Ministry Role and Services

Vision, Mission and Values

Vision

Diverse and sustainable forest and range values for B.C.

Mission

To protect, manage and conserve forest and range values through a high performing organization.

People

Our people are valued for their contribution and dedication to the Forest Service, its mission and vision.

Our Values

Integrity

• We are open, honest and fair.

Accountable

• We are responsible for our own decisions and actions.

Innovative

• We encourage and support each other to create new and better ways to do our business.

Respectful

• We show respect by listening to and recognizing a diversity of values and interests.

• We work with each other in a spirit of trust, mutual respect and support.

Ministry Overview, Core Business Areas and Structure

Ministry Overview

Since its establishment in 1912 as the Forests Branch, the Ministry of Forests (also known as the Forest Service or MOF) has continued to protect the public's interest and provide leadership in the protection, management and use of the province's forest and rangelands. The Forest Service is the main agency responsible for the stewardship of 47 million hectares of provincial forestland. In addition, the ministry provides fire protection services for 84 million hectares. Managing these provincial forests presents a unique and complex set of challenges. More than 90 per cent of British Columbia's forestlands are publicly owned, which means that the provincial government, on behalf of the public, plays a much more prominent role in the forest sector than its counterparts in other forestry jurisdictions.

The ministry pursues its goals for sustainable forest resources and benefits in a consultative manner with the public, industry, and other Crown agencies, while recognizing the unique interests of aboriginal people. In this way, the ministry works to earn the public's trust as our staff make the day-to-day decisions which ensure that all British Columbians can look forward to healthy forests and a strong forest economy now and in the future.

The key legislation for which the Ministry of Forests is responsible is summarized in Appendix 1.

Core Business Area 1: Forest Protection

Focuses on protecting lives, forest resources and investments in the forest land-base from wildfire. Also included is the detection and management of insect pest outbreaks, such as the Mountain Pine Beetle, on areas under the responsibility of the province as well as outbreaks of local significance.

Core Business Area 2: Stewardship of Forest Resources

Focuses on ensuring sound environmental stewardship of forest and range resources through the regulation of forest and range practices, timber supply planning and allowable annual cut (AAC) determination, range management, control of invasive plant species, recreation management, applied research, forest gene resource management and tree improvement.

Core Business Area 3: Compliance and Enforcement

Focuses on upholding B.C.'s laws, within the Ministry of Forests' jurisdiction, that protect the province's forest and range resources. Primary activities include enforcing environmental standards and revenue policies and combating "forest crimes" (theft, arson).

Core Business Area 4: Pricing and Selling Timber

Focuses on promoting a strong forest economy and a competitive forest sector through a fair pricing system, effective allocation and administration of timber harvesting rights, and a safe and cost effective road infrastructure to access timber. Activities include timber tenure administration, timber pricing, market access activities, maintaining a forest road infrastructure and First Nation's consultation.

Core Business Area 5: BC Timber Sales

Focuses on providing British Columbians with benefits from the commercial use of public forests. BC Timber Sales markets Crown timber in an open and competitive market while optimizing net revenue to the Province. Primary functions include developing Crown timber for auction, creating and maintaining a BC Timber Sales road and bridge infrastructure, and achievement of reforestation obligations.

Core Business Area 6: Executive and Support Services

Focuses on executive and senior management leadership, corporate governance and service delivery activities in support of all ministry functions. Activities are structured within key frameworks for policy and legislation development, performance management, and internal audit and evaluation. Support service activities include finance and administration, human resources, central infrastructure management, Freedom of Information, records management, continuous improvement and the application of information technology.

Core Business Area 7: Forest Investment

Focuses on providing funding to support sustainable forest management practices, improve the public forest asset base, and promote greater returns from the utilization of public timber. Forest investments are delivered through seven programs administered by government or through third-party administrators. Forest Investment Account programs provide funding to a variety of recipients including tenure holders, forest sector associations, researchers, manufacturers, and government agencies.

Ministry Organization Structure

LINK TO LARGER VERSION

The Ministry of Forests has a decentralized structure (see Figure above), with the majority of staff in field offices in close proximity to the forests they protect and manage and the clients and communities they serve. The Operations division of the ministry consists of three forest region offices with 29 forest district offices, 4 satellite offices; and 6 fire centers, 35 zone offices, 59 fire attack bases and 18 air tanker bases. Staff in Operations division are involved in all core business areas except BC Timber Sales. BC Timber Sales includes 12 BC Timber Sales offices with 19 field team locations.

The Victoria headquarters staff are organized as follows: Corporate Policy and Governance division, Operations division (including Fire Protection), Forest Stewardship division, Tenure and Revenue division, BC Timber Sales, and Communications.

Prior to 2004/05, BC Timber Sales was part of Operations Division. BC Timber Sales was established in 2003/04 as a result of government direction to put the program on a commercial footing. In 2004/05, BC Timber Sales began reporting to a stand-alone Assistant Deputy Minister. This direction was intended to further strengthen the program's position as an independent organization within the ministry, with financial and operational independence from regional and district operations.

The Forest Stewardship Division includes staff in the Forest Practices Branch, Research Branch, Forest Analysis Branch and the Tree Improvement Branch, which manages the Tree Seed center and 6 seed orchard facilities.

In the Tenure and Revenue Division are Economics and Trade, Revenue, Resource Tenures and Engineering, and Aboriginal Affairs Branches.

The Operations division personnel in Victoria are the Compliance and Enforcement Branch and executive and support staff to Fire Protection and Field Services staff.

Corporate Policy and Governance Division provide overall co-ordination of policy development and support services to the entire ministry in the areas of financial services, human resources, information technology, and strategic policy and legislation development.

Ministry Operating Context

Internal issues

In 2004/05, the ministry continued with the challenge of implementing the policy changes associated with the Forestry Revitalization Plan and the Forest and Range Practices Act. The ministry also continued to address the softwood lumber dispute, expand dialogue with First Nations groups, deal with the impacts of the mountain pine beetle epidemic, and improve forest fire prevention and suppression practices. The context for all of these issues is expanded on in the progress on Strategies and Performance Measure Results section.

Social Trends

B.C.'s population is changing, with more people locating in urban centres. From 1996–2001 urban populations increased 5.2 per cent and rural populations declined by 0.4 per cent. As the urban-rural split expands the connection to and understanding of the natural environment is decreasing.

The increasing urban influence is causing more pressure to diversify forest management in areas of the the province. This together with the introduction of more market forces into the forest industry, which makes BC more competitive, is changing the connection between rural communities and the forest industry. Rural forest-based communities will continue to respond to these changes.

Environmental Trends

At the global level there has been significant agriculture and forest degradation, and the ecological footprint of cities is increasing. Despite these trends, there is a growing surplus of wood in some regions and a general oversupply of forests as compared to demand.

Provincially, we are experiencing higher average temperatures, more concern about water supplies, more severe fires, and more insect infestations. The pressure to manage our forests sustainably will continue, and there is a need to consider our forest practices in light of possible long-term climate changes.

The timber harvest in 2004 exceeded 80 million cubic metres - an increase of approximately 7.5 per cent from 2003, and 5 per cent above the five-year average harvest (see Figure 1 below). Although fluctuations in the annual harvest level are not unusual, the increase in the 2004 harvest level can be attributed to strong market prices for lumber, pulp and paper, and the salvage of fire and beetle killed wood.

Figure 1: Annual Timber Harvest (Crown and private lands), 1985-2004

Economics

Forest sector economics are currently dynamic with a lot of rapidly changing forces. In addition to changes in global markets and an increasingly competitive interior forest industry, the mountain pine beetle infestation and increased harvesting in the interior is having a considerable impact on sellers in BC. Access to the North American market for wood products continues to be essential for the B.C. economy. There is a need to find new ways to utilize and market beetle killed wood other than dimension lumber in Asia, U.S. and Canada, as well as alternative uses for chips and by-products.

Global Context

China, Eastern Europe and South America are playing an increasingly important role in the global forest industry as emerging suppliers and exporters with very competitive cost structures. China is rapidly expanding its wood processing capacity to meet its increasing domestic demand. Producers from Northern Europe continue to invest in the Russian wood products industry, and Russia is also emerging as one of the largest log exporters in the world.

Due to an improved Japanese economy, the value of exports to Japan increased and Japan continued to be the second largest export market for British Columbia forest products in 2004.

In 2004, world prices for lumber, pulp and paper significantly increased from 2003 prices; however the depreciation of the U.S. dollar against the Canadian dollar reduced returns for Canadian producers. European, Chilean, and New Zealand lumber exports to the U.S. continued to increase in 2004.

Consolidation

Consolidation is happening in almost every aspect of every commodity sector. Over the last several years there have been mergers and takeovers within the global forest industry, which have resulted in a consolidation of production as multinational companies continue to pursue lower unit costs. Despite recent mergers, BC companies are relatively small on a global scale and this influences their ability to attract capital and work with large retailers.

Recent changes in BC include the West Fraser-Weldwood merger in early 2005 and the announcements of the Tolko-Riverside merger and Brascan's purchase of Weyerhaeuser's coastal timberlands.

Prices

The B.C. forest industry's reliance on the export of their products into global markets makes commodity prices an important determinant of the sector's performance and health (see Table 1). On average, wood product commodity prices in 2004 were significantly above 2003 levels.

Table 1: Commodity Prices

Exports

British Columbia's forest-based industries produced an array of wood products during 2004, but continued to be dominated by the production of lumber, pulp and newsprint (see Figure 2).

Figure 2: Export by Forest Products

While forest product exports from British Columbia continue to be less than the five-year high that occurred during 2000, total B.C. forest product exports in 2004 were $15 billion, up 16.5 per cent from 2003. A large portion of the increase is attributable to increased efficiencies made by the forest industry which have reduced production costs allowing exports to the U.S. to be financially feasible despite softwood lumber duties and other costs. Softwood lumber typically accounts for over 40 per cent of total forest product exports (see Table 2).

Table 2: Total Forest Product and Softwood Lumber Export
(CAD $ billion)

	2000	2001	2002	2003	2004
Total Forest Products Exports	16.52	14.86	14.30	12.87	15.00
Softwood Lumber Exports	6.87	6.59	6.35	5.31	6.90

The primary market for B.C. products continues to be the United States, which imported 65 per cent of British Columbia's total provincial forest product exports in 2004. Japan was the second largest destination for B.C. forest products accounting for approximately 14 per cent of the total (see Figure 3).

Figure 3: B.C. Forest Product Exports by Major Market — 2004

Softwood Lumber

The current softwood lumber dispute between Canada and the U.S. commenced in April 2001. From May 22, 2002 to December 20, 2004 most Canadian softwood lumber exported to the U.S. was subject to a combined countervailing and anti-dumping duty of 27 per cent. As of December 20, 2004, the duty was reduced to 20 per cent.

Canadian federal and provincial governments and industry have been working to eliminate these duties, both through legal challenges under international trade rules, and through attempts to negotiate a long-term solution to the dispute.

On the legal front, a number of World Trade Organization (WTO) and North America Free Trade Agreement (NAFTA) rulings on Canada's challenges to the U.S. duties were released in 2004. These include a NAFTA panel decision in August 2004 that the U.S. softwood lumber industry is not threatened with material injury by Canada's softwood lumber exports. In November, the U.S. requested an Extraordinary Challenge Committee (ECC) to review allegations of bias in the NAFTA injury panel. Should Canada win the ECC, the current softwood lumber case would terminate. The results are expected in the summer of 2005.

Strategic Shifts and Significant Changes in Policy Direction

This section outlines a change in policy direction for the Stewardship core business area resulting from consultation and legislative processes, a strategic shift in policy for the Recreation Program, under the Stewardship Core Business Area and a change in organizational reporting structure affecting the B.C. Timber Sales Core Business Area.

Stewardship of Forest Resources

The defined forest area management (DFAM) initiative

The DFAM initiative was envisioned to provide a framework for collaborative forest management and a greater responsibility to more effectively perform a set of strategic forest management activities to standards set by the Province by licensees within timber supply areas (TSAs). The enabling legislation introduced in 2003 obligating licensees to undertake timber supply analysis and specified forest health activities was to be brought into force on April 1, 2005.

Since 2003, licensees have been carrying out the timber supply analysis and forest health activities on a voluntary basis using Forest Investment Account (FIA) allocations. During 2004/05, it was decided that the forest health activities would no longer be a part of DFAM, due in part to the government managing the mountain pine beetle epidemic on a provincial basis. Forest health activities will therefore remain a ministry responsibility. Timber supply analysis responsibilities will continue to move forward under DFAM, however, the enabling legislation will not be brought into force until April 1, 2007.

Bark Beetle Management

Throughout 2004/05 the ministry continued to work to prevent the spread of Mountain Pine Beetle (MPB) in the B.C. Interior and to facilitate the salvage of beetle killed wood. The widespread loss of lodgepole pine forest in B.C. due to the beetle epidemic is a long-term threat to the stability and economic well-being of Interior forest-dependent communities, and has serious implications for water tables, stream flow regulation, erosion, water quality, fisheries, forest fires and wildlife habitat. The potential for the beetle to spread outside our borders also brought about an agreement between Alberta and B.C. to provide support for beetle suppression activities in the Peace River area.

Mitigating the impacts of this epidemic goes well beyond forestry-related activities or the scope of any one ministry. This has prompted the development of a more comprehensive Mountain Pine Beetle Action Plan that provides a broader, longer term approach involving all appropriate government ministries. This five-year plan sets out seven key objectives aimed at mitigating the social, economic and environmental consequences of the MPB infestation now and in the future:

• Ensuring long-term economic stability for communities;
• Maintaining and protecting public health, safety and infrastructure;
• Recovering the greatest value from dead timber before it burns or decays, while respecting other forest values;
• Conserving the long-term forest values identified in land use plans;
• Preventing or reduce damage to forests in areas that are susceptible but not yet experiencing epidemic infestations;
• Restoring the forest resources in areas affected by the epidemic; and
• Maintaining a project management structure that ensures coordinated and effective planning and implementation of mitigation measures.

In September 2004, the total allowable annual cut, for the three north central timber supply areas most affected by beetle, was increased by 4.9 million cubic metres. This action by the chief forester was designed to facilitate salvage logging of the affected areas to realize value from the dead trees, speed-up regeneration and restore forest productivity. In December 2004, major tenure opportunities that emphasized the creation of new markets and uses for beetle killed wood were successfully advertised for competitive bid. This approach of targeting beetle killed volumes for alternative uses minimizes the disruption of existing forest product markets and is a feature of the province's beetle strategy.

Recreation Program

The 2004/05 Service Plan indicated that the ministry was focusing management of recreation sites and trails either through partnership agreements or as user-maintained. Early in 2004/05 it was acknowledged that government support (e.g., for infrastructure replacement and hazard tree abatement) was necessary to sustain existing agreements and expand new partnerships. In addition, a minimal level of maintenance was deemed to be essential at high-use recreation sites and trails that were being managed outside partnership agreements as user-maintained. Government provided funding to address this change of direction, and future recreation strategies and performance measures will now reflect this change.

BC Timber Sales

BC Timber Sales was established in 2003/04 as a result of government direction to put the program on a commercial footing. In 2004/05, BC Timber Sales began reporting to a stand-alone Assistant Deputy Minister. This direction was intended to further strengthen the program's position as an independent organization within the ministry, with financial and operational independence from regional and district operations.

Update on New Era Commitments

In 2001, the provincial government established 11 commitments for their New Era of Sustainable Forestry, which fall within the ministry's mandate. Seven of the 11 commitments have been achieved since 2001. The table reports on four commitments that were ongoing at the beginning of 2004/05, and summarizes the ministry actions to date towards achieving these commitments.