, Finance, and Small Business and Economic Development, as well as the FII President and Chief Executive Officer. The programs administered by FII operate within the goals and objectives developed as part of the FII Service Plan. The Annual Service Plan Report prepared by FII summarizes key accomplishments and progress towards meeting performance targets for these programs and is available at http://www.gov.bc.ca/cas/popt or http://www.bcfii.ca/.

Highlights and key accomplishments are reported in this Appendix for the LBIP, the Small Tenures Program, CLUPE, the Tree Improvement Program and the Forest Science Program.

Forest Investment Account Budgets and Actuals

Forest Investment Account
	Budget	Actual	Variance
2004-05 Program Investments ($000)
Land-base Investment Program	48,457	47,082	1,375
Small Tenures Program	875	799	76
Crown Land Use Planning Enhancement Program	2,545	2,531	14
Tree Improvement Program	4,291	4,273	18
Forest Science Program	10,082	9,750	332
International Marketing and Product Development	18,750	15,089	*3,661
Total Program Expenditures	85,000	79,524	5,476
2003-04 Full-time Equivalents (FTEs)
Total	4	4	0

2004/05 Program Highlights and Key Accomplishments

Land-based Investment Program

The Land-based Investment Program (LBIP) provides funding to forest companies to plan and deliver non-obligatory land-based investments that foster sustainable forest management and improve the public forest asset base in British Columbia. The Ministries of Forests, Sustainable Resource Management, and Water, Land and Air Protection establish resource objectives, maintain a roster of eligible activities and provincial standards, and manage deliverables generated through LBIP projects.

Investments in the LBIP contribute to the FIA goal of actively fostering sustainable forest management and improving the public forest asset base through the following strategies:

• acquiring and providing access to science based information about forest resources;
• improving the modelling of forest dynamics;
• monitoring changes to forest resources;
• supporting the creation of sustainable forest management plans;
• increasing timber volume and value; and
• restoring and enhancing site productivity, recreation infrastructure, and damaged ecosystems.

For 2004/05, a portion of LBIP funding was targeted for activities administered by the Ministry of Forests. These activities included bark beetle control in protected areas and parks, invasive plant treatments and invasive plant biocontrol development, gypsy moth spraying, wildfire reforestation, and fire hazard abatement.

Land-based Investment Program
	Budget	Actual	Variance
2004-05 Program Investments ($000)
LBIP Component Areas
Information Gathering and Management	N/A	13,435	N/A
Stand Establishment and Treatment	N/A	9,474	N/A
Restoration and Rehabilitation	N/A	2,641	N/A
Strategic Resource Planning	N/A	2,503	N/A
Infrastructure	N/A	519	N/A
Gene Resource Management	N/A	149	N/A
Training and Extension	N/A	124	N/A
LBIP Component Areas Total	29,517	28,845	672
PwC Administration and Audit	2,504	2,154	350
Standards, Data Management & Technical Support	8,952	8,493	459
Bark Beetle	1,729	2,140	(411)
Invasive Plants	1,164	1,149	15
Gypsy Moth	371	358	13
Wildfire Reforestation	1,360	1,031	329
Fire Hazard Abatement	2,000	2,000	0
Recreation	860	912	(52)
Total Program Expenditures	48,457	47,082	1,375

Key Accomplishments

Acquiring and providing access to science based information about forest resources

• Acquired updated and new resource information for a combined total of 73.4 million hectares 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 ecosystem mapping, vegetation resource inventory, predictive ecosystem mapping, archaeology, biodiversity, wildlife, and recreation has been enhanced.
• Completed timber supply review data package and six timber supply analysis reports in support of determining allowable annual cuts for Timber Supply Areas.
• Prepared data package and completed timber supply analysis and socio-economic assessment for Lillooet TSA.
• Prepared strategy for inventory activities in areas affected by the mountain pine beetle and completed draft report on Forest Inventory and Monitoring Strategy for the Mountain Pine Beetle Areas.

Improving the modeling of forest dynamics

• Re-measured or established 276 growth and yield plots. This information contributes towards estimating future volume and quality of timber yields from our forests, updates forest inventories, provides input for forest management planning, evaluates enhanced stand management opportunities, and assesses the impacts of pests and fire on timber yield.

Monitoring changes to forest resources

• Monitored 82 sites for long-term studies relating to aquatic and terrestrial values, including water quality, deer, northern goshawks, marbled murrelets and other indicators.

Supporting the creation of sustainable forest management plans

• Continued progress on 23 landscape unit plans. Approximately 40 projects related to the development of key indicators and public advisory groups / consultation, including the update or creation of sustainable forest management plans based on this information. This work contributed towards providing the foundation for achieving sustainable forest management by setting goals, indicators and targets for defined forest areas.

Increasing timber volume and value

• Carried out 4,757 hectares of treatments and surveyed 12,235 hectares. Activities funded include improved incremental silviculture treatments and reforestation of backlog areas (areas denuded prior to October 1, 1987). The investment in these treatments contributes to making stands available for harvest sooner, increasing merchantable volume production and growing higher quality second growth stands.
• Completed 5.4 million hectares of aerial surveys, 29,000 hectares of ground surveys and 17,000 single tree treatments for bark beetle management in suppression beetle management units.
• For areas impacted by Dothistroma needle blight, completed 15,892 hectares of aerial surveys and 4,686 hectares of ground surveys, for the purpose of strategic implementation of stand tending treatments. Reforested 985 hectares in the Kispiox/Kalum/Cranberry Timber Supply Areas and purchased seedlings to reforest approximately 270 hectares in 2005/06.

Restoring, and enhancing site productivity, recreation infrastructure, and damaged ecosystems

• 125 forest recreation sites and 191 kilometres of forest recreation trails were maintained or established to provide user safety, provide sanitary conditions, protect the environment, provide user access and convenience, and protect investment in infrastructure.
• Permanent road deactivation, landslide and gully rehabilitation and assessments were carried out on 2,928 km of non-status forest roads, thereby reducing the risk of environmental, social and economic damage to resources within and adjacent to the road location from landslides and other environmental hazards.
• 20 sites were assessed, prescribed and works completed on instream structures. Additionally, 14 sites were reviewed for fish passage concerns and structures removed/replaced as necessary to re-establish upstream habitat access for salmon and other local fish species.

Small Tenures Program

Funding under the Small Tenures Program is available for eligible non-obligatory land-base activities on Crown land under woodlot licence tenure and community forest pilot agreement tenure. The Small Tenures Program provides funding to eligible licensees for activities similar to the LBIP (i.e., enhanced forestry, environmental preservation and restoration, and resource information).

Investments in the Small Tenure Program contribute to the FIA goal of actively fostering sustainable forest management and improving the public forest asset base through the following strategies:

acquiring and providing access to science based information about forest resources;

ensuring that forests have sustained value production; and

restoring and enhancing site productivity, recreation features and damaged ecosystems.

Small Tenures Program
	Budget	Actual	Variance
2004-05 Program Investments ($000)
Information Gathering and Management	N/A	251	N/A
Stand Establishment and Treatment	N/A	312	N/A
Training and Extension	N/A	72	N/A
Infrastructure	N/A	74	N/A
Restoration and Rehabilitation	N/A	35	N/A
Sub-Total	818	744	74
Program Administration and audits (FBCWA)	57	55	2
Total Program Expenditures	875	799	76

Key Accomplishments

Acquiring and providing access to science based information about forest resources

• A combined total of 40,259 hectares of newly acquired resource information on small tenures that includes increase in amount of provincial Crown land area where information relating to terrestrial ecosystem, vegetation resource inventory and archaeology has been enhanced.
• 16 woodlot workshops for approximately 350 participants focused on the Woodlot License Plan Template and due diligence under the Forest and Range Practices Act and an overview of the ministry's Electronic Forest Management Initiative.

Increasing timber volume and value

• Over 149 hectares of forest stands treated (i.e. pruned, juvenile spaced, or fertilized). These investments contribute to growing higher quality second growth stands on Crown lands.
• 21,164 trees purchased for planting in the spring/summer of 2005 on Crown areas harvested prior to October 1, 1987.

Restoring and enhancing site productivity, recreation infrastructure, and damaged ecosystems.

• Repair and maintenance of 35 forest recreation sites to provide user safety; provide sanitary conditions; protect the environment; provide user access and convenience; and protect investment in Crown infrastructure.

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. Investments in CLUPE contribute to the FIA goal of actively fostering sustainable forest management by supporting the creation of strategic land use plans.

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. These resource objectives guide land use and resource management and help to identify economic opportunities within the plan area. CLUPE funds are used for:

• Capacity building: Build land/resource planning capacity in the communities where planning is happening, and develop local-level support for planning outcomes.
• Resource objectives: Specify government's objectives for Crown forest land and resources.
• Resource analysis: Ensure that forest land use planning decisions are based on sound analysis and information.
• Implementation, monitoring and evaluation: Ensure that strategic land use plans achieve their intended social, economic and environmental objectives.

Crown Land-Use Planning Enhancement Program
	Budget	Actual	Variance
2004-05 Program Investments ($000)
Developing Resource Objectives	1,841	1,822	19
Implementation, monitoring and evaluation	704	708	(5)
Total Program Expenditures	2,545	2,531	14

Key Accomplishments

Resource Objectives

• Draft Old Growth Management Areas established for the Merritt, Kamloops, and Okanagan Timber Supply Areas and Old Growth Management Area and biodiversity objectives developed and legally established for Prince George Timber Supply Areas.
• Sea-to-Sky Land Resource Management Plan recommendations provided to government by the Planning Forum. Approval-in-principle and mandate for government-to-government consultations with First Nations given by Cabinet.
• Nine Sustainable Resource Management Plans initiated and 14 Sustainable Resource Management Plans completed.
• Legal objectives initiated for ungulate winter ranges in accordance with the Cariboo Chilcotin Land User Plan.

Implementation, monitoring and evaluation

• Monitoring committee established in Prince George to determine the effectiveness of legally established biodiversity objectives.
• Land use plan "matrix" developed in Southern Interior Forest Region to assist the Forest Service in implementation of forest stewardship plans.
• Review of existing land use plans initiated in Southern Interior Forest Region to determine how best to address gaps for full implementation of the Forest and Range Practices Act.

Tree Improvement Program

The Tree Improvement Program is an operational investment plan for management of the genetic resources of the Province to meet the FIA goal to improve the public forest asset base and the Ministry of Forests goal of Sustainable Forest Resources. 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 the B.C. Chief Forester, guides tree improvement activities in the province.

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: focuses on increasing the quality and quantity of select seed produced from existing forest company and Ministry of Forests 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 Forest Genetics Council 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;
• Seed Pest Management: supports research to ensure protection of conifer seed orchards and to develop better method of management for cone and seed pests;
• Program Planning: supports development of business plans, species plans, and annual activity plans.

Tree Improvement Program
	Budget	Actual	Variance
2004-05 Program Investments ($000)
Gene Conservation	220,000	220,000	0
Tree Breeding	2,124,000	2,171,000	(47,000)
Operational Tree Improvement	697,000	666,000	31,000
Expansion of Orchard Seed Supply	871,000	871,000	0
Extension and Communication	126,000	121,000	5,000
Gene Resource Information Management	70,000	49,000	21,000
Seed Pest Management	150,000	142,000	8,000
Program Planning	33,000	33,000	0
Total Program Expenditures	4,291,000	4,273,000	18,000

Key Accomplishments:

• Completed detailed maps for and defined gene conservation status of all 49 Tree Species.
• Completed establishment of the 14 new seed orchards required to meet the provincial target of 75 per cent of all reforestation seed needs.
• Increased provincial use of high-quality selected seed sources to 50 per cent of total provincial sowing, with an average volume gain of 11 per cent.
• Developed and implemented new Chief Forester Standards for Seed Use to support the use and monitoring of genetic resources on Crown land.
• Produced a total of 504 kg of high-quality seed from provincial seed orchards sufficient for approximately 37 million seedlings as a result of all co-operator activities, including FIA support.

Forest Science Program

The Forest Science Program vision is to be a world leader in providing credible and relevant scientific knowledge to support sustainable forest management policies and practices. The program supports the FIA goals of improving the public forest asset base and promoting greater returns from the utilization of public timber. This is accomplished by focusing on applied research in the areas of sustainable forest management, improving timber growth and value, and achieving more effective use of forest science results through extension.

The Forest Science Program strategic goals are as follows:

• Improve knowledge-based science in support of sustainability.
• Improve knowledge-based science in support of improving timber growth and value.
• Guide development of a provincial forest extension program.
• Develop efficient and effective process for determining annual research and extension priorities.
• Encourage sufficient stable funding to meet the needs of the Forest Science Program.

Forest Science Program
	Budget	Actual	Variance
2004-05 Program Investments ($000)
Sustainability Research	4,259	4,167	92
Timber Growth and Value Research	3,306	3,202	104
Extension	1,275	1,325	(50)
Forest Science Board	200	198	2
Research Partnerships	225	225	0
Program Administration and Audits	817	633	184
Total Program Expenditures	10,082	9,750	332

Key Accomplishments

Improve knowledge-based science in support of sustainability

• Fifty-eight projects were funded to improve knowledge-based science in support of sustainability in 2004/05. Funded projects will help achieve sustainable ecosystems and biodiversity by contributing to the creation of sustainability indicators for resource objectives, assist in the creation of targets for various biodiversity features, and addressing disturbance ecology and ecosystem structure, function and processes.
• Projects also investigate using ecosystem knowledge to manage forests. This improves our ability to maintain desired ecosystem characteristics and understand ecosystem responses to forest practices. Work was also done to study the effects of climate change on forest ecosystems, and species.
• Providing scientific support to respond to new policy initiatives was also an area of work in 2004/05. Funded projects provided information in support of the federal Species at Risk Act and related provincial legislation. Projects such as habitat use by Marbled Murrelets on southwest Vancouver Island and implications for forest management provided critical information for the development of provincial wildlife standards.
• Another area of work in support of sustainability was in developing knowledge and decision tools for integrated resource management. Funded projects examined silvicultural systems to improve production of forest resources, studied the effects of forest practices on watershed processes, developed analytical and decision-making models for resource management, examined wildlife habitat needs and investigated factors affecting terrain stability and its response to management.

Improve knowledge-based science in support of improving timber growth and value

• Fifty-one projects were funded in 2004/05 to improve knowledge-based science in support of improving timber growth and value. Projects in the area of improving timber growth provided information to improve management of complex forests, addressed risks from forest health problems and wildfires, and provided further work on analytical tools to assess productivity of planted and natural forests.
• Improving estimates of timber yields and timber supply implications of forest management practices was also a key area of research. Projects funded in 2004/05 contributed to timber supply models and Annual Allowable Cut determination processes, greater understanding of the effects of management practices on forest dynamics, and continued development of growth and yield models and predictions.

Guide development of a provincial forest extension program

• FORREX, the provincial forestry extension provider, focused extension in five areas based on priority management issues: ecosystems and biodiversity conservation; forest dynamics and integrated resource management; socio-economic; information and knowledge systems, and watershed management. Extension activities and products included workshops, conferences, publications, presentations, websites, field tours and forums.

Develop efficient and effective process for determining annual research and extension priorities

• Program Advisory Committees were established, drawing from government, industry, consultants and other institutes and organizations inside and outside of government and priority documents were developed for sustainability and timber growth and value Program Advisory Committees that were used in the 2005/06 call for proposals.

Encourage sufficient stable funding to meet the needs of the Forest Science Program

• The Forest Science Board initiated a process for funding long-term research to ensure more stable funding at the project level and a process for funding infrastructure costs associated with long-term installations to protect the infrastructure integrity of key installations in B.C.
• The Forest Science Board also produced the Forest Science Program Strategic Plan 2004 — 2008 and communications materials to increase awareness for the program.
• The Forest Science Program provided funding to the Canadian Forest Innovation Council and the Sustainable Forest Management network to link with research partners both at the provincial and national level.