Annual Service Plan Reports 2004/05 -- Ministry of Forests

The Ministry of Forests estimates for 2004/05 were $529.582 million. During the year, the ministry received additional funding for direct fire-fighting costs due to the severity of the fire season, and for funding reforestation activities and compensation payments. Total authorized estimates for the year were $736.303 million.

At the end of 2004/05, the Ministry of Forests was under-expended by $2.4 million, or less than one per cent of the total approved expenditures. The breakdown of expenditures by the three ministry goals is shown below.

Funding for the ministry is provided in the Ministry Operations Vote of the legislature and three special accounts (BC Timber Sales, the Forest Stand Management Fund (FSMF) and the South Moresby Forest Replacement Account (SMFRA). The SMFRA expenditures are under the oversight of a joint federal — provincial management committee. Forest Investment expenditures are overseen by a Forest Investment Council.

2004/05 Expense Breakdown by Goal

Goal	Per cent of Expenditures	Funding Source (Vote or Special Account)	Core Business
Sustainable Forest Resources	48%	• Ministry Operations Vote	• Forest Protection
		• FSMF (special account)	• Stewardship
		• SMFRA (special account)	• Stewardship
Sustainable Forest Benefits	42%	• Ministry Operations Vote	• Pricing and Selling the Timber
Sustainable Forest Benefits	42%	• BC Timber Sales (special account)	• BC Timber Sales
Effective and Responsive Forest Manager	10%	• Ministry Operations Vote	• Executive and Support Services

2004/05 Resource Summary

	Estimated¹	Other Authorizations²	Total Estimated	Actual	Variance
Operating Expenses ($000)
Forest Protection	91,536	109,357	200,893	210,161	9,269
Stewardship of Forest Resources	43,197	13,297	56,494	50,885	(5,609)
Compliance and Enforcement	27,044	0,000	27,044	26,418	(626)
Pricing and Selling Timber	99,340	100,000	199,340	186,485	(12,855)
BC Timber Sales	131,800	(15,932)	115,868	115,868	0
Executive and Support Services	51,665	0	51,665	64,786	13,121
Forest Investment	85,000	0	85,000	79,230	(5,770)
Total	529,582	206,721	736,303	733,833	(2,470)
Full-time Equivalents (Direct FTEs)
Forest Protection	626	58	684	741	57
Stewardship of Forest Resources	367	—	367	417	50
Compliance and Enforcement	292	—	292	292	0
Pricing and Selling Timber	663	—	663	690	27
BC Timber Sales	529	—	529	523	(6)
Executive and Support Services	461	—	461	534	73
Forest Investment	4	—	4	4	0
Total	2,942	58	3,000	3,201	201
Ministry Capital Expenditures (Consolidated Revenue Fund) ($000)
Forest Protection	2,430	—	2,430	2,136	(294)
Stewardship of Forest Resources	2,498	—	2,498	2,195	(303)
Compliance and Enforcement	1,911	—	1,911	1,680	(231)
Pricing and Selling Timber	3,848	—	3,848	3,382	(466)
BC Timber Sales	990	—	990	(423)	(1,413)
Executive and Support Services	1,383	—	1,383	1,215	(168)
Forest Investment	0	—	0	0
Total	13,060	0,000	13,060	10,185	(2,875)
Other Financing Transactions ($000)
BC Timber Sales — Disbursements	72,491	0,000	72,491	65,072	(7,419)

Estimates as presented to the Legislative Assembly on February 17, 2004.

Other authorization during the year included:

Forest Protection: Statutory authority to overspend for Direct Fire;
Stewardship of Forest Resources: $12.5 M for reforestation for Forests for Tomorrow; and $.797 M additional expense authority for Forest Stand Management Fund;
Pricing and Selling Timber: $50 M for Transition Assistance, and $50 M for Compensation for Harvesting Rights; and
BC Timber Sales operating expenses are its capitalized expenses which are the total costs associated with: developing and selling the timber that was harvested in the year; plus post-sale activities such as harvest conformance and post-harvest activities such as silviculture, road and bridge maintenance and deactivation; and, other current period costs such as administrative overhead. The $15.932 million represents the cost savings realized on the timber volume harvested in the year.

Explanations and Comments

The ministry approved the redistribution of some resources during the year to respond to changing operational requirements. These included:

Forest Protection

The ministry received statutory approval to overspend on fire protection activities. The ministry continued to implement the recommendations contained in the Firestorm 2003 Provincial Review by Gary Filmon. In 2004/05 the ministry hired seven additional unit crews, contracted two additional airtankers and promoted fuel management in communities.

The mountain pine beetle epidemic in Central British Columbia is continuing to grow; the ministry spent an additional $1.4 million in forest health activities to address this issue.

Stewardship

Delays in the start up of the new Forests for Tomorrow reforestation program resulted in surpluses under the Stewardship core business. In addition, surpluses from the South Moresby Forest Replacement Account were a result of pending approvals from the Government of Canada linked to transfer of the fund to local control.

The only significant year over year change in the ministry's resourcing between 2003/04 and 2004/05 were expenditures related to the introduction of the Forests for Tomorrow Program. This program will have a significant impact on the ministry's ability to respond to the Mountain Pine Beetle in future years, however expenditures in 2004/05 were relatively minor as the program was introduced late in the fiscal year.

Pricing and Selling the Timber

Surpluses resulted from prolonged negotiation of First Nations forest and range agreements. Negotiations are continuing and additional agreements are expected to be signed in 2005/06.

Forest Investment

The Forest Investment Account surplus relates to a change in capitalization policy affecting the International Marketing Program, Dream Home China project, cost savings in project implementation and environmental constraints that did not allow for full utilization of project funds.

Executive and Support Services

Additional expenditures were required to address several ministry initiatives: increased legal costs, upgrade of the ministry radio systems to meet federal regulation standards, increased systems costs to address revenue issues, implementation of forest policy changes and increased costs for the ministry's portion of government's shared services costs.

Capital

The BC Timber Sales special account realized a $1.413 million surplus in capital expenditures as a result of a prior period cost adjustment. This surplus was not available for redistribution.