2016 Legislative Session: Fifth Session, 40th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Tuesday, April 12, 2016

Afternoon Sitting

Volume 37, Number

ISSN 0709-1281 (Print)

ISSN 1499-2175 (Online)

CONTENTS

Page

Orders of the Day

Committee of the Whole House

Bill 12 — Forests, Lands and Natural Resource Operations Statutes Amendment Act, 2016 (continued)

H. Bains

Hon. S. Thomson

B. Routley

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Education (continued)

Hon. M. Bernier

R. Fleming

J. Wickens

S. Hammell

[ Page 12089 ]

TUESDAY, APRIL 12, 2016

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Orders of the Day

Hon. M. Polak: In this chamber, I call continued committee stage debate on Bill 12 and, in Committee A, the continued debate of the estimates of the Ministry of Education.

Committee of the Whole House

BILL 12 — FORESTS, LANDS AND

NATURAL RESOURCE OPERATIONS

STATUTES AMENDMENT ACT, 2016

The House in Committee of the Whole (Section

B) on Bill 12; R. Chouhan in the chair.

The committee met at 1:34 p.m.

section 1 (continued) .

[1335]

H. Bains: I think where we left, the minister was to provide an answer to the question that I asked. I think it’s the minister.

The Chair: Minister.

Hon. S. Thomson: Thank you, Chair. Welcome to the chair.

I hope I can provide the answer and clarify this in a way, I think, where the member opposite was going. I want to restate the question, just so I make sure I’ve understood the question. I think what the member opposite asked specifically was: could the minister issue a new non–B.C. Timber Sales licence — which would be, for example, licence A — and use the proposed reduction legislation to take volume from another non–B.C. Timber Sales licence? I think that was the essence of the question.

The answer to that is no. This legislation doesn’t provide for that. The proposed legislation cannot be used to take volume and reduce the harvesting rights of one non–B.C. Timber Sales licence — in this case, in the example, licence B — to support the issuance of a new or expanded non–B.C. Timber Sales licence, licence A.

The volume to support new or expanded licences will come from unallocated AAC in some management units where it exists and in other management units from B.C. Timber Sales. The reduction in this bill refers to the volume transferred from the new or expanded licence to B.C. Timber Sales. No other licences are involved.

H. Bains: That is a different answer than we were going through before the break, but it’s much more clear. I appreciate that.

I think the question still remains. Where is this unallocated timber, and how is it coming to BCTS? Then, if that’s the case, what is the purpose of having this clause in there? It says amend the definition of AAC to allow a reduction under

section 35(1), a reduction under

section 43.3, a reduction under

section 43.55. Further down, which we will talk about later, is a reduction under

section 14(1).

There are provisions for a reduction. If you’re not able to take from the one licensee to support the other licensee…. I think that’s what the minister….

The minister was using that example. The example of the Haida was used. They needed 80,000. We had only, say, 65,000, and that additional 15,000 is needed. Under those circumstances, you could take away from non-BCTS and allocate to the Haida, as I understood the answer. Or BCTS can, from its own, add to that. I think that’s the way, as I understood, it was being explained. Then, having the ability to have a reduction of the Haida, the portion that is given to them…. So they could still be seen to be part of BCTS for the purpose of the 20 percent and having the market pricing.

When would the reduction take place, then, if you cannot take from one licensee to add to another or to create another? When will you actually be in a position to utilize this section, where you want to reduce someone’s AAC?

[1340]

Hon. S. Thomson: Hopefully, with the previous explanation, which the member opposite said was clearer — and I apologize for the potential lack of clarity here….

Volume is provided to the licensee under a newly issued licence, whatever that volume may be. That could come from a combination of unallocated AAC in an area.

When we do apportionment decisions, we set aside AAC for that purpose for First Nations woodland licences or for a community forest or for woodlots. It’s all part of the apportionment decision. We have an apportionment for B.C. Timber Sales as part of that decision.

[ Page 12090 ]

I’ll just use an example. You could go to…. A community forest is looking for an opportunity, and you come to them and say, “We’ve got 20,000 cubic metres of unallocated volume here — AAC — that we could use for that community forest opportunity,” or: “We’ve got a community forest, First Nations.”

You could say: “You could have that, or you could have a 30,000- or 35,000-cubic-metre community forest licence.”

As well, you can have the separate business-to-business arrangements between the community forest and BCTS, for example, around contract opportunities. Those could all be part of the conditions.

What we’ve heard from community forests and First Nations is that, given a choice between an X-volume licence or an X-volume licence with more volume in it but some of it reserved through an agreement back to B.C. Timber Sales, in those circumstances where it makes sense and the opportunity is there, we think that the community forests will….

We’ve had the discussions with the Community Forest Association. We’ve had the discussions with the First Nations Forestry Council and others on this process. We think they would take that second opportunity, because they get a larger volume. They get benefit from some of that volume being reserved and reduced, back to B.C. Timber Sales for an agreement. They would get the benefit out of it. It goes into the licence holder.

[1345]

We think, under those circumstances, it’s going to give us an extra tool that’s going help us build on those objectives and meet the two objectives, the mutual objectives here, of expanding First Nations opportunities and community opportunities, and maintaining the integrity of the B.C. Timber Sales market pricing system at the same time, using the same square metre of AAC — trying to achieve both objectives.

H. Bains: Okay, so I think what this means is that…. Let’s use this as an example. BCTS, for example, has — just for the sake of easy numbers — 100,000 cubic metres of timber, and licensee X has 10,000. BCTS or the minister or the forest manager decides that 5,000 from BCTS should go to this licensee X to make it 15,000 for them, for that licensee.

That’s one thing that I understand, because there’s a definition, BCTS, being changed as well. I think that’s probably what that is, but we’ll get into to that as well.

On paper, yes, licensee X is getting 5,000 extra. But BCTS or the ministry will be saying that that licensee X’s AAC is being reduced to 10,000 or whatever they had before. The 5,000 comes back to BCTS for them to manage, but the benefit goes back to licensee X. Is that basically how this will work?

Hon. S. Thomson: I think the example the member opposite uses is essentially correct. Maybe I’ll just take it back down to the basics again. In order to meet the objectives…. I’ll just use a theoretical example again. You said you’ve got 100,000 apportioned to BCTS as their apportionment out of an AAC set for an area. You’ve got some unallocated volume that you can provide to a community forest or to a First Nation licence, whatever that may be. Let’s say it is 10,000 cubic metres.

We recognize that 10,000 cubic metres, in the shorter term, is not going to create a fully viable unit for that opportunity, so we would look to take BCTS volume and add it to that and give them an expanded opportunity. But in order to maintain the integrity of the system, we would have an agreement that says that if you took ten from BCTS and made the community forest 20, you would reduce that volume for a period of time. It could be for the term of the licence. It could be for a set period of time. Then the community forest would have that volume, depending on the management objectives and things like that.

[1350]

It provides that opportunity, and it would be for a benefit. The community forest, the First Nation, gets the benefit of a new opportunity. It gets the benefit of the financial benefit. There would be a benefit paid to the entity for providing that back to BCTS. BCTS gets to auction it and maintain the pricing point.

We see it as a tool, as I said, used on limited opportunities and in limited areas where it makes sense. But we think it’s an important additional tool to have.

We had the debate all the way through Bill 25 on this, around the disposition agreements. The purpose of what we’ve done here is taking the next step that would allow us to actually make that a term and a condition of a licence, on a new licence going forward.

I point out clearly that it doesn’t apply to existing licences unless there was consent or agreement. There may be situations where there is an existing licensee — for

[ Page 12091 ]

existing community forests, for example — that would look to provide some of that back for purposes, for a benefit. If it fit within their management plan and their purposes, they could do that on a voluntary basis.

The only use of the provisions that are in this legislation would be on a go-forward basis on newly issued licences.

H. Bains: In plain words, the intent here is, then, to benefit new licensees at the expense of BCTS. Because when you only look at the benefits, BCTS, in the example that I…. BCTS is losing 5,000, and the licensee is gaining 5,000. But because that volume is coming back to B.C., on paper, to show that BCTS has maintained the integrity of the system at 100 percent…. Actually, they don’t have 100 percent. They have only 95 percent of the allocation.

I think that’s basically what it is: at the expense of BCTS. Because the 5 percent…. Although it still shows on their books, for numbers purposes, that they still maintain 20 percent to satisfy the 20 percent of timber pricing, there’s a licensee who is benefiting from that 5,000. All the benefits of the 5,000, although BCTS shows and manages it, goes back to the licensee. That’s what the purpose is.

Hon. S. Thomson: Yeah. As I said earlier, this is about balancing objectives. The alternative would be a decision that says: “No. In order to maintain the integrity of the system, we can’t provide that opportunity.”

It comes down to a choice. This is about balancing it. The community licensee or the First Nation benefits because they get the opportunity for an expanded…. They get benefits from the agreement to provide the volume back to BCTS to be auctioned. BCTS pays a benefit for that. There are the ancillary benefits that would come in that arrangement around contracting opportunities, management opportunities that could be provided as part of that.

This is not about winners or losers. This is about not creating a loser because you can’t find the way to land a community forest opportunity, a First Nations woodland licence opportunity, a woodlot or anything like that because you’ve got such scarce volume.

[1355]

I see it as win on one side, less…. Maybe you could portray it as not a full win for B.C. Timber Sales, but an opportunity for us to help build community opportunities and First Nations woodland licences without a big significant negative impact on B.C. Timber Sales because they lose the amount of volume that needs to maintain that system. It’s a way to meet both objectives.

H. Bains: I get it now. It is — as the minister finally has put it — that at the expense of BCTS, a licensee will benefit. BCTS will maintain the integrity of the timber pricing system. I get that. Now we know what the purpose behind this is.

My next question is: what portion of BCTS can be reallocated into new licences, as we just finished talking about? I understand that, roughly, BCTS has about 13 million cubic metres today, or thereabouts. How much of that can be apportioned to go into new licences? Can all of it be gone? Can some of it? What percentage?

Hon. S. Thomson: Again, as I pointed out earlier, we see this being used in limited circumstances where our first effort to provide these opportunities is to do it with existing apportionment room in our apportionment decisions.

Based on the current commitments, discussions, underway…. This is to support opportunities that have been developing and been worked on with community forests and First Nations woodland licences. I’m advised that the current volume being considered in the number of opportunities we have represents about 130,000 cubic metres per year, less than 1 percent of the B.C. Timber Sales’ annual apportionment — again, a very limited amount with the opportunities that are there.

If it all works successfully, I can see more interest and opportunities coming forward as we try to build the opportunities for those communities and First Nations and woodlots. But again, a very limited amount now.

I still see it going forward as being used judiciously and sparingly as far as volumes are concerned. Obviously, if we gave it all away, it would have a significant impact. It has a significant impact on provincial revenue. There would be a concern around whether you really have got the integrity still in the market pricing system.

It’s a way to do it on a limited basis and provide those opportunities. We see it as being a very small percentage of the existing apportionment to B.C. Timber Sales on a provincial basis.

H. Bains: It’s nice for the minister to say that currently only 100,000 is being considered and it will be utilized on a limited basis. I appreciate that. But where in this bill restricts you to 100,000 or 200,000 a year or five million a year? I would like to draw my attention. I can’t find it, unless I missed it here.

Are there any limitations in this bill that would put limits on the minister’s ability to apportion only certain parts of BCTS or limited amounts of BCTS’ AAC?

[1400]

Hon. S. Thomson: I’m sure the member opposite has looked hard through the legislation to find the limitation. There is no limitation on the amount that could be utilized. The reality is…. Our preference is to have full licences issued to community forests without the com-

[ Page 12092 ]

plication of that, the decision back, to keep BCTS whole to the degree possible, in terms of their volume.

It would be used on a very limited basis, and only be used where it makes sense and where there is a real need in the community to look for an additional opportunity — where there is a need around supporting opportunities of First Nations through the First Nations woodland licences.

I’m not concerned that this opens up a floodgate of opportunities or a floodgate of arrangements that would see BCTS really negatively impacted. We will use the ability here sparingly and where it makes sense.

H. Bains: But the fact remains. We go, and we are guided, by the act. The act is before us. There is no limitation. I think that’s the concern.

Perhaps the minister now can advise the House: before these changes, under the current act, can BCTS’s AAC or the apportioned part be reallocated to create new licences from the existing BCTS volume?

Hon. S. Thomson: Under the current Forest Act, we can set apportionment. I can take BCTS volume and apportion it elsewhere when you are making the apportionment decisions around that. Theoretically, you can do that. It then significantly puts it at risk — the market pricing system, the integrity — if I do that. What we’ve got here, under those limited circumstances, is the ability to take limited amounts of those and still meet both objectives.

Again, go back to the original. The intent of this is to provide that opportunity on a limited basis, without simply using the tool that says, “We’re just going to take it away,” in order to meet those other objectives. We want to do it in a way that helps provide those opportunities.

As we’ve said, it’s only on the issuing of new licences. It doesn’t impact existing licences unless there is consent. That could happen, where there may be an agreement that they would like to do that — so a limited basis.

Again, it’s around that situation where I end up with a choice of saying, “We can give you a 20,000 cubic metre community forest,” or, “We can give you a 30,000 or 40,000 metre community forest,” or, “We can give you an 80,000 metre community forest” — as we’re working through on Haida Gwaii — “but we’ll have to have it on this basis and with this provision back.”

[1405]

I think, on balance, it provides the opportunity. We’ve worked through the consultation process with the associations on this. They support this opportunity because they see the potential to have an added financial benefit into the entities — into either the community forests or the First Nations woodland licences or a new woodlot. We’re responding to those situations where we see that opportunity.

B. Routley: I thank the minister for some of the clarification that we’re getting on exactly what this does mean. I do support, in some instances…. There’s a need to be able to deal when you’ve got a limited timber supply. So much of our forest is overcommitted that I get it that you’re looking for community forest opportunities or for First Nations or for woodlot.

My thinking went to: is there an opportunity to…? This may be something you may or may not have thought of before. I get it that one of the things that government has to be concerned about is the softwood lumber deal, right? The whole goal of providing timber available to the free market is to have that provided through B.C. Timber Sales. I’m also aware that other forest companies throughout British Columbia do have some portion from time to time that may be available, because their own needs are already met within their fibre supply, to put in a free market system.

I guess my question…. You used this example. Let’s go to your example of unallocated timber and B.C. Timber Sales timber being put together, bundled together to create a community licence. Is there any reason why the minister couldn’t take the unallocated portion and get the benefit of that back, even if it was a part of it, a part of the…? Let’s use…. I think you were using ten and ten — 10,000 cubic metres unallocated and 10,000 that’s B.C. Timber Sales. If you were to take that unallocated and if B.C.

Timber Sales got a commitment that a portion of that was going to be managed in such a way, let’s say, that 50 percent of it was going to be sold on the open market by the community, what advantage would there be?

I have seen, myself, up in Haida Gwaii, where a log seller, instead of having maybe 16 sorts, had 52 different sorts. In other words, they sorted for grade, so it was log grades as well as the species that they were identifying, trying to get maximum value out of every single log. I know, myself, again from experience, that some companies that do that extract more value out of the timber by using a little innovation.

In my mind, why can’t B.C. Timber Sales contract out, if you like — I can’t believe I’m saying these words — some portion to the community for the purposes of their being able to show that the market was satisfied? The community sells 50 percent of their timber supply on the open market, and 50 percent of it goes allocated to the local log home builder or specialty logs for building totems, for example, in the case of, say, Haida Gwaii. If there’s some portion that’s sold on the market, why couldn’t there be arrangements made so that B.C. Timber Sales gets the benefit of others’ open markets? That’s really what I’m saying.

[1410]

Again, you may have already considered this. Maybe it’s out of the question for some reason that I am unaware of. I would be interested because I think the overall goal, and I know my friend’s concern is: do we have a shrinking problem with B.C. Timber Sales, and is there a way to expand that? I think that’s what you’re trying to do — expand it.

[ Page 12093 ]

Are there new and innovative ways that you could expand the timber sales? Your staff would know more than I would.

For example, if a company was selling part of their timber supply on the open market, is there any reason why you couldn’t find a way to get credit for that to B.C. Timber Sales?

Hon. S. Thomson: That’s a really good question that the member opposite has raised. You know, this was before my time, but my understanding is that idea was looked at extensively at the beginning, when the system was set up. The result, and with the current market pricing system….

One of the keys to the current market pricing system is the consistency of having all of the same provisions and rules, whether that means…. If we looked at those opportunities there, they would have to comply with the same registrant pools, with the same advertising process — all of those rules. It would add significant costs to the community forest or the First Nation operation.

In order to maintain the credibility, one of the keys to it all is that it’s developed and auctioned in a consistent manner. As a single entity across the province, B.C. Timber Sales is uniquely situated to provide that function. A disproportionate amount of time would be required to resolve all the complex issues of accepting that data from a non–B.C. Timber Sales source for that market pricing system.

It has been looked at, but it has been determined that it wouldn’t provide the benefits that the member opposite outlined. What we’ve looked at here, in this process, is the ability to provide those benefits through to community forests and First Nations woodland licences, woodlots, through this process by having the agreement back and keeping the integrity and the base in B.C. Timber Sales that supports the current market pricing system.

B. Routley: If my notes serve me correctly, I had you saying that these reductions will apply to tree farm licences, community forests, First Nations and woodlots. I wondered if there were any other kinds of forest licences that were missing. For example, what about timber supply areas?

Are there any other licences that may or may not be included by these

definitions and the sections that are applied here?

[1415]

Hon. S. Thomson: The population of licences that this applies to: tree farm licences, forest licences, CFAs, First Nations woodland licences and woodlots. That’s the provisions. I’m not aware of other opportunities in forest licences to cut or…. Those kinds of things don’t lend themselves to this. It is the core of the licensing opportunities that the legislation makes provision for.

B. Routley: Does this specifically apply to the coast, then, of B.C.?

Hon. S. Thomson: It could be used on the coast or the Interior. It’s not regionally specific.

B. Routley: Do you know if you have plans to include the Interior in some of the…? You did use coastal examples like the Haida. I wondered if you had any examples in the Interior or the north.

The Chair: Through the Chair, Member.

Hon. S. Thomson: As I said, this is provincial legislation. It applies across the province. There are some discussions underway for potential opportunities in the Interior. I did reference a couple of examples, or one specific example, on the coast, because that one is well advanced.

There are others that are in discussion, and in terms of not prejudicing some of those discussions, I don’t want to list them and name them. But particularly, as we look for First Nations woodland licence opportunities…. I regularly get representation from communities around community forests. Part of the legislation, as you know, going further on in the legislation, is some amendments that provide for the opportunity for expansion of community forest boundaries.

There are some opportunities under discussion. We will look, as I said, to deploy this, utilize this, where it makes sense and where the opportunities exist on that limited basis. But this is legislation that’s provincial in scope.

B. Routley: One of your examples you were talking about was the Haida. In fact, I did hear about that when I was up that way. Were First Nations consulted about these proposals or this new idea?

[1420]

Hon. S. Thomson: Yes, there were discussions with First Nations in this process and through the Bill 25 development process previously and now these changes, the First Nations Forestry Council. It should be noted many of the opportunities that are currently being utilized or that are being advanced involve First Nations. These are around First Nations woodland licences. It’s a significant benefit and opportunity for them. So the short answer is yes.

B. Routley: Okay, and to be clear, using your example of the 80,000 cubic metres in Haida Gwaii, for example, I don’t know what percentage of that, but let’s just say that it was 50 percent B.C. Timber Sales. Now, just to be clear, does B.C. Timber Sales get that right by buying it back for some kind of fee, or is it going to be paid based on how much people bid on the timber?

If you could give us a little bit more of the specifics on how that might work when you are talking about B.C. Timber Sales having authority over it again. Who gets

[ Page 12094 ]

what, exactly, in terms of monetary compensation, and how does that system work?

Hon. S. Thomson: I know we’re still on

section 1, in the amendments and

definitions around AAC. The question the member asked is actually dealt with further on in the legislation,

section 5, under 22.4, which talks about the reduced non-BCTS licence. It notes that “in accordance with the regulations” will pay “the holder of a reduced non-BCTS licence the amount determined in accordance with the regulations for the amount of timber that is disposed of” under the BCTS licence.

[1425]

B. Routley: Was the woodlot association consulted?

Hon. S. Thomson: Yes, they were, and I’ll be quite open here. The woodlot association had some concerns on it. Most of those concerns were alleviated when they understood that it wasn’t going to be applied to existing woodlot licences unless it was by consent and on a go-forward basis with new woodlot opportunities.

This is enabling legislation, broader enabling legislation that provides us the tool. While the licences are part of the mix of licences where that could be…. I think it’s probably fair to say that we don’t see the woodlot program as being one of the major users or major opportunities in this program. I think it’s much more around community forests and First Nations woodland licences.

But we wanted to make sure we had the broad sweep, because there may be circumstances where it made sense and it could work. Again, very clearly, it doesn’t apply to existing licences. Once they had that assurance and understanding, the majority of their concerns were alleviated.

B. Routley: The question I have now is about tree farm licences. I think I heard you say words to the effect that people could volunteer for some kinds of changes. These would be licences that weren’t up yet. I guess my question is: what would be the incentive to volunteer, and would this apply to the renewal of tree farm licences on an across-the-board basis, or would this somehow be selective? How would that work?

Hon. S. Thomson: Just to be clear, that circumstance would only apply for an existing or a replaced tree farm licence with the consent of the holder.

B. Routley: Were there consultations with stakeholders, such as the coast forest employers association, Council of Forest Industries? What about unions that may be impacted?

[1430]

I might add that I recall when the government of British Columbia took 20 percent away from every forest licence, including tree farm licences. There were over 1,000 unionized forest workers that lost their jobs as a result of this government’s introduction. I don’t know if you’re aware of that. That was just on the coast of British Columbia. It was well over 1,000 unionized forest workers, who had family-supporting jobs here in British Columbia. Now it’s, basically, put out to tender.

Could you tell us: were those groups at all consulted in this whole process?

Hon. S. Thomson: Yes, the forestry associations were consulted in this — Coast Forest Products, COFI, Interior Lumber Manufacturers, Interior Logging Association.

[R. Lee in the chair.]

It’s important to recognize, in this, that this is about, primarily, a process that will benefit First Nation opportunities, benefit community forest opportunities — all those opportunities that are contemplated in here.

This is about finding that balance. It helps keep opportunities in local communities. Again, on balance, the whole — back to the original provision…. The original rationale and reason for these amendments here is to provide those opportunities there, and forestry associations were broadly consulted.

B. Routley: Thank you for that.

I learned when I was up in Haida Gwaii that they had concerns about getting their timber supply. I was told by local loggers there that they were not achieving their AAC. There was a variety of reasons given why they weren’t achieving their AAC.

Under B.C. Timber Sales, I would like to know — particularly, the fact that this is for First Nations — if you have made progress on ensuring that the AAC is achieved in First Nations licences. And how does that compare to other forms of licences — for example, community forest licences and that kind of thing? Is it relatively comparable or equal in either the problems or the existence of achieving their annual cuts over the five-year period?

Hon. S. Thomson: Just in terms of BCTS performance. As you know, we’ve had a very active process to ensure B.C. Timber Sales meets its sales targets, meets its performance targets.

[1435]

We don’t have the fourth-quarter final figures yet, but I think it would be quite accurate to stand and say that

[ Page 12095 ]

we’ll have achieved or be very close to achieving the targets that have been set.

As far as community forests, First Nations woodland licences, I would have to get that information separately for the member opposite. I know that the community forests, because those benefits are going back into the communities, because there’s local community involvement, generally meet their plan and their targets over the period.

First Nations woodland licences. Again, I would have to get some specific information for the member opposite. They’re a relatively newer entity, as we move to provide those opportunities. Many of those that we’ve provided are just in the first parts of their opportunity. But I can undertake to provide some more specific numbers for the member opposite.

B. Routley: I would appreciate that. That would be great to have some follow-up information.

I think I’m relatively satisfied that we’ve canvassed fully (a), (b), (

c) and (d). So (

e) is kind of a new concept talking about B.C. Timber Sales within the program of the ministry. There’s a new definition that says: “‘BCTS licence’ means (

a) a timber sale licence under

section 20, or (

b) a forestry licence to cut under

section 47.6 (3).” Then it goes on to….

Well, we’ll deal with B.C. Timber Sales first. Then we’ll focus later on the merchantable timber stuff. These

definitions of B.C. Timber Sales — what’s the benefit of that, and how does that impact B.C. Timber Sales exactly?

Hon. S. Thomson: This is nothing new here. These

definitions are in the existing Forest Act. Here we are simply moving them from

section 22.2 up to the front in the

definitions to provide for better readability. The terms will be used throughout the rest of the act, as the amendments are made to the bill — when we refer to B.C. Timber Sales or BCTS licence. It’s just a repositioning.

B. Routley: Thank you, Minister, for the answers.

Moving on to (

f) and (g). Boy, we’re just racing through this. The question here is about “the definition of ‘merchantable timber’ by striking out ‘were older’ and substituting ‘was older.’” That’s kind of how I feel these days. I went from “were older” to “was older.”

Anyway, could you explain that? And in (g), it says the definition: “…by striking out ‘are on an area’ and substituting ‘is on an area.’” It went from “are on an area” to “is on an area.” Again, what are the benefits to that for us, generally?

Hon. S. Thomson: Just as the member opposite suggested, “was” or “were” older — I’m not sure whether it makes much difference. You generally feel older, but this is just a very minor correction that corrects grammar and verb tenses in the definition.

H. Bains: I’m compelled to stand up to correct the minister and the member from Cowichan. You’re talking about “were older.” Speak for yourself.

I just want to go back to

section (

d) and (e). I probably need some clarification on this, because there is some new wording being added in relation to “reduction” under

section 14(1)(g). Perhaps the minister can explain both of these questions together. And then the next one, (e) — similar wording, but also that’s for the reduction under

section 45(1)(f.2).

[1440]

We know 35(1), 43.3, 43.55 plus TFL, community forest, First Nations. What are we talking about under these sections, 14(1)(g.2) and 45(1)(f.2)?

Hon. S. Thomson: So (d). This is a new subsection. It expands the definition of the AAC available to include the AAC set for the forest licence holder. Subsection (

i) then, under there, accounts for any subtraction from that set AAC by the volume reduction for the purposes of the disposition through the B.C. Timber Sales licence, which is what we’ve been talking about.

There is a note here around

section 70. This is a provision that accounts for any reduction that the chief forester might make under

section 70 of the act for causing or allowing excessive soil disturbance. So there’s a provision where the chief forester can do that if the licensee causes excessive soil disturbance. What we’ve got and made sure is that

section applies to the circumstances here.

And (

e) is a new subsection. It expands the definition of the AAC available to include the AAC set for a woodlot licence holder. Again, the subsection under it accounts for the subtraction from the AAC set by the timber reduction for purposes of the disposition.

Both of these amendments are consequential to the new provisions introduced in this bill that require the reduction in the amount of timber available to the forest licence, the woodlot licence or First Nations woodlot licences for the disposition purposes. They really are, essentially, consequential amendments that enact the intent of the legislation.

H. Bains: So that I understand, as consequential as they may be…. The reduction under

section 14.1(g.2) is for soil disturbance and the chief forester’s right to reduce the AAC. The second one was 45(1)(f.2), for woodlot licence holders reduction. Perhaps the minister can correct me if I’m wrong.

Then it goes on to (d)(ii): “except for the purposes of

section 70, a reduction under that section.” Can you explain? You talked about that under

section 70, he has the ability currently to reduce the AAC under 14(1)(

g) and 45(1). Then it goes on to say “except for the purposes of

section 70.”

[1445]

[ Page 12096 ]

Hon. S. Thomson: To clarify this, the sections which, as I indicated, are consequential relate to the reductions under 14, 45, etc., and are around the reductions for the disposition provisions.

What the second

section says, “except for the purposes of

section 70,” means that if the licensee has had a reduction as a result of that

section of the Forest Act being utilized, they can’t pass that reduction on as part of the…. It’s not part of the overall reduction. It separates out and applies the penalty provisions to the AAC that’s in the licence, not an AAC that would be transferred.

H. Bains: It separates these provisions from 35(1), 43.3 and 43.55 because they have their own purpose. But this one here is…. The reduction is made under a different purpose because of a soil destruction or disturbance or a woodlot area.

If it’s not under

section 70, in which the chief forester has the right to reduce the AAC, then under what

section do they come in? Is it a new

section giving the chief forester new authorities? Just explain what’s the…. I understand that when their AACs are reduced under 14(1) and 45(1), they cannot utilize that reduction, similar to as was listed in 43.3 or 43.55. These are, supposedly, penalties and, therefore, cannot be viewed, as was mentioned, in

section 1(a), (b), (c). Is that correct?

[1450]

Hon. S. Thomson: Again, this is really about, as I said, consequential amendments to it. What this does is that it sets up, in a sense, the counting of how you would undertake this. If you start out with the AAC, if there has been a reduction because of the application of

section 70, then you run the reduction from that AAC that’s available for the purposes of the disposition.

It’s really about what you calculate and pay annual rent on. What we wanted to make sure of is that in calculating this, in running this process, you set up the accounting so that the reduction only applies from the AAC down to what your AAC is that you’re putting into the disposition arrangement with B.C. Timber Sales.

Section 1 approved.

section 2.

H. Bains: Perhaps the minister can explain (a). “Section 8 is amended (

a) in subsection (5) by striking out….” It’s a change of wording. The way I see it, it says that “In determining…” is taken out. Instead, “In respect of…” is inserted. How does that change of wording…? What is being achieved through this section?

Hon. S. Thomson: Again, I think I’m responding to the question here. I think the question was: what’s the difference between “In determining an allowable annual cut…” or “In respect of an annual allowable cut determined under subsection (1)…”? I think it’s just sentence construction, grammar. There’s really, essentially, no difference in respect of that. The key pieces of it relate to that the chief forester may determine at any time and then specify: “The chief forester may, at any time….”

The intent of the

section is to allow the chief forester to specify a portion of the AAC, known as a partition, for harvest by timber type, by terrain area, all the purposes for that. What these amendments do in

section 2 is to allow the chief forester to establish, amend or cancel a partition order at any time so that the chief forester can manage forest health and stewardship concerns more quickly and effectively, rather than every ten to 15 years when the AAC is set. That’s the intent of the section. I think the first part of it is just structure.

[1455]

H. Bains: Essentially, what we’re talking about here in

section 8 is a partitioning proposition. The change of wording, as the minister said, doesn’t mean anything except that “at any time” is inserted: “The chief forester may, at any time, amend or cancel a specification made under subsection (5).” That’s the only thing that is being achieved, right?

Hon. S. Thomson: Again, the significant change is: “In respect of an allowable annual cut determined under subsection (1), the chief forester may, at any time, specify….” The previous wording said: “In determining an allowable annual cut under subsection (1) the chief forester may specify….”. It’s the way leg counsel redrafted the sentence structure, but it’s the addition of “the chief forester may, at any time, specify.” Then the balance follows.

B. Routley: Just to clarify, when you say the chief forester may, at any time, amend or cancel a specification made under the subsection, I assume that any time…. Is that in any way under the control of the minister? You used the example of timber types and terrain, which I fully support.

For example, I remember a chief forester suggesting that there may be times, given where we’re at in the cycle with the pine beetle, that companies need to be focused on marginal timber stands, marginal timber stands that may be out down the road apiece. I know, ideally, companies like to have wood within 100 miles or 100 kilometres of their manufacturing plant. That’s ideally. Given the circumstances that we now live in, in British Columbia, where, as we all know, the forest companies…. You know, I understand why they do it, but there’s a tendency to get the best of what’s left, whether it’s in their tree farm licence or in a timber supply area.

As a result of those practices, I think that there had to be a day come where we got to a point where the chief forester in the province had the ability to manage to make

[ Page 12097 ]

sure that we weren’t high-grading the forests of British Columbia or in some way using only the best timber and leaving the community with the prospect of there being a more dramatic falldown than needs to be necessary — if the chief forester directs that timber types that are, for example, dead and dying pine or to steer clear of all of the best spruce that might remain in a stand and that maybe you have to take a higher level of pine and those kinds of things.

I just want to be clear what the minister has in mind in this. Is this my imagination run wild, or is the government really trying to do the right thing by ensuring that we have higher-quality forests in the future of British Columbia and that we actually do ensure that marginal timber stands are utilized?

[1500]

Hon. S. Thomson: This is a very, very important part of this legislation. This is strengthening the tools, strengthening the role of the chief forester by being able to respond to emerging forest health stewardship issues at any time and not having to wait until the next AAC is set. So this really is about meeting the objective that the member opposite represents — a strengthened role or strengthened capacity for the chief forester in this regard.

B. Routley: Well, I must say that’s good news indeed from my perspective, that the chief forester is going to have a new tool that empowers him. But of course, with that empowerment, I hope there’s some cash, some money. Is there going to be any help for the chief forester? How is he actually going to be able to achieve this?

On the one hand, that’s a very good tool. But if you can’t leave the shop to actually utilize the tool…. In other words, if there’s no fuel for the plane to get up there, for him to go to have a look around or his staff to go and get out there and look around and report back…. Obviously, the oversight is necessary. I hope it’s not done in a discriminatory way — that you’re only picking on some. I hope it’s even-handed and across the province. It is important.

Finally, foresters, potentially, have the ability to, I would hope, influence the chief forester and have him look at problem areas and address them. Exactly how are you going to do this? Is there going to be additional funds allocated to bring this about?

Hon. S. Thomson: The key step in this is providing the ability to deal with this, as we pointed out, at any time. We think that provides an important new tool to the chief forester. It also provides the opportunity to deal with those emerging stewardship issues more regularly and in a more timely manner, which, with the existing support and tools, will help address that.

I have every confidence in the chief forester in that role. I’m pleased to be able to provide her with this additional tool.

Additionally, as you may know, the chief forester, along with myself, has provided a very strong direction to licensees around forest stewardship planning and expectations around that, which will assist in this role. I’m confident, with the additional tools and timing, that she will be able to perform her role well. I look forward to her continued work, and with this additional tool, I believe that will be significantly enhanced.

Section 2 approved.

section 3.

[1505]

H. Bains: I think we may have already canvassed this

section extensively under the

definitions

part in

section 1. Some of the exceptions are described here, especially under (b).

Maybe the minister could explain. He did explain that those provisions do not apply to the existing licence, but here are some of the exceptions to that, it seems to me. For example: “a forest licence entered into before the date this subsection” comes into effect — I think we canvassed that. Then: “(

b) a replacement for a replaceable forest licence, unless (

i) the forest licence already includes the requirement, or (ii) the holder of the forest licence agrees to include the requirement.”

I think it’s basically saying that the existing licence, unless they agree voluntarily, whether they’re replaceable or if the forest licence that replaces a tree farm licence…. I mean, those circumstances also, it seems to me, it doesn’t apply to.

And “(

i) the tree farm licence or forest licence that is replaced or amended already includes the requirement, or (ii) the holder of the forest licence that replaces a tree farm licence or forest licence, or that replaces or amends a forest licence, agrees to include the requirement.” So I guess if it’s the licence being replaced or it’s already existing, unless they voluntary agree, these provisions under this act will not apply to them. Is that basically what this

section talks about?

Hon. S. Thomson: I think we have canvassed this quite extensively in dealing with the original intent in the definition. This really is the

section that sets out the fact that it doesn’t apply to existing licences except by agreement or by consent. It includes the forest licences that originate under sections 16 and 19 of the Forest Act that allow the holder of one or more tree farm licences to replace those.

Really, it does set out the key provision that it doesn’t apply to existing licences unless by agreement or if the forest licence already includes the requirement. Again, it wouldn’t have it doubled up. It is the

section that clarifies that key provision of the legislation.

B. Routley: I think we did cover a lot of this, but in (a)(g.2), we talk about “a specified period of time.” I was

[ Page 12098 ]

just wondering: what was your thought process on that? Is that going to be in regulation? Is this going to be applied in every instance or occasionally? How would this be working?

Hon. S. Thomson: This

section was specifically written to provide the flexibility as we develop these agreements. It can mean for a specified period of time. That could be the total term of the licence or replacements, or it could be for a portion of that term of the licence. It really just sets out the flexibility. That will be developed in the regulation and then would be developed on a case-by-case basis, because this gives us the flexibility to do that, whatever makes the most sense in each opportunity.

[1510]

B. Routley: Under (a)(g.2), it ends that sentence with “all or part of the specified amount of timber, with one or more persons other than the holder of the…licence.” That seems to be introducing a new concept that we maybe didn’t canvass. How could there be…? If there are not just two parties, what other persons are we talking about here?

Hon. S. Thomson: I’ll respond to the question. Very quickly, I just want to correct my previous answer. I talked about the specified period of time being in regulation. It wouldn’t be in regulation. It would be in the licence. The legislation provides the flexibility to have different time frames for different circumstances. We wouldn’t set that out in regulation. We’d have the flexibility to be able to do that on a case-by-case basis.

In terms of this section, with one or more persons other than the holder of the forest licence. Really, what this

section does is prevent the non–B.C. Timber Sales licence holder from being a participant in bidding for that disposition or that licence or that opportunity that they provided back to BCTS.

They would put it out to their registered pool. What it would do is prevent the licensee or the person who’d made the arrangement from being part of that process. You don’t want to receive a financial benefit for it and then bid and get it back again. It prevents that situation from happening.

B. Routley: Well, in subsection (3), I guess it is, it’s clear that the purpose is that a forest licence entered into before this date wouldn’t be impacted by this. But it then goes on to say that a forest licence that already includes the requirement that is renewed…. That also wouldn’t be covered.

There was talk about a person having the opportunity to do this if they wanted to. I’m just wondering. In what circumstances can you even imagine they would want to?

Hon. S. Thomson: This goes back again to Bill 25, when this provision was established on a voluntary basis. Potentially, what could happen if you had a licensee that — for management reasons, for capacity reasons, for other objectives — would voluntarily provide the opportunity to B.C. Timber Sales for a benefit…. We could see circumstances where that develops.

[1515]

A purpose of what we’re debating here, in terms of the amendments, is to have that situation where you can, on a new licence and a new opportunity, build those provisions into the licence and the opportunity.

Again, as we discussed when we did Bill 25, the…. We saw the ability and the provisions in the voluntary approach and even in the directed approach here being limited in number, limited in overall scope and used in circumstances where it makes sense but not broad application.

Section 3 approved.

section 4.

B. Routley: Well, just to clarify, this seems to be a lot of housekeeping in order to achieve what’s set out. Is there anything that I’m missing? Is this not just housekeeping, or are there some hidden powers here that we need to be aware of?

Hon. S. Thomson: Housekeeping. No hidden powers.

Section 4 approved.

section 5.

H. Bains: I think it talks about payment for timber respecting non-BCTS licences with the reduction. I guess when you read this, along with the explanation that was given in

section 1…. During those circumstances, the tree farm licence, the AAC, is reduced. The BCTS utilized that for their auctioning purposes, and the benefit goes back to the licence holder.

My question here is: what are these payments for?

Hon. S. Thomson: This

section is the

section that requires a financial consideration be paid to the non–timber sale licence holder for the amount of the timber reduced. This is a benefit payment back to the licensee for the Crown timber harvesting rights that have been provided back to BCTS to auction. The benefits would be paid out of the BCTS special account. This sets up the process where the regulations would be developed for the amount of timber that’s provided back.

Really, this is just the enabling

section that says: “If you have that agreement and you provide it, you’re going to get….” The provision is there to be able to provide a benefit back to the licence holder for that provision and reduction in their timber harvesting rights.

[ Page 12099 ]

H. Bains: So that we are clear, we’re only talking about…. In general terms, when 20 percent was reduced to create BCTS, the licence holders were given payments or compensated according to the reductions that were made in their AACs. Here that’s not the case. The reduction may be made, but the timber essentially…. Although it goes to BCTS for their purpose of auctioning, the benefit goes back to the licence holder. There’s no addition.

[1520]

Is it going to be handled similarly to when BCTS was created and the determination was made on how much the licence holders would be paid at that time based on the reduction that they were required to make to their AAC? Is it a similar…? Or is this a separate setup and a separate system altogether with a different outlook to this?

Hon. S. Thomson: This

section sets out the requirement to pay in those provisions. It is a separate system. What will be paid will be determined in the regulation.

We will be working on developing that regulation in consultation, in the same process as we consulted in developing the legislation. I used an example previously. Although we haven’t landed on the final process, it could be, for example, a percentage of net revenue from the auction process that BCTS undertakes with that volume that has been provided to them.

There may be other models, but this

section simply sets out the fact that in providing that volume back and having the AAC reduced for the licensee, there will be a benefit paid to the licensee for that purpose.

H. Bains: My question was…. A similar formula would be used as when BCTS was created, when the overall AAC was reduced by 20 percent and different timber holders or licence holders were asked, or basically ordered, to reduce a certain amount of their AAC. There was a formula created at that time. I’m just asking if this is something new. Or is it a similar formula that was used at that time or in the past?

Historically, AAC has been reduced and the licence holder has been compensated. There has to be a formula in place. Is it a different formula, or is it the same formula?

Hon. S. Thomson: Just to confirm or advise the member opposite, it will be different. The amount to be paid for this will be determined in the regulation. We’re going to develop that in consultation with the stakeholders in this process. I used an example of what it may be.

What this

section simply does is sets out the fact that there will be a benefit to be paid, that it will be developed and determined with regulations and that it’ll be based on the amount of timber that’s disposed of under the BCTS licence.

H. Bains: Who will determine…? Under the regulations, you said it’s a consultation. I’m just trying to figure out why this would be something new when you already had a system to compensate licence holders in the past when their AAC was reduced. Why is this different than that?

[1525]

Hon. S. Thomson: Again, this is a new tool that is being provided for, and the provision here sets up the authority for the payment. It will be developed in regulation. It will be developed in consultation to ensure that the amount paid reflects the benefit that is being provided by the licensee and that it’s fair. We will do that in consultation with the licensees and with the industry in developing that regulation.

H. Bains: Let’s move to the new area but in a similar section. This

section authorizes payments under those circumstances to licence holders whose AAC is being reduced. How about the workers who depend on that AAC?

Part of that AAC is being reduced, but the licence holder will be compensated based on whatever formula you come up with under regulations. How about the workers who will lose their jobs as a result of this? Will they be compensated — severance pay, whatever?

Hon. S. Thomson: I’m not quite sure what the member opposite here is worried about, because what’s being proposed here is a benefit to community forests. It’s a benefit to First Nations woodland licences. It’s a benefit to woodlots, if we find that opportunity.

By having some of the volume come back to BCTS, BCTS has to lay it out, get it ready for auction. They employ people to do that. They make the opportunities available. That’s bid on by contractors, by registrants that, if they’re successful, employ people to do that.

The benefits that go back to the community forest will…. Those benefits flow in a number of different ways. They flow to communities. And the benefits that community forests make to their communities, in many communities, provide the opportunity for additional economic development and diversification within those communities, depending on how they utilize those resources.

If it’s flowing back through to First Nations, First Nations, in undertaking activities — because this will provide an opportunity to provide a licence where we might not normally be able to do one or provide a much-reduced opportunity — will be employing people and things in their activities on their own licence, or they’ll be contracting to do that.

Again — back to the original premise — this we see as a win for the community forests and those licensees, and the opportunities as a benefit in protecting the market pricing system. As I said earlier, you could portray this as maybe not quite such a win for B.C. Timber Sales, but in the overall balance of objectives, we see this as providing those opportunities.

[ Page 12100 ]

I think it will provide enhanced job opportunities in these licences, because we’ll be able to find unique ways to get an opportunity in places where we might not be able to otherwise, or we’ll be able to find a larger opportunity for those in those circumstances that we might not normally be able to do.

[1530]

H. Bains: I want to remind the minister that, under

section 1, we also talked about —

section 35 — tree farm licence, so it’s not just the community forest. We’re talking about a reduction of tree farm licence, although it could be a new tree farm licence.

If there is a tree farm licence which is non-BCTS and it is to a private entity — a person or a company — they will get a benefit, because of the reduction under this act. But their workers will also lose their jobs because a portion of their AAC is being reduced, coming to BCTS, and then BCTS is disposing of that part of the AAC, utilizing it for their own options.

What happened to those workers who would be losing jobs as a result of that tree farm licence reduction in their AAC?

Hon. S. Thomson: Just to be clear, again, to the member opposite: this applies to new licences. If, for example, a new tree farm licence was to be issued with it and we had this provision where a portion of it was allocated or disposed back to B.C. Timber Sales, we have two scenarios. One is you have that in place with a provision back, or if you weren’t utilizing B.C. Timber Sales as part of that, you’d have a smaller AAC in that licence.

I don’t see the scenario, I don’t see the opportunity, and I don’t see the issue of a fact that you might have a situation develop where there would be an impact on workers in that tree farm licence. You’re either going to have a tree farm licence of X, if it’s new, or you’re going to have a tree farm licence of X-plus, with the disposition agreement in it.

The only way to do this is to…. What we’re talking about here is utilizing portions of B.C. Timber Sales’ apportioned volume for these agreements.

H. Bains: The minister is saying, then, that under this, if there’s a new tree farm licence created and if it only comes from the BCTS part of the apportionment to create a new tree farm licence, or you’re adding to a tree farm licence from BCTS, then the only portion that is being added to the tree farm licence can be clawed back.

As I understand it, as we canvassed this before, if you are going to create a new tree farm licence from unallocated timber, you could have this provision in there. It could be 100,000 cubic metres issued to company A, and with this provision, later on it’s decided that 10,000 should be brought back in order to fulfil the BCTS mandate for their public auction. Then that 10,000 means that somebody will lose jobs in that tree farm licence.

Unless the minister is saying that the totally new tree farm licence cannot be created with unallocated timber? I mean, that’s the thing — unless the minister is saying the only area that we are talking about under this

section is if the tree farm licence is created only out of the BCTS existing AAC.

[1535]

Hon. S. Thomson: I don’t see the scenario that the member opposite is asserting here. Firstly, if it’s unallocated AAC in any form and it isn’t out and allocated and isn’t being utilized, then any allocation of it, whether it’s to a tree farm licence or to a community forest or anything, is going to create additional opportunity and additional harvest activity because it’s currently not being utilized.

We’ve got two…. Volume to support these will either come from unallocated AAC in some management units, where it exists, and in other management units from B.C. Timber Sales. So in any scenario here where this is utilized, by having the B.C. Timber Sales provision here that will be part of the terms and part of the licence allocation, that would be new.

Unless there is agreement, this doesn’t contemplate providing the licence and then going out later and taking some of that back in those provisions. This is about providing additional opportunity by utilizing, through an arrangement, a portion of a BCTS apportionment, which will help provide additional opportunities, which is both a benefit to the opportunity and maintains our market pricing system credibility.

B. Routley: Can you just give us some clarification on the matter of treaty negotiations? Have any of these forest licences come out of treaty negotiations? Do you contemplate that part of the package of offerings that government can present is these licences? Is that one of the underlying reasons for this whole exercise?

Hon. S. Thomson: No. As the legislation lays out, this applies to a specific set of licences: First Nations woodland licences, where they’re provided; community forests; and the other licences that we listed.

This does provide ongoing opportunity in building relations with First Nations, as we look to build opportunities and economic development in those communities and reconciliation with First Nations. So it provides an opportunity.

As I’ve said in all of the earlier discussion on this, this is designed to balance those objectives and find those opportunities where there are constrained opportunities, where there is a constrained fibre supply. I see all of this is as positive in continuing to build economic opportunity for First Nations.

[1540]

Section 5 approved.

[ Page 12101 ]

section 6.

H. Bains: I’m looking at

section 6 and comparing that to

section 3. I don’t see much that’s different, unless the minister could explain it to me. What is the difference between sections 3 and 6?

Hon. S. Thomson: The member opposite is correct: very, very little difference.

Section 3 applies to forest licences.

Section 6 applies to tree farm licences. It sets up the same construct and the same provisions.

H. Bains: It again talks about some of the exceptions. There are different exceptions, I notice, than

section 3, especially when you look at (

b) compared to the (

b) of

section 3. They do talk about it with different language. Can the minister explain why (

b) and (

c) are different, if we’re talking about the same kinds of exceptions, although they’re two different areas?

Hon. S. Thomson: Because we’re amending into different sections and it is a slightly different form of tenure, these provisions here, under

section 6, bring in the same principles of the previous section, which are the provisions to safeguard the rights of existing tenures.

It doesn’t apply to current licences, unless there’s consent. It can only be on a go-forward basis on the new provision. It sets in the same provisions, unless the tree farm licence holder agrees to include that they can’t be a participant in the process. It’s all the same provisions. The only differences are because it’s referencing into a different

section of the act. But it is to bring in exactly the same principles that were in

section 3 and to apply those to the tree farm licence.

Section 6 approved.

[1545]

section 7.

H. Bains: Under

section 7, it talks about a community forest agreement. I’m just going to ask the minister again. It’s a similar provision, as we just talked about, so it does not apply to the existing community forest agreement. Going forward, (

b) says: “a replacement for a replaceable community forest agreement, unless (

i) the community forest agreement already includes the requirement, or (ii) the holder of the community forest agreement agrees to include the requirement.”

It’s basically, essentially, saying that it will not apply to the existing community forest agreement but any future community forest may include these clauses.

Hon. S. Thomson: Yeah, the same provisions and same intent as the other sections. That protects the rights of existing community forest agreement holders and would only be utilized in new agreements going forward unless you have the consent of the existing community forest holder.

Section 7 approved.

section 8.

B. Routley: Again, could we just get some clarification on the purpose of “striking out ‘boundary or area’ and substituting ‘boundary or increase the area’”?

Hon. S. Thomson: This section, this proposed amendment, is needed in order to allow the minister to adjust the boundary or to expand the area of all categories of community forest agreements. It includes those competitively awarded agreements and those directly issued to non–First Nations communities.

In the current situation, minor boundary adjustments might be needed where a land use decision creates a sliver of area that would that would be best suited for management under a community forest agreement. It provides for that. It provides for larger expansions that do increase the total area of the community forest agreement that may be required to meet commitments to communities and allow governments and communities to meet changing circumstances and to provide those economic opportunities. This is really a piece that sets out our ability to look at opportunities for community forest expansion.

Section 8 approved.

section 9.

B. Routley: For the legions at home that are fixated on this fascinating discussion we’re having here — I find it fascinating, but maybe everybody doesn’t find as fascinating as we do, I’m sure — this

section 43.55 is amended “by striking out ‘and’ at the end of paragraph (h.1) and by adding the following paragraph.” For the record, we should read that in:

[1550]

“(h.2) may require that the amount of timber on Crown land within the first nations woodland licence area that is available to the holder of the first nations woodland licence be reduced by a specified amount of timber for a specified period of time for the purpose of entering into one or more BCTS licences, respecting all or part of the specified amount of timber, with one or more persons other than the holder of the first nations woodland licence, and….”

Well, let’s just stop and camp at the first part, because I’m sure the minister wants to explain the way that this could work. For greater certainty, I guess my question is: is there a limit that he has in mind, or is this kind of limitless? Would this be making up less than half of the new licence? Could there be circumstances where there’s

[ Page 12102 ]

more volume apportioned under the B.C. Timber Sales licence giveback than 50 percent? Is that a circumstance that you can see? Or is it possible? Let’s put it that way.

Hon. S. Thomson: This

section — and again, we’ve canvassed all of the principles of this at length — is simply taking the provisions that we’ve applied into the content of a tree farm licence, into the content of a forest licence, into the content of a community forest, taking those same provisions for First Nations woodland licences.

As we indicated previously, there is the legislation, and it does not limit the amount to any percentage. What we will do is look at each opportunity and each circumstance, based on the opportunity, based on volume that may be available directly for First Nations.

That will depend. In some cases, it might be a smaller portion of BCTS that you add to it in order to make a viable opportunity. In other cases, we may look to a larger percentage of a BCTS arrangement in it to provide that opportunity. It doesn’t set out a specified amount. It simply brings the same provisions that we’ve discussed for all of the other forms of licences in this section.

We’re going to move

section 10 at some point, and I’ll have the same answer. The content for woodlot licences is the same.

B. Routley: Okay, this (h.2) also talks about a period of time, and you did earlier specify that it could be that during the term of the licence would be the most likely scenario or upon renewal. Maybe this is too hypothetical, but how likely is it that these will be renewed? What’s the most likely term? Are these going to be, like, five-year licences? Ten-year? Do you ever envision where they’d be 20-year licences? What is going to be the standard time period? What would be your preference, at least at this point in time?

Hon. S. Thomson: As I commented previously, the legislation provides us the flexibility to deal with each of the circumstances, each of the opportunities, on a unique basis. That means specified amount, specified period of time.

[1555]

It can be different for the different licences, since the different licences have different lengths of terms when you issue them. I don’t have a preference.

What I have a preference for is to find the opportunities to be able to build those opportunities for communities and for First Nations and being able to utilize a portion of B.C. Timber Sales in an arrangement that helps us land those opportunities. That’s what I’m interested in. The provisions here simply give us the flexibility for an amount and for a period of time. That could be different for different licences, different areas.

I expect over time we’ll develop some consistency around some of those. But again, each opportunity is going to be unique, depending on how much volume we have available for the opportunities without having to utilize B.C. Timber Sales. It will have different percentages, depending on the circumstances in each area.

B. Routley: Thank you for that clarification that there are going to be differences. I do get it that there are unique areas throughout British Columbia. There are a lot of differences. I think you were clear that there doesn’t seem to be any specific template for the time or the term.

Would it be safe to say that this is subject to negotiations with First Nations or the community? Or is there some other thing that I should read into this, other than negotiations? Like, how else would you decide these things?

Hon. S. Thomson: Keep in mind a couple of objectives. As far as B.C. Timber Sales is concerned, we want to make sure we have the durable, reliable supply in order to meet the market pricing requirements. From a community perspective, they will want the benefits. They’ll want to see the increased opportunities. Same for First Nations.

I guess you could probably portray this — given that, in each area, it’s going to be a little different and everything like that — as a bit of a negotiation. But it will be a negotiation around meeting common objectives and some principles.

I don’t think in this case…. This is enabling legislation that provides the opportunity. We don’t want to have a template that you just walk in and say: “Well, unless you do it this way, it’s not going to happen.” What we want to be able to do is go into the community area and say “Here are our objectives. Here’s what we would like to achieve for the community or First Nation. Here’s the interest we have in this area for B.C. Timber Sales.”

That will be different. As you know, in some areas, we have higher volumes of BCTS on a percentage basis. You may be able to be a little bit more flexible. In some areas, we’ve already impacted BCTS levels for other reasons and things. You might have not as much flexibility in that case.

It will be a bit of a negotiation — but around achieving some core objectives.

B. Routley: Moving on to

section 9 (b) — and I will read this into the record — (3) says: “A requirement described in subsection (1) (h.2) must not be included in the following: (

a) a first nations woodland licence entered into before the date this subsection comes into force, unless the holder of the first nations woodland licence agrees to include the requirement….”

[1600]

Again, is that something that you have already experienced, as a ministry — where this has happened or you have interest from First Nations?

It goes on further, in (b): “a replacement for a replaceable first nations woodland licence….” This is not to hap-

[ Page 12103 ]

pen unless: “(

i) the first nations woodland licence already includes the requirement” — so it does kind of indicate there seems to be some experience in the ministry with this — “or (ii) the holder of the first nations woodland licence agrees to include the requirement.”

Again, I assume that’s part of negotiations, but do you have a number of circumstances where this is already a requirement? I mean, I assume you wouldn’t write this language just for the sake of having additional licences, if it didn’t mean anything. So there must be some circumstances where this is already in place. Is that correct?

[R. Chouhan in the chair.]

Hon. S. Thomson: Again, these are the same principles that apply to all the other licences. What it means is that we can’t go in and utilize the provision here on an existing First Nations woodland licence that we have already issued — we have issued a number of First Nations woodland licence opportunities — unless we have their agreement. We’re certainly not in discussions to that point with any of the ones that we’ve issued about taking that step.

As I talked earlier, given these provisions under Bill 25, you may have somebody approach us to say: “For capacity reasons and other reasons, we’d like to see about a disposition opportunity here.”

But again, this is on a go-forward basis — new licences that may be issued where there was an opportunity to provide an enhanced opportunity to the First Nations utilizing those provisions. This protects the rights and the agreements of those First Nations woodland licences that have already been issued.

Section 9 approved.

section 10.

B. Routley: Under

section 10, it adds a term to a woodlot licence. I think the minister did refer to the woodlot association having a meeting and that they did have some concerns. Did they have concerns about this particular section, and if so, what were their concerns?

[1605]

Hon. S. Thomson: This

section brings in the same provisions as all the other licences. The woodlot association was pleased that the provisions are there for not applying this to any existing woodlot licences unless it was by consent and by agreement or under the voluntary provisions that were there previously. So they like that

section and the fact that they’re treated the same as all the other licences.

I think it’s probably fair to say they didn’t see the same fit with this as you might see with a community forest or a First Nations woodland licence. They saw much more limited opportunity where this might work. But when we explained to them the way it would work and the financial benefit that would be paid, they were comfortable with being included in the overall intent here. They were pleased that we were treating them in the same way as all the licences. There wasn’t some different approach here.

I think it’s probably fair to say that given the nature of a woodlot and the fact that many woodlots include private land in the woodlot…. They just didn’t see this being a major application to the future opportunities for woodlot licences. They also would agree that there may be — again, because we don’t have a template and things — a circumstance, in some situation, where it might work. There might be a benefit that they would see for doing this, and we didn’t want to exclude them from the opportunity of doing that. We also made it clear that this is not applied to existing woodlot operations.

B. Routley: Yes. I do see the pattern with the language and this applying to woodlot owners as well.

Just as a matter of interest and because this would potentially apply to future woodlot licences, does your ministry have any idea at all how many new woodlot opportunities are going to be available on, say, an annual basis? Are there really any at all, or is it safe to say it’s all been allocated, and there’s not much left? I would be happy to be surprised by some great opportunities for ten a year or something. If that’s unrealistic, where are we at in granting new woodlot licences in the province of British Columbia?

Hon. S. Thomson: We work closely with the woodlot association. I don’t have the total number specifically at hand. We had a target and a goal to provide, through what we call the woodlot expansion program, those additional opportunities. I would have to check things. I don’t have it specifically with me in terms of where we are in that target and that goal.

We do work to continue to provide opportunities. I know I’ve had the opportunity to award some new woodlot licences over my term as minister here. I think I’m safe in standing and saying that there are some advertised opportunities out there. I know we’ve had one. The member from Powell River will know of one where we tried and were unsuccessful in providing the woodland opportunity because the community residents didn’t want that form of tenure in their area. We do run into challenges sometimes when we try to do it.

[1610]

We do understand and recognize the value of woodlots as a form of tenure and the benefits they bring and the approach they bring to forest operations and stewardship in those communities. I can undertake for the member to provide him with the current number of where we are in that program; what opportunities may be out there currently; potentially, what ones we see going forward.

[ Page 12104 ]

There is some opportunity. It’s probably fair to say it’s a little more limited.

The most significant requests we get currently are around trying to find the areas for the First Nations woodland licences and also the ongoing interest of communities in new community forest opportunities, existing community forests that have a volume that they would like to see enhanced or a process where we’ve got an invitation out to a community for a community forest, and they just want to see us move more expeditiously and faster in getting the opportunity landed. It’s always a challenge of finding the operating area and everything.

Again, I’ll provide the more specific numbers around the woodlots for the member opposite.

Section 10 approved.

section 11.

B. Routley: Yes, I see that we’re amending this by striking out “5 years” and substituting “10 years.” I just wanted to ensure that I understood who benefits by this change. I’m hoping that this is done for the ministry as well as it is for others. Is this somehow connected to these new powers of the chief forester to essentially make changes along the way? Is this for the benefit of the ministry as a whole? Who else does this benefit?

Hon. S. Thomson: This is not related at all to all of what we’ve been discussing up to date around the B.C. Timber Sales and the disposition agreements and all of this. This is into dealing with enhanced opportunities around fibre recovery.

Here, currently, the term of a fibre licence to cut must not exceed five years. This is a relatively short term, administratively burdensome to put into place. What we’re proposing here is to increase the term to ten years, because the licences generally are anticipated to be reissued, so providing the longer term decreases the administrative burden. It also provides greater business certainty to the licence holder who has that fibre supply licence to cut. Again, a step that helps enhance the opportunity for fibre recovery under this tool.

Section 11 approved.

section 12.

B. Routley: Is this mainly housekeeping? I understand it corrects a cross-reference, so there are no other additional powers that we should know about here. Is that correct?

Hon. S. Thomson: That’s correct.

Section 12 approved.

section 13.

B. Routley: Now we’re getting into…. Thank you for clarifying that we’re moving into fibre recovery. This is definitely going from harvested volume….

[1615]

This is what I would suggest is a key new change to the Forest Act that does repeal the definition of “harvested volume” and substitutes that harvested volume means….

Again, for the record, because I think this is important, harvested volume means “(

a) in relation to a licence to which a limit specified in an order made under

section 75.02 applies to the licence, the volume, as determined in accordance with the regulations, of the partitioned timber that is harvested under that licence or” — I think “partitioned,” for sure, is new — “(

b) in relation to 2 or more licences held by the same person to which a limit specified in an order made under

section 75.02 applies to the licences, the sum of the volume, as determined in accordance with the regulations, of the partitioned timber that is harvested under each of those licences.”

Then it goes on to say that “‘partitioned timber,’ in relation to an allowable annual cut partition, means the timber that is subject to the allowable annual cut partition.”

Do I have that correct? This partition is something that I recall we talked about when I was talking with the chief forester during the timber supply review back in 2012. I remember walking along the dusty road. It’s something that I’ll never forget, anyway. The chief forester said: “If the forest is a pie, we’ve got to look at ways to make sure that they’re getting a little bit more of the crust.”

By that, what he meant was: how do you deal with the fact that the appetite, when you look at the best of what’s left, is to take the best and not necessarily deal with the timber that needs to be dealt with from the perspective of, I would say, the province, the community — sustainability for the province and the community?

There have to be some motivational tools, if you like, to ensure that they’re not just taking the best of what’s left and that they are looking at partition timber. Also, this empowers the government to deal with what used to be viewed as forest waste, as I understand it. Am I correct that there are many uses for this new tool of partitioning? Could you list some of what you think the ministry is contemplating with the term “partitioning” of areas in the forest?

Hon. S. Thomson: This

section that we’re dealing with around the partitions — two things. We have a revised definition of “harvested volume,” which creates a broad enough definition in the regulation to capture all the different types of partitions that can be made.

[1620]

We now have partitions for live or dead, pine or non-pine. What we’ve done is broadened the definition. It’s important to point out that this broadened definition

[ Page 12105 ]

in this respect applies to the partition order made under

section 75.02, which is the partition

section of the Forest Act.

Then additionally, we put in a new definition of “partitioned timber.” That ensures the tracking for purposes of monitoring a partition so that it’s not confused with the tracking of timber volume for purposes of cut control.

Both of these amendments, by having the broader definition and by having the new definition in this amendment, give us an improved ability for the ministry, for the chief forester, to deal with emerging forest stewardship and health issues, as we pointed out earlier in one of the earlier amendments around this.

This is all about strengthening the tools — providing the broadened definition and a new definition around partitioned timber — to allow us to monitor and to ensure the tracking for purposes of the partition, and not to confuse the two between partition monitoring and application and cut control.

Section 13 approved.

section 14.

B. Routley: Again, this is more about partitioning. It allows the minister to specify limits, amend those limits on harvest volume of forest licences set out. It allows the minister, in determining a limit, to take harvested partitioned timber, as set out, into account. It clarifies the obligations of the holder of a licence, to which a limit specified in an order is made under this

section applies, to include ensuring the limit is not exceeded. It allows the minister to amend the term of an order as set out. It sets out when an order is cancelled and changes a licence period from five years to ten years.

Does this increase the ability of the minister to alter partitions that are made by the chief forester?

Hon. S. Thomson: No. What this does is it provides the additional authority for the minister to enforce the partitions that are made by the chief forester.

H. Bains: I think that there are some concerns here and that the minister probably would clarify.

This No. 14, the amendments to

section 75 — it appears to me that it does give the minister an increased ability to alter partitions made by the chief forester. If that’s correct, why are we moving powers from the chief forester — who’s supposed to understand, based on the science — and giving those discretionary powers to the minister to alter those partitions?

[1625]

Hon. S. Thomson: As I pointed out, the amendments in this

section provide additional strength and enforcement to the orders under the provision. The chief forester sets the partition. The minister, with these amendments, can provide the order.

A couple of important provisions of this. Currently the provisions, when they’re put in place, apply to the total area, aren’t applied to individual licensees. This now, with the change, means that when we say one or more forest licences, it means it can be applied to all, to one or to some of licensees in the area. All of this is strengthening the provisions of application of the partition direction from the chief forester through the partition orders.

H. Bains: I understand the mechanics of it. But the area that I’m concerned about is that the powers are shifted from the chief forester, who is supposed to make decisions based on science, available data, to the minister. I think that in doing so, we’re politicizing the system rather than making decisions based on data available to the chief forester.

That was my question. Why are we moving in that direction rather than staying with the chief forester, who is supposed to be doing these things and who has done it in the past?

[1630]

Hon. S. Thomson: Again, the chief forester’s role is to set the AAC — core responsibility to set partitions in that AAC. The administration of licensees and the enforcement of the partitions are the responsibility of the minister through that process.

It’s a formula-driven approach in many cases. The strengthening that we’ve brought in here with these changes…. One is the key change that allows the chief forester to set those at any time — also the ability to apply that to one licensee in a timber supply area as opposed to having to apply it to all. It may be more appropriate or more effective to apply it only to the one — to have it, as I said, happen at any time rather than during the determination of the AAC.

It also, if you’ve got two licensees in the area, now provides the flexibility to have that partition applied over the two licence areas so that you can shift harvest into one, if that is better for sustainability purposes, and not force the percentage to come out of the one licence area. So additional tools.

Then, also, with the definition changes. Bringing in the definition on “partitioned timber” allows us to monitor and ensure compliance with the enforcement order to a greater degree.

All of those are designed to strengthen the process and provide those additional tools and additional authority to have this be a more robust process.

H. Bains: Under (d), can the minister explain why we are changing from five years to ten years?

[1635]

[ Page 12106 ]

Hon. S. Thomson: A couple of reasons for this provision. One is that it more closely aligns the application of the partition in an order over the AAC determination process. It actually gives more strength in terms of the order. Five years is a relatively short time frame in the process. So if you have reasons and want to put the order in place, giving the ability to have that over ten years instead of five, we thought, was an additional step that would help ensure that when a partition is established and when an order needs to be put in place, it would be more effective over a longer period of time.

H. Bains: Does this affect the AAC as well? Normally, you have a five-year period to complete your AAC. Through this, does that change so that now we could go to ten years?

Hon. S. Thomson: I don’t think the member was…. I think the member probably, when referencing five years, was talking about cut control as opposed to AAC. This has no impact on AAC or cut control.

H. Bains: The minister said that five years is a relatively short period, but it’s been here for — how long? — as far as I can remember. Five years was the term used, and now we’re moving it to ten years. How do you determine that five years is no longer applicable or no longer practical and that we need to extend it to ten years? You try to explain, but it’s not coming clear — the real reasons behind this change from five years to ten years.

Hon. S. Thomson: This is not about changing the cut control process. Normally, and in most cases now, AAC is set for a ten-year period. What this would do is allow a partition to be established for the full time period of the AAC. If an order was required, it would allow you to have that partition order in place for the same length of the AAC period and the same length of the partition determination under that AAC.

H. Bains: The reason for a partition is for access to timber that may not be available under the existing licence. The partitions, to me, mean that we are bringing in additional timber. Then we partition and bring them into the AACs and utilize more timber through partitions.

Again, the period was five years. We had partitions before. Why are we changing now from five to ten years? What has changed?

[1640]

Hon. S. Thomson: Again, the chief forester sets the AAC, generally on a ten-year time frame, and within setting that AAC can set a partition which specifies, within that AAC, certain direction in establishing that AAC. Right now if the partition is set on that AAC and set for that time period and we want to put an order in place to enforce that partition, we can only do that for five years, which doesn’t line up with the term of the AAC — the setting of the AAC and the setting of that partition.

What we wanted to do by extending the period is to be able to line up the order with the partition which is set for that time frame. It allows us to align the provisions up between the AAC, the partition and an order that would enforce that partition.

H. Bains: Let’s move on. I think the number of areas it changed…. The amendments are made to change “holder of a licence” to be replaced by “holder of one or more licences.” I think it is listed in quite a few places. Maybe the minister can explain what we are trying to achieve by changing this language.

Hon. S. Thomson: The change here is designed to ensure effective implementation of the order. Where a licensee may have one or more licences in the area, the partition order applies to those licences together as opposed to individually.

[1645]

What that means is that it provides the additional stewardship flexibility to be able to…. Say you’re operating in this overall area, and you have one or more licenses. If an order is put in place, then it doesn’t mean that the provision of that order, the formula, the percentage, has to happen on each individual licence within that area. You could have a higher percentage in one where it would make sense and less in another licence.

The way it operates now, currently, is that if you do apply it, that exact formula percentage has to apply to each of those licences individually as opposed to collectively. So it provides greater flexibility in order to meet the intent of the order.

H. Bains: Will this not allow the holder of multiple licences to spread out a limit over multiple licences rather than limit to a specific licence?

Hon. S. Thomson: No, the limit would stay the same. It would give the flexibility to which licences they would apply that limit to.

H. Bains: Then again, I think it limits the ability of the minister to set limits for specific target reasons. Does it not do that?

Hon. S. Thomson: No, I think what this…. As I said, it doesn’t increase the limit. What it does do is provide the flexibility. They can’t harvest more than the limit would provide. What it does is provide that flexibility for the partition timber.

If X amount of dead pine had to be in that partition, if it made more sense to harvest the greater percentage of that dead pine in one of the licences as opposed to another part of the other area and under a separate licence,

[ Page 12107 ]

it makes sense, from the flexibility point of view and from a stewardship point of view, not to have that limit applied specifically to each licence.

You actually may achieve the objective in a stronger way by giving that flexibility. But again, it doesn’t increase the limits or doesn’t increase the amount that can be harvested. It provides us with an additional flexibility, when an order is put in place, in enforcing it and monitoring it.

B. Routley: Just on 14, I wanted to clarify that the partitions…. You’ve given some examples, but maybe…. I don’t know whether this is helpful or not. I think if there was a circumstance…. For example, in a timber supply area, it’s essentially like a wood basket. I have heard stories about the competing interests of companies in a timber supply area trying to find the best areas of what’s left.

As I understand, this allows the minister to ensure there is some balance or some fairness, that one company doesn’t get more healthy spruce and pine, let’s say. If necessary, he can be essentially like an umpire in deciding: “Wait a minute. This particular company has taken some of the best area and may need to have a partitioned area that has a lower-quality timber that makes up some percentage of their annual allowable cut. If they don’t take that lower quality or let more dead pine — let’s use more dead pine — then there isn’t going to be any other timber available for them.”

[1650]

Now, I don’t know if I have that right. Is that an example of where this might be used, or am I incorrect?

Hon. S. Thomson: No. All these provisions are about enforcing the AAC and the partitions that are set under the AAC by the chief forester. We, in constructing the amendments to this, looked at the steps that we need to take to have a stronger process around doing that. That relates back to being able to do it at any time rather than having to wait to be able to apply it to a single licensee and to be able to have a definition.

What it does ensure is that licensees — in their operations and their licences, if there is a partition in place around that — adhere to that partition direction, whether it’s a pine, non-pine, dead, alive partition, any of those. It allows and gives us the stronger tools to apply the partition direction that has been set by the chief forester in her AAC determination.

B. Routley: Well, I know my friend has attempted to get clarification on this. Maybe it’s just that I’m having a tough time getting it through my head, what you’re doing here — why it’s the minister and not the chief forester. I assume when you mean the minister, it’s not really the minister. It’s the minister’s staff who are making a lot of these determinations. Exactly why would you want to be the umpire, and not the chief forester, for the province of British Columbia — or your staff?

Hon. S. Thomson: Again, the chief forester’s role is to set the sustainable AAC for the management units and, as part of setting that AAC, the ability to set partitions within that AAC or as part of her determination.

The application of the licensing system and the provision of applying orders in compliance with the direction of the partitions that are set in the AAC are the minister’s responsibility. What we have done here, in these amendments, is strengthened the ability of the minister to apply those orders in those circumstances and increased the ability to focus on an individual licence and licensee — the ability to deal with it more regularly and with increased

definitions that help us do the monitoring and the tracking of that.

[1655]

It’s not in this provision here, but a key provision that was in earlier allows the chief forester to set partitions on a more expedited basis or an earlier basis, if required, as opposed to only when new AAC determinations are done.

I think all of these, combined, will strengthen the ability to have the application, or the compliance, with those partition directions out of the chief forester complied with. I think this is something that…. I know the members opposite have commented on this previously. We are responding by enhancing the ability around partition orders.

B. Routley: Well, I guess I would be happy if you could give us, at least, if not an exclusive list, a list of instances where partitions would be desirable within the ministry. I guess I imagine that partitions might be necessary where there was not enough harvesting of dead pine, for example, that you wouldn’t need to isolate an area and say, “Okay” — or marginal timber stands, or where high-grading was taking place.

If those are not examples, I’d like to be corrected on that and actually have the examples that are more closely aligned to what you’re thinking partition would be. So if you could give us a list of partitioned examples that you would use.

Hon. S. Thomson: The member opposite raises some examples that could be applied. That is the role and the responsibility of the chief forester. The chief forester would set those partitions.

We already have partitions in place for pine and non-pine, for dead, live. Another example: we may need a partition set in relation to addressing spruce beetle impact, for example. That might be another place where the chief forester stepped in and set a partition in order to direct harvesting into that area. The chief forester could come in and set a partition around high-elevation hemlock, or hem-bal, for example, if that was the case, if she felt that was important from a sustainability AAC point of view.

The provisions here are around the steps in order to give the chief forester the opportunity to set those partitions

[ Page 12108 ]

on a more regular basis, without having to wait for new AAC determinations. These provisions are around the enforcement on those provisions if an order is put in place.

Section 14 approved.

section 15.

H. Bains: I just want to ensure than sections 15 and 16 are consequential changes. Is that correct, Minister?

Hon. S. Thomson: Yes, both sections 15 and 16 are consequential to the amendment proposed earlier in the legislation here. They’re both consequential.

[1700]

Sections 15 and 16 approved.

section 17.

H. Bains: As I read it, I think the change that I see in

section 17, amending

section 75.06(1), is that it gives the minister powers to “grant relief, in whole or in part, from the penalty if the minister is satisfied that the reasons for the relief meet prescribed criteria.”

If the minister could explain: what is the prescribed criteria? How do you determine whether relief should be granted in whole or in part?

Hon. S. Thomson: This

section provides the opportunity for the licence holder to request and the minister to grant, as was pointed out, partial relief. Under the order, it provides greater flexibility in granting the relief from the penalty.

Right now it’s all or nothing. In making the decision, you don’t have the ability to look at the circumstances and say: “The appropriate penalty here is a portion of that.” There may be circumstances where there was an error. There may be circumstances where the partition direction was not communicated fully or something — a variety of circumstances.

What it really does is, instead of having to make the decision between nothing or all, you have the ability to now be able to assess a partial penalty, which I think gives us more flexibility when looking at that. But again, we would take each individual case, each individual circumstance into consideration.

H. Bains: Doesn’t that create a bit of a problem? How do you determine what is partial? It could vary from, I guess, penalty to penalty and licence holder to licence holder. Are there going to be set criteria on how you determine that the relief would be 25 percent relief, 30 percent relief, 50 percent or 75 percent? How do you determine that?

[1705]

Whole or nothing — at least it was clarified if the licence holder could convince the minister that the penalty was not justifiable or maybe give some reasons why it should be waived. Then that’s the criteria. You waive it. Either they have made a mistake, or they haven’t. How do you determine you’re half guilty?

Hon. S. Thomson: In this situation right now, it is the all-or-nothing provision. You may have circumstances where direction was provided, cut control information was provided. There may have been a mistake in some of the cut control information that was provided. The licensee may not have realized that they were into a penalty situation or something like that. It may be partially that. Some of it may be as a result of their actions.

What you want to do is be able to have that ability and assess each circumstance on a case-by-case basis, to be able to look at it and say, “Okay, was there a part of this that we need to take responsibility for, or was it all the licensee’s responsibility?” and to be able to have that flexibility for something in between.

Right now if there was a penalty provided and we determined that there was some responsibility on the ministry’s part, we don’t have that ability to say: “You need to pay a portion of this.” You either have to provide relief or assess the full penalty, which may not be appropriate.

Each circumstance will be assessed on the situation within each of those. Simply, with this provision, which is a change from the current provisions, instead of all or nothing, we have that ability to apply partial relief from a penalty if the circumstances warrant it.

H. Bains: Clearly, we’re setting ourselves up for having to be in a position to reduce all penalties. Right now they think twice. If they know that they’re in contravention and that there is a penalty, they better not make a lot of noise, because unless they have a really compelling case where the penalty could be waived entirely, they would simply pay the penalty.

The way human nature works, now everyone will be complaining and saying, “Well, I should not be faulted for this or this or this, and therefore, the penalty should be reduced” — hoping that something will come out of this. It could be 10 percent. It could be 50 percent. The tendency will be to cut everything in half, just to make them go away.

I think it’s creating a mockery of the whole system. If there’s a penalty…. If they commit something under the act or break the act, then there’s a penalty. I mean, somebody made the determination that the penalty is warranted, based on what they have observed, based on as their investigation and what the violation was. Now all of those who are facing this penalty would be saying: “Let’s give it a try. I shouldn’t be held responsible for this thing or this thing; therefore, the penalty should be reduced.”

[1710]

[ Page 12109 ]

I think you’re creating more work. Unless you are adding more resources for monitoring this process and exercising this process, you will be creating a lot of work for resources that you will not be adding to provide those who will be managing this. Is that not correct?

Hon. S. Thomson: No, I don’t think it is correct. When we have the situation of a request for relief from a penalty, whether it’s in whole or part, it’s going to have to be assessed. So whether you’re doing the work to assess whether there is relief from the penalty, if you’re having to do that work and the only option you have is to say yes or no, no relief, you still have to do the assessment of the request.

To have the flexibility, under circumstances, to provide partial relief I think gives us an added flexibility. We will have to assess each claim on its merit. So I don’t see the circumstances where this is creating a significant level of additional work.

I think what all of the provisions do here is give us increased tools to deal with the partitions set by the AAC, to deal with orders and also to have a more robust partition process from the chief forester by giving her the ability to set those partitions on a basis that doesn’t have to wait until a full new AAC determination is done.

Section 17 approved.

section 18.

H. Bains:

Section 18 is, again, a new

section here. It talked about: “(

c) for the purpose of the definition of ‘harvested volume’ in

section 75.01(1), specifying the rules, methods, formulas or requirements for determining the harvested volume, including, without limitation, requiring the holder of one or more licences to which an order under

section 75.02 applies to make assessments of the partitioned timber….”

Perhaps the minister could explain. Is it not…? A change is being made here that rather than considering grades of timber, it may make regulations in order to determine the harvested volume. Is that the direction we are going?

Hon. S. Thomson: This change here, the

section under the regulation-making powers, allows for amending of the regulation to clarify how the partitioned timber under the partition order would be tracked.

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The example is that the chief forester puts a partition in place to ensure that there is a specified portion of live and dead timber in a management unit. This amendment would allow the regulation to clarify what information will be used to determine the amount of live and dead timber under the minister’s order.

Currently, it’s not clear how those types of live and dead partition orders should be tracked. It creates some uncertainty among licence holders and impacts the enforceability of a partition order. What we’re providing for here, under the amendment, is the ability to set a definition and to set that definition in regulation that will provide us a greater ability to track the harvest for partition purposes.

H. Bains: The change clearly is this, as I see it. Previously, the grades of lumber were considered in order to consider or determine the harvest volume as part of it. But now it seems to me that the Lieutenant-Governor-in-Council may make regulations.

Again, rather than having a clear-cut definition of the harvested volume, now the minister is going to make those determinations through order-in-council. Why are we moving the determined formula to regulations, where the minister is now making those decisions?

Hon. S. Thomson: This section, as is pointed out, provides for the purpose of establishing a regulation under the definition. What we’re really looking for here in this change is the ability to have a regulation so that the tracking is clear. Right now, there is some ambiguity to what counts and doesn’t count.

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This will provide us to set, by regulation, an improved definition. It doesn’t necessarily mean that grades won’t be included in that definition. But what we found in the process is we need to make it clear through regulation for licensees of what counts towards the calculation and what doesn’t. This

section provides us the ability to do that.

Section 18 approved.

section 19.

H. Bains: I think this one is quite a significant section. I have some specific questions. Perhaps the minister could explain to those who are listening…. This is something new. I don’t believe that the government has ever done this before.

This is what, normally, the licensees will call waste — left behind to be burned. They take whatever they need out of the tree. The rest of the pieces are left behind, and normally, they get burned. Now this allows the minister to have an agreement with those licence holders and utilize that residual timber for someone else, a new party, to come in and make an agreement to have that removed — to utilize it, to create jobs and create some different products.

Maybe the minister could explain, if that’s what we’re talking about. Then, maybe, in detail, the minister could explain, in generality, what the purpose is behind

section 19.

Hon. S. Thomson: Thank you to the member opposite for the question. This is a significant section, as the member opposite pointed out. What we want to achieve

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with the changes here is to strengthen the ability to deal with residuals and with what some people call harvest waste. Obviously, the business approach in making those arrangements is the preferred way to deal with that, but that doesn’t always take place.

With all the changes hereunder, I’ll maybe just describe the current process. Under current provisions, the minister may order the primary harvester to notify if they intend to abandon any rights to Crown timber that has been cut but not removed. If the primary harvester notifies that there is an intent to abandon these rights, the minister may order the primary harvester not to destroy or otherwise deal with that Crown timber. If the primary harvester does not intend to abandon, the minister may order not to destroy it if the minister is satisfied that a market exists for that Crown timber.

What we’re doing with the provisions here is what we call a new fibre recovery process. Under the steps now, the minister may order the primary harvester to submit a report with an estimate of the residual fibre volume expected in the area, and the volume of residual fibre they do not intend to use. The minister may order the primary harvester not to damage some or all of that residual fibre for a specified period of time if it’s not being used. That could be amended or cancelled.

The primary harvester notifies the minister that he’s willing to abandon some or all of the fibre. There’s a period put in place where the primary harvester cannot deal with that residual fibre identified in the notice. At that point, the minister may “by order, specify some or all of the residual fibre” and issue, to a person other than the primary harvester, a fibre recovery permit or a forestry licence to cut. A copy of the order is sent to the primary harvester, written notice that the rights of the primary harvester to the residual are cancelled. That’s not compensable.

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Then, after that is issued — a licence for the residual fibre — the minister gives notice to the new agreement holder that the licence has been issued.

All of this is to set a process in place where we can set the notification, strengthen that process. If the fibre is not going to be utilized, there is a process now in place that will allow us to get to the point where we can put a do-not-damage, do-not-destroy order in place and make it available to a secondary user through a residual-fibre-licence approach.

That’s a fairly long answer, but all of this through these sections here is designed to strengthen our ability there to create a greater incentive for the business-to-business relationship first. But, ultimately, if that doesn’t take place, then we can take these steps.

H. Bains: My question would be…. The minister has a number of requirements, as he mentioned, under section (2). To advise the minister: “(

i) an estimate, made in accordance with the regulations, of the volume of residual fibre in the area at the time of the report; (ii) an estimate, made in accordance with the regulations, of the volume of residual fibre the holder of the agreement reasonably expects to be in the area at a time specified by the minister.”

The third one is about fibre that it does not intend to use.

A number of different requirements are there. You’ll get a report, but is there an audit process available now or under these regulations? How would you determine the correctness of the report coming to the minister? Will there be audits of such to determine that what is being reported to the minister is exactly what is on the ground and available?

[R. Lee in the chair.]

Hon. S. Thomson: In the case here, the process for providing those estimates and things will be set in regulation. Those regulations are to be developed.

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The current provision now is that they provide a report. It’s only a report on what’s harvested. In the provisions here, what we will require and can require in the reports is an estimate of the volume of residual timber that’s in the area at the time of the report; an estimate, made in accordance with regulations, of the volume of residual fibre that reasonably expects to be in the area at a time specified by the minister; and an estimate, made in accordance with the regulations, of the volume of residual fibre the holder of the agreement does not intend to use.

What this does is set in process a requirement to provide that reporting process in advance. Then we can plan with the secondary-user’s interests around what will be available, what we can work to try to facilitate in those business agreements, once we have that reporting process. This is part of the recommendations that have come out of the forestry fibre working group recommendations. What it does is it develops this process in advance, as opposed to waiting till all the harvest is happening and simply having a report that says: “Now this is what we have.” It incents or requires that advance planning process.

I think it’s going to give us a better tool in terms of looking to set up the arrangements, looking to know what’s there. If the report is that the primary harvester is not going to be using that, we can put the order in place that says, “You can’t damage that; you can’t destroy it,” because we know what is reported and what is there. Then we have the ability to set up the licence for the secondary user to go in and access that.

What happens now is that we don’t get that information until after the fact. In many cases, you are playing catch-up instead of dealing with it proactively.

H. Bains: I get that. But I think, again, there’s no auditing process in place. The minister has no access to audit those reports. That’s what my question was. If the answer

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is no, you will solely rely on the reports by the licensee and take whatever the report is as the fact. It is what it is. If there is no auditing, then you will never know what exactly is left behind, not intended to be used. You will never know. Anyway, I’ll move on.

The next thing. It says: “if the residual fibre is not being utilized or is not going to be utilized, not to damage some or all of the residual fibre for a period of time specified by the minister in an area specified by the minister.” Can the minister explain what the specified period is that this

section applies to?

Hon. S. Thomson: In this case, what the legislation provides here, as was pointed out, is a period of time specified. That will be different in different circumstances.

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What we want to be able to do in the case where you’re going to provide the licence and the opportunity to access that, and you’re putting the order in place not to damage that, is to put it in place for a period of time that would allow the secondary harvester to plan to access the materials. You don’t want to put it in place and say: “It’s only available for three months” or “Don’t destroy it within that time period when the secondary harvester may need more time to plan and access that.”

You want to work in combination between the opportunity, the amount of time that will be required to access that opportunity, the needs of the secondary user who is going to be provided the licence. This simply gives the ability to set a time. Each situation may be a little different in terms of the amount of time that would be required.

H. Bains: Will there be any provisions in here about compensation to the primary licence holders?

Hon. S. Thomson: No.

H. Bains: Will there be any cost to the secondary timber holder, the person who will be given the licence to utilize the residual timber?

Hon. S. Thomson: In these situations, obviously there’s a cost to the licence holder, an operating cost to go in and access the residual timber that’s available in there. In terms of the licence, it will depend, because there may be competing interests for that, in which case it would be competitively awarded. So there may be a cost to the awarding of the licence if there is more than one interest in it.

Those provisions are to be worked out. But in terms of the general provisions, no, there is not a fee per cubic metre, in a sense, or any of those kinds of things. It would be a licence and availability to go in and get it.

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There may be a cost through the competitive process, and then there’ll be their operating cost to go in and access that available residual fibre that is there.

H. Bains: Obviously, there will be an operating cost to potential licence holders. I wasn’t talking about that. I’m talking about fee per cubic metre, and the minister said no, there won’t be. But then he also opens up, saying if there are competing interests, if there is more than one interest….

What was the minister talking about — that then there could be a cost? Maybe the minister could explain to the House: how could that be? Is it, then, going to be a bidding war going on between two or more proponents? Who does that money go to? There is a certain process put in place where they are starting to bid. Who are they bidding to? Where will the money go to if there are going to be any financial interactions as a result of that bidding?

Hon. S. Thomson: Just to clarify, we already have the ability for the fibre supply licences to cut, the residual licences. Those processes are known and well known to the industry, about how that process works. It includes a competitive bid process in which, in certain circumstances, it can be awarded. There would be stumpage to be paid if there was merchantable timber in that. There’s no cost for appraisal. There are various conditions of the licence.

What the provisions here in the legislation do is set up the enhanced or the greater opportunity for access to that fibre by requiring the pre-reporting, the planning process and everything like that. All of that system is designed to create the opportunity for greater access. This doesn’t change the existing provisions around fibre supply licences and the residual fibre licences that are already available and understood and utilized.

What we’re looking at here is an enhanced process where we can have more of those licences made available and do it in a preplanning process if the business-to-business arrangements can’t be made between a primary harvester and a secondary user.

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H. Bains: I think on on