20200731pm CommitteeA n20

British Columbia — Debates (Hansard)

Fifth Session, 41st Parliament REPORT OF PROCEEDINGS (HANSARD) COMMITTEE OF SUPPLY ,

SECTION A Virtual Meeting Friday, July 31, 2020 Afternoon Meeting Issue No. 20 Presiding Officers: RAJ CHOUHAN, DEPUTY SPEAKER SPENCER CHANDRA HERBERT, DEPUTY CHAIR, COMMITTEE OF THE WHOLE ISSN 2563-3511

PROVINCE OF BRITISH COLUMBIA (Entered Confederation July 20, 1871) LIEUTENANT-GOVERNOR Her Honour the Honourable Janet Austin, OBC Fifth Session, 41st Parliament SPEAKER OF THE LEGISLATIVE ASSEMBLY Honourable Darryl Plecas EXECUTIVE COUNCIL Premier and President of the Executive Council ............................................................................................................... Hon. John Horgan Deputy Premier and Minister of Finance............................................................................................................................Hon.

Carole James Minister of Advanced Education, Skills and Training..................................................................................................... Hon. Melanie Mark Minister of Agriculture.........................................................................................................................................................Hon. Lana Popham Attorney General.................................................................................................................................................................Hon.

David Eby, QC Minister of Children and Family Development ............................................................................................................ Hon. Katrine Conroy Minister of State for Child Care...................................................................................................................................... Hon. Katrina Chen Minister of Citizens’ Services...................................................................................................................................................Hon.

Anne Kang Minister of Education ............................................................................................................................................................ Hon. Rob Fleming Minister of Energy, Mines and Petroleum Resources ..................................................................................................... Hon. Bruce Ralston Minister of Environment and Climate Change Strategy............................................................................................. Hon.

George Heyman Minister of Forests, Lands, Natural Resource Operations and Rural Development ..............................................Hon. Doug Donaldson Minister of Health .....................................................................................................................................................................Hon. Adrian Dix Minister of Indigenous Relations and Reconciliation ......................................................................................................... Hon.

Scott Fraser Minister of Jobs, Economic Development and Competitiveness.............................................................................Hon. Michelle Mungall Minister of State for Trade...............................................................................................................................................Hon. George Chow Minister of Labour ...................................................................................................................................................................Hon.

Harry Bains Minister of Mental Health and Addictions............................................................................................................................ Hon. Judy Darcy Minister of Municipal Affairs and Housing.................................................................................................................. Hon. Selina Robinson Minister of Public Safety and Solicitor General ........................................................................................................... Hon.

Mike Farnworth Minister of Social Development and Poverty Reduction..............................................................................................Hon. Shane Simpson Minister of Tourism, Arts and Culture.....................................................................................................................................Hon. Lisa Beare Minister of Transportation and Infrastructure................................................................................................................ Hon.

Claire Trevena LEGISLATIVE ASSEMBLY Leader of the Official Opposition................................................................................................................................Andrew Wilkinson, QC Leader of the Third Party .................................................................................................................................................................Adam Olsen Deputy Speaker................................................................................................................................................................................

Raj Chouhan Assistant Deputy Speaker............................................................................................................................................................. Simon Gibson Deputy Chair, Committee of the Whole ................................................................................................................ Spencer Chandra Herbert Clerk of the Legislative Assembly ...........................................................................................................................................

Kate Ryan-Lloyd Law Clerk and Parliamentary Counsel.............................................................................................................................. Seunghee Suzie Seo Clerk Assistant, Parliamentary Services...........................................................................................................................

Artour Sogomonian Clerk Assistant, Committees and Interparliamentary Relations ..............................................................................................Susan Sourial Senior Research Analyst ................................................................................................................................................................. Jennifer Arril Senior Research Analyst ...................................................................................................................................................................

Karan Riarh Acting Sergeant-at-Arms..................................................................................................................................................................Greg Nelson

ALPHABETICAL LIST OF MEMBERS Ashton, Dan (BC Liberal) ......................................................................... Penticton Bains, Hon. Harry (NDP)................................................................ Surrey-Newton Barnett, Donna (BC Liberal) .....................................................Cariboo-Chilcotin Beare, Hon. Lisa (NDP)..............................................

Maple Ridge–Pitt Meadows Begg, Garry (NDP) .......................................................................Surrey-Guildford Bernier, Mike (BC Liberal) .........................................................Peace River South Bond, Shirley (BC Liberal)...........................................Prince George–Valemount Brar, Jagrup (NDP).......................................................................Surrey-Fleetwood Cadieux, Stephanie (BC Liberal)........................................................

Surrey South Chandra Herbert, Spencer (NDP) .......................................Vancouver–West End Chen, Hon. Katrina (NDP)...................................................... Burnaby-Lougheed Chouhan, Raj (NDP) .................................................................Burnaby-Edmonds Chow, Hon. George (NDP).................................................Vancouver-Fraserview Clovechok, Doug (BC Liberal) ..................................Columbia River–Revelstoke Coleman, Rich (BC Liberal) ................................................................ Langley East Conroy, Hon.

Katrine (NDP)...........................................................Kootenay West Darcy, Hon. Judy (NDP) ............................................................. New Westminster Davies, Dan (BC Liberal) ........................................................... Peace River North de Jong, Michael, QC (BC Liberal) ..............................................Abbotsford West Dean, Mitzi (NDP)................................................................ Esquimalt-Metchosin D’Eith, Bob (NDP) ................................................................Maple Ridge–Mission Dix, Hon.

Adrian (NDP)....................................................... Vancouver-Kingsway Donaldson, Hon. Doug (NDP)...................................................................... Stikine Eby, Hon. David, QC (NDP).............................................. Vancouver–Point Grey Elmore, Mable (NDP).........................................................Vancouver-Kensington Farnworth, Hon. Mike (NDP) ........................................................Port Coquitlam Fleming, Hon. Rob (NDP) ......................................................

Victoria–Swan Lake Foster, Eric (BC Liberal).............................................................Vernon-Monashee Fraser, Hon. Scott (NDP) ..................................................Mid Island–Pacific Rim Furstenau, Sonia (BC Green Party) .............................................Cowichan Valley Gibson, Simon (BC Liberal) ...................................................Abbotsford-Mission Glumac, Rick (NDP).........................................................Port Moody–Coquitlam Heyman, Hon. George (NDP) ................................................Vancouver-Fairview Horgan, Hon.

John (NDP) ................................................ Langford–Juan de Fuca Hunt, Marvin (BC Liberal) ........................................................ Surrey-Cloverdale Isaacs, Joan (BC Liberal) .......................................... Coquitlam–Burke Mountain James, Hon. Carole (NDP).................................................... Victoria–Beacon Hill Johal, Jas (BC Liberal).................................................Richmond-Queensborough Kahlon, Ravi (NDP)............................................................................... Delta North Kang, Hon.

Anne (NDP)......................................................... Burnaby–Deer Lake Kyllo, Greg (BC Liberal)..............................................................................Shuswap Larson, Linda (BC Liberal) .............................................. Boundary-Similkameen Lee, Michael (BC Liberal) ........................................................Vancouver-Langara Leonard, Ronna-Rae (NDP) ..................................................... Courtenay-Comox Letnick, Norm (BC Liberal).............................................

Kelowna–Lake Country Ma, Bowinn (NDP) .....................................................North Vancouver–Lonsdale Malcolmson, Sheila (NDP) ........................................................................Nanaimo Mark, Hon. Melanie (NDP) .......................................Vancouver–Mount Pleasant Martin, John (BC Liberal)....................................................................... Chilliwack Milobar, Peter (BC Liberal)..................................... Kamloops–North Thompson Morris, Mike (BC Liberal) ........................................... Prince George–Mackenzie Mungall, Hon.

Michelle (NDP)......................................................Nelson-Creston Oakes, Coralee (BC Liberal) ............................................................ Cariboo North Olsen, Adam (BC Green Party)............................ Saanich North and the Islands Paton, Ian (BC Liberal).......................................................................... Delta South Plecas, Hon. Darryl (Ind.) ........................................................... Abbotsford South Polak, Mary (BC Liberal) ............................................................................. Langley Popham, Hon.

Lana (NDP)............................................................... Saanich South Ralston, Hon. Bruce (NDP) ............................................................Surrey-Whalley Redies, Tracy (BC Liberal) .......................................................Surrey–White Rock Reid, Linda (BC Liberal) ................................................. Richmond South Centre Rice, Jennifer (NDP) ............................................................................. North Coast Robinson, Hon.

Selina (NDP) .........................................Coquitlam-Maillardville Ross, Ellis (BC Liberal)................................................................................... Skeena Routledge, Janet (NDP) ....................................................................Burnaby North Routley, Doug (NDP) ................................................. Nanaimo–North Cowichan Rustad, John (BC Liberal) ................................................................Nechako Lakes Shypitka, Tom (BC Liberal) ..............................................................

Kootenay East Simons, Nicholas (NDP) ......................................... Powell River–Sunshine Coast Simpson, Hon. Shane (NDP)..................................................Vancouver-Hastings Sims, Jinny (NDP) ........................................................................ Surrey-Panorama Singh, Rachna (NDP) .........................................................Surrey–Green Timbers Stewart, Ben (BC Liberal) ................................................................. Kelowna West Stilwell, Michelle (BC Liberal)...............................................

Parksville-Qualicum Stone, Todd (BC Liberal)..........................................Kamloops–South Thompson Sturdy, Jordan (BC Liberal)........................................ West Vancouver–Sea to Sky Sullivan, Sam (BC Liberal)................................................ Vancouver–False Creek Sultan, Ralph (BC Liberal) ...........................................West Vancouver–Capilano Tegart, Jackie (BC Liberal) ................................................................. Fraser-Nicola Thomson, Steve (BC Liberal)......................................................

Kelowna-Mission Thornthwaite, Jane (BC Liberal) ...............................North Vancouver–Seymour Throness, Laurie (BC Liberal) .......................................................Chilliwack-Kent Trevena, Hon. Claire (NDP) ................................................................North Island Wat, Teresa (BC Liberal) ................................................. Richmond North Centre Weaver, Dr.

Andrew (Ind.)................................................Oak Bay–Gordon Head Wilkinson, Andrew, QC (BC Liberal) ................................Vancouver-Quilchena Y ap, John (BC Liberal)............................................................Richmond-Steveston LIST OF MEMBERS BY RIDING Abbotsford-Mission............................................................................Simon Gibson Abbotsford South....................................................................... Hon. Darryl Plecas Abbotsford West......................................................................

Michael de Jong, QC Boundary-Similkameen...................................................................... Linda Larson Burnaby–Deer Lake....................................................................... Hon. Anne Kang Burnaby-Edmonds................................................................................Raj Chouhan Burnaby-Lougheed .................................................................... Hon. Katrina Chen Burnaby North .................................................................................

Janet Routledge Cariboo-Chilcotin .............................................................................Donna Barnett Cariboo North.................................................................................... Coralee Oakes Chilliwack ............................................................................................... John Martin Chilliwack-Kent ...............................................................................Laurie Throness Columbia River–Revelstoke .........................................................

Doug Clovechok Coquitlam–Burke Mountain.................................................................. Joan Isaacs Coquitlam-Maillardville ...................................................... Hon. Selina Robinson Courtenay-Comox................................................................... Ronna-Rae Leonard Cowichan Valley .............................................................................

Sonia Furstenau Delta North.............................................................................................Ravi Kahlon Delta South ..................................................................................................Ian Paton Esquimalt-Metchosin ..............................................................................Mitzi Dean Fraser-Nicola .........................................................................................

Jackie Tegart Kamloops–North Thompson .............................................................Peter Milobar Kamloops–South Thompson..................................................................Todd Stone Kelowna–Lake Country .....................................................................Norm Letnick Kelowna-Mission ..............................................................................

Steve Thomson Kelowna West ..........................................................................................Ben Stewart Kootenay East.......................................................................................Tom Shypitka Kootenay West........................................................................ Hon. Katrine Conroy Langford–Juan de Fuca .............................................................. Hon. John Horgan Langley .....................................................................................................

Mary Polak Langley East.........................................................................................Rich Coleman Maple Ridge–Mission.............................................................................. Bob D’Eith Maple Ridge–Pitt Meadows............................................................Hon. Lisa Beare Mid Island–Pacific Rim................................................................ Hon. Scott Fraser Nanaimo......................................................................................

Sheila Malcolmson Nanaimo–North Cowichan............................................................... Doug Routley Nechako Lakes........................................................................................ John Rustad Nelson-Creston ................................................................... Hon. Michelle Mungall New Westminster........................................................................... Hon. Judy Darcy North Coast ...........................................................................................

Jennifer Rice North Island.............................................................................. Hon. Claire Trevena North Vancouver–Lonsdale................................................................... Bowinn Ma North Vancouver–Seymour........................................................Jane Thornthwaite Oak Bay–Gordon Head............................................................Dr.

Andrew Weaver Parksville-Qualicum.......................................................................Michelle Stilwell Peace River North ................................................................................... Dan Davies Peace River South ................................................................................ Mike Bernier Penticton ................................................................................................. Dan Ashton Port Coquitlam...................................................................... Hon.

Mike Farnworth Port Moody–Coquitlam.......................................................................Rick Glumac Powell River–Sunshine Coast....................................................... Nicholas Simons Prince George–Mackenzie....................................................................Mike Morris Prince George–Valemount ..................................................................

Shirley Bond Richmond North Centre..........................................................................Teresa Wat Richmond-Queensborough.........................................................................Jas Johal Richmond South Centre ......................................................................... Linda Reid Richmond-Steveston ...................................................................................

John Y ap Saanich North and the Islands .............................................................Adam Olsen Saanich South .............................................................................Hon. Lana Popham Shuswap...................................................................................................... Greg Kyllo Skeena........................................................................................................... Ellis Ross Stikine....................................................................................Hon.

Doug Donaldson Surrey-Cloverdale ................................................................................ Marvin Hunt Surrey-Fleetwood.....................................................................................Jagrup Brar Surrey–Green Timbers........................................................................Rachna Singh Surrey-Guildford......................................................................................Garry Begg Surrey-Newton ..............................................................................Hon.

Harry Bains Surrey-Panorama ...................................................................................... Jinny Sims Surrey South ................................................................................ Stephanie Cadieux Surrey-Whalley ......................................................................... Hon. Bruce Ralston Surrey–White Rock .............................................................................. Tracy Redies Vancouver-Fairview.............................................................. Hon.

George Heyman Vancouver–False Creek........................................................................ Sam Sullivan Vancouver-Fraserview...............................................................Hon. George Chow Vancouver-Hastings ............................................................... Hon. Shane Simpson Vancouver-Kensington....................................................................... Mable Elmore Vancouver-Kingsway..................................................................... Hon.

Adrian Dix Vancouver-Langara................................................................................ Michael Lee Vancouver–Mount Pleasant..................................................... Hon. Melanie Mark Vancouver–Point Grey ............................................................Hon.

David Eby, QC Vancouver-Quilchena........................................................Andrew Wilkinson, QC Vancouver–West End .....................................................Spencer Chandra Herbert Vernon-Monashee ....................................................................................Eric Foster Victoria–Beacon Hill.................................................................. Hon. Carole James Victoria–Swan Lake.................................................................... Hon. Rob Fleming West Vancouver–Capilano...................................................................

Ralph Sultan West Vancouver–Sea to Sky................................................................Jordan Sturdy Party Standings: BC Liberal 42; NDP 41; Independent 2; BC Green Party 2

CONTENTS Friday, July 31, 2020 Afternoon Meeting Page Committee of Supply Proceedings in

Section A ......................................................................................................................................................... 355 Estimates: Ministry of Forests, Lands, Natural Resource Operations and Rural Development(continued) M. Stilwell Hon. D. Donaldson J. Rustad D. Barnett

FRIDAY , JULY 31, 2020 The committee met at 1:31 p.m. [S. Malcolmson in the chair.] Committee of Supply Proceedings in

Section A ESTIMATES: MINISTRY OF FORESTS, LANDS, NATURAL RESOURCE OPERATIONS AND RURAL DEVELOPMENT (continued) On Vote 29: ministry operations, $489,126,000 (continued). The Chair:Good afternoon, Members. I want to recognize that I am on the traditional territory, the existing territory, of theLək̓ ʷəŋin̓ əŋ-speaking people, Esquimalt and Songhees. We extend our appreciation for being able to work on their land. The other members here on the committee are on traditional territory all over the province. Glad to see all these faces and all these people representing British Columbians.

We are meeting today to continue the consideration of the budget estimates for the Ministry of Forests, Lands, Natural Resource Operations. Did you want to make any opening comments, opposi- tion critic? J. Rustad:Sure, I’ve just got a quick half-hour statement to make. Sorry, just joking. It’s Friday afternoon. We’ve got a lot of material to cover, obviously, and I don’t want to be too wordy. My colleague from Parksville-Qualicum has a few issues that she’ d like to raise. I’ve notified the minister’s office in advance. So I’ll turn the floor over to her.

Then when she’s done, we’ll start off where we left off, a little bit on stumpage and some other things. With that, Madam Chair, over to my colleague from Parksville-Qualicum. The Chair:Thank you, Member. I recognize my neighbour, the member for Parksville- Qualicum. M. Stilwell:Well, thank you, hon. Chair, and thank you, Minister, for the opportunity to ask some questions of you today in regards to my riding. I’ d like to start off today just by talking about the min- isterial mandate letter that was given to the minister.

On page 3, the mandate letter that was given to the minister by the Premier states that the Premier expects the minister to “expand our innovative wood product sector by address- ing regulatory and capital barriers hampering the growth of engineered wood production. ” I’ d just like to know, to start, if the minister can tell me if that mandate letter has been amended. If so, when was it amended and made public? The Chair:For the benefit of the public, what we are doing is reviewing the budget estimates and the policy pri- orities of the various ministries as they relate to spending.

This is the opposition’s opportunity to ask questions directly of the minister, and these very long pauses in between are when the minister is talking with his senior staff. So it makes for not the most gripping viewing some- times, because there are these long delays, but it means that we’re getting the best information on the record that we can. [1:35 p.m.] Hon. D. Donaldson:Thank you, Chair. Welcome to the chair. Good to see the member for Parksville-Qualic- um as well. My mandate letter has not been amended. I still have the overall responsibility for expanding the mass timber file.

However, what the member might be referring to is that, to give an indication of how important this file is to us as a government, as we try to derive more value from less volume out of our forests to support workers and com- munities, my parliamentary secretary has had his mandate revised to include leading part of this initiative, which is a cross-ministry initiative with the new office of mass tim- ber implementation that’s established in the Ministry of Municipal Affairs and Housing.

As we covered in a previous answer, there has been a new assistant deputy minister appointed in that ministry, and my parliamentary secretary is working in a cross-min- istry setting with him in support of my mandate from the Premier. M. Stilwell:Well, thank you for that clarification, Min- ister. I appreciate it. I think what I really want to say is just that we know the forestry industry has experienced some unprecedented challenges over the last 18 months. The B.C. forest indus- try is facing declining markets, the mill closures. There have been strikes.

Though it would like to look at a restruc- ture, the current economy offers very little hope for the industry. It’s a crisis that really rivals what was experienced back in 2008, where many families, as well as the communities where those families live, are currently feeling extremely vulnerable. In fact, I think if we go back to almost a year ago, when we were in Vancouver meeting with the muni- cipalities of British Columbia at the UBCM annual con- vention, it was at that convention that any and all com- munities with any interest in the forestry industry were asking government to do something. 355

In addition to the elected officials that were there from local government from all around British Columbia, what we saw was 200 truck loggers driving their empty trucks through the streets of Vancouver, screaming for help from anyone who was willing to listen, hoping that this govern- ment would listen. At the time, the minister and the Premier and other proponents of this government spoke of having to endure this transition period. They stated that they would instead push plans to promote value-added forestry products such as mass timber technology. I repeat value-added forestry. That’s what the minister said.

I just want the minister to remember what he said and when he said it. I’ d just like to take a moment now to introduce you to the town of Qualicum Beach, which is in my riding. It’s located at the crossroads of the north-to-south Island Highway and the east-to-west Highway 4. It’s a community of about 9,000 people, the majority of them being seniors and retired folks. The community is truly a community of team players. They are always looking for ways to help out.

I certainly would know, because not only are they my constituents, but I’ve worked with them shoulder to shoulder as we built green shores, as we built green infrastructure, as we tackled single-use plastics and pioneered some social pro- curement programs to help those people who were facing barriers to work. As it happens, the town is also an active member of the Mount Arrowsmith Biosphere, the biosphere region, and they have been for over six years.

They have been in act- ive discussions with many, many great stakeholders with- in groups of the biosphere region, including the forestry industry. [1:40 p.m.] As it also happens, they saw that there was a way to help the industry while also helping the region by bringing fin- ancial sustainability to their little airport and its surround- ing airport lands. They went ahead, and they developed a business plan. They did the outreach that they needed to do, including outreach with the last government, the pre- vious B.C. Liberal government. They amended their offi- cial community plan.

After hearing from over 2,300 people in the community, they amended that community plan. They didn’t stop there. Following that, they found an investor, and they worked with that investor to bring them to Qualicum Beach. They did so by involving our Island- based forestry companies, including Mosaic, which actu- ally wrote a letter in support to bring that investor to the mid-Island. Mosaic endorsed the business wholeheartedly to be able to see that value-add right here on central Van- couver Island.

After all, the forestry industry knew that they needed to look at more value-add, so why wouldn’t they support a value-add lumber company that was looking to start a brand-new glulam manufacturing and timber techno- logy company and technology company? Makes sense, I think, right? Well, as you know, things change. We saw things change. We saw that as all this was moving forward, there was an election. The new NDP government got wind of this plan, and they sent a letter to the town of Qualicum Beach stating that they should stop what they’re doing at once.

The officials of the town of Qualicum Beach were told there was a new airport policy and that it had come into effect and that they must make an application to ensure that the airport’s business plan is compliant. They were also told that they must demonstrate that there’s finan- cial need by the town in order to satisfy that this busi- ness, as well as the two other projects they were working on, could advance. The town complied, and they made an application to the minister’s ministry, FLNRO. They demonstrated the fin- ancial need.

The small airport loses roughly $300,000 per year, once all revenues and expenses are accounted for. So opportunities to grow revenue are vitally important for the town and for the taxpayers. Further to that, they sent out a request to meet with the minister because they knew that this was timely and it was vital to the economy, not only for the town and the region but the Island and the province. But to everyone’s surprise, the meeting was denied. It didn’t stop there. It only got worse, because the gov- ernment was watching communities suffer.

Forestry work- ers and their families were crying out for help, and this government stood at UBCM to the sound of those truck loggers rushing the streets of Vancouver in desperation. This government stood and told the people of B.C. that they would need to endure this transition period, and then they stated that they would push plans to promote those value-added forest products and the mass timber techno- logy. But basically it appears it was lip service to those fam- ilies that depend on forestry. The government denied the application made by Quali- cum Beach.

They denied the value-add forestry company that was supported by the forestry companies of Vancou- ver Island. The town was specifically looking at oppor- tunities at the airport. The three businesses were ready and willing to invest millions and create jobs on the land operated by the town, with the blessing of both the pre- vious and the present council. It’s under the management and the zoning and governance itself, but to which the province holds title. To date, the value-added forestry opportunity remains unapproved. Discussions started back, like I said, with the previous government.

Again, we were supportive. But it was on September 25 that the FLNROD staff indicated at the UBCM meeting to the town that all aspects of the application were rejected — the search and rescue, the electric vehicle courier service and the glulam factory. 356 Committee of Supply,

Section A Friday, July 31, 2020

They were told it was a cabinet decision. Can the minister tell me on what date did cabinet make this decision? [1:45 p.m. - 1:50 p.m.] Hon. D. Donaldson:As the member has outlined, the proposals involve multiple ideas around the use of this land. The land in question that was being proposed for this commercial development is Crown land that’s allocated for the purposes of airport use.

Our ministry is aware of the proposal and has provided a number of options to the proponents, including the sug- gestion that they can request that the land they need for the various commercial activities that they’re proposing be split off and be considered for a commercial property, removed from the Crown land base and provided at mar- ket price to the proponents. That’s one option they can pursue. This is, obviously…. We’ve got a number of moving parts to it. The member said the glulam factory idea, search and rescue and…. I missed the other one. It had to do with electric vehicles, I believe.

Our staff is willing to meet with her to discuss our processes about how we con- sidered the request. As I said, this is land that is not designated for these kinds of commercial purposes, and obviously, these kinds of land applications have to fit within what the permitted activities are for that. Happy to set up a meeting with staff to go through the process that we’ve embarked on with the proponents and to outline the options that were in laid in front of the proponents around how they could potentially acquire the Crown land that they were looking for in that area.

As far as forestry in general, the member had a number of comments around that. I do recall very well the truck rally at the UBCM last September. We met with the leaders of that rally. I met with people who participated in the rally out on the street as well. The majority of those people were providing concerns from the Interior. I’m happy to report that many of the mill curtailments — almost all of them now that were temporary — are now pulled off in the Interior.

People are back working in those mills, and con- tractors are harvesting the timber from the forest. [1:55 p.m.] For these workers in the Interior who were impacted by mill closures, well, we have the $69 million Interior forest worker support program. That’s available, and it’s being used. Also, within that program, the training and the offices to assist with job placement are available to workers on the coast who are experiencing job loss from mill clos- ures.

I’m also happy to report that on the coast, because of our efforts, the labour dispute between Western Forest Products and the United Steelworkers is now resolved — the issue with Mosaic — and has led them to return to activities, putting a lot of people back to work in the forestry sector. There are great market prices right now. The demand is high, and industry is happy to run as full out as they can to support communities and people that depend on forestry jobs. M. Stilwell:To the minister, just so I can clarify for him, it was, in fact, an electric vehicle courier service.

I’ll inform him that they’ve already left and gone to another com- munity because the minister didn’t get his act together and approve the opportunity for Qualicum Beach. The town of Qualicum Beach made repeated requests about all the businesses, but especially the glulam business opportunity, because it’s in his mandate letter. The min- istry is the only ministry that needs to sign a variance under the airport policy. There’s no process for applying other than that the ADM can simply sign off.

Section 7.1.3 states: “Where an applicant proposes ancillary uses in addition to those listed in appendix 2 — e.g., additional revenue-generating commercial uses — land authorization staff, in consultation with the regional executive director, will prepare and submit the pro- posal, together with the recommendation and all relevant docu- mentation, to the regional ADM for review. “Documentation is to include comments received from the pro- posed ancillary uses from referral agencies.

Ancillary land uses not included in the appendix may require a tenure under a different operational land use policy — commercial, general. ” Y ou can see the Crown grant lease needs a variance. The policy even says that if it has additional revenue genera- tion, that’s great. The ADM can simply sign off the vari- ance saying that it’s good. But FOI requests show that it never went that far. Basically, the town has been given the runaround. I sure would like to know what discussions were hap- pening behind the scenes. Even after being denied, the town asked what would be accepted or approved under the variance

section 7.1.3, and they were told: “Nothing. Noth- ing would be approved. ” So why even have a variance pro- cess with no formal application and no way of ever being approved? Given the fact that B.C. is experiencing these unpre- cedented economic damages and deficits in 2020 and giv- en….

The Premier has specifically tasked the minister with doing everything your government can to, again, “expand the innovative wood products sector by addressing regu- latory and capital barriers hampering the growth of engin- eered wood production. ” Given that you are specifically responsible for economic development on government lands, including those leased or otherwise granted to other levels of government; including the regional districts, the towns, the cities….

If the Premier has asked FLNRO to address regulatory bar- riers, why has the minister created a regulatory barrier that is blocking value-added forestry coming to Qualicum Beach? Tell the House. Tell the people of Qualicum Beach — the town staff, the council of Qualicum Beach — why your department has slow-walked or deliberately killed Friday, July 31, 2020 Committee of Supply,

Section A 357

three potential economic projects at the town of Qualic- um Beach. [2:00 p.m.] The Chair:For the benefit of the public watching, this is the opportunity for opposition members to ask the min- ister questions on the 2020 budget, and the Minister of Forests, Lands and Natural Resource Operations is now conferring with his staff team to develop an answer for the member. Hon. D. Donaldson:Well, just to be frank, Member, talking about getting acts together…. The member seems to know the file well, and she could have done her job and come to me with this issue. She knows that my door is always open.

It’s an absolute mis- characterization and an unfair assertion that this proposal was slow-walked or deliberately killed. My door is always open. This is the first time the mem- ber has ever spoken to me about the issue. Now that she has taken this opportunity…. Even though she says she’s been aware of the issue for at least a year, and before that when she was in government, it’s too bad she never made that information available to me in a personal discussion. She knows that my style is to always have time for oppo- sition members who have got concerns and development proposals in their constituency.

I’ve dealt with many of her colleagues on this same kind of basis and tried to help their proposals get answers through the system. [2:05 p.m.] Once again, this is a Crown land topic. There’s availab- ility if the proponents want to discuss their business plan around a potential glulam facility. My deputy minister is always open to reviewing business plans to help under- stand the viability. Of course, that viability would be asso- ciated with acquiring land. The Crown land policy is to have Crown land made available on a commercial basis. As I said, there have been a few options put forward.

If the minister wants to ensure that the proponents can dis- cuss their business plan with the deputy minister, who has an economic background as well as a forestry background, we’ d be happy to arrange that. We’re always looking for opportunities to advance these kinds of projects where we can within government. We’ve covered the engineered wood question earlier in estimates debates. The emphasis that we’re doing as far as training, research, ensuring that there is fibre availability for these private proposals and ensuring that the market is there….

We’re not just showcasing the market within pub- lic infrastructure but ensuring that we are at the lead of advancing the private market capital projects, as well, by amending — the first in Canada to amend — the tall build- ing codes so that more developers can take advantage of building with mass timber. Again, the door is always open, offering up to the pro- ponents to bring their business plan to our deputy minis- ter. M. Stilwell:I’m going to wholeheartedly disagree with his comments about not coming to him.

Quite honestly, there were many letters, meetings, requests for meetings to you, both by correspondence and in person, for months. In fact, at the UBCM last year, the CEO from the town spoke to you directly, shook your hand, talked to you, and you gave him the brush-off. To say that it hasn’t been brought to your attention or to your staff ’s attention is simply untrue. Y ou need to cor- rect that for the record. In fact, for me to come to you and interfere with a process would be inappropriate. I will take the minister up on his offer to meet directly with him, with the town.

He can bring his staff if he would like. I appreciate the time that he’s given today to bring attention to this matter. I fully expect to have those con- tacts made within the next week because it is a timely matter. It is of utmost importance for the town; for jobs; for the families that rely on revenues; for the taxpayers of Qualicum Beach, who would love to see industry brought to reduce their taxes or at least not have the airport run- ning at a deficit. I look forward to confirming that time. If the minister would like to email me with his cell phone number, next time I will make sure to go directly to him.

The Chair: Minister, do you want to provide any response to that? I didn’t really hear a question in it. Minister, do you want the opportunity to reply, or shall I go to the next questioner? Hon. D. Donaldson:Thank you to the member. I look forward to getting together when we can arrange our schedules. I’m ready for the questions. J. Rustad:Just a scheduling change that I wanted staff to be aware of. Due to other circumstances, the Green Party members have informed me that they will not be able to participate in estimates today, so that will be moved to Monday. We will go through stuff here.

We may add a few other little changes as the day goes on, but I just wanted to make you and your staff aware of that. [2:10 p.m.] I want to move on, if I can, to talk about coastal forest operations. In particular, the minister and his govern- ment’s policy has been to try to utilize every bit of timber they can, locally. I don’t see an issue with that. We want to see that, obviously, as some companies log to help cover their expenses. They look at log exports as a necessary part of the cost structure. I think the minister recognizes that some log exports play a role in our forest sector.

Recently Mosaic had a request in to the federal govern- ment and to the provincial government with regards to its 358 Committee of Supply,

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restart and its desire for the ability to have some flexibil- ity on exports. I’m happy that Mosaic is now up and run- ning. Obviously, there were some issues that they worked through associated with that. Perhaps the minister could detail what he’s currently doing and what he’s planning to do, if anything, with regards to exports of logs, both off of Crown land as well as the component that the province plays a role in associated with exports off the privately managed forest lands. Hon. D. Donaldson:Thank you for the question.

Moving into the coast forest sector revitalization, yes, it was a good day when Mosaic decided to return to har- vesting because they felt it was economically viable and feasible. Of course, the majority of that is on private forest lands. We definitely kept close watch and encouraged both Mosaic and other players Mosaic was dealing with to get back to harvesting. As far as the focus on the part of the question the mem- ber posed on export of logs off private lands, of course that’s in the venue of the federal government. I did have a call with the federal Minister of Trade, Mary Ng, back, I believe, in February.

She made it quite clear through her interactions and advice from the federal Attorney Gener- al’s office that they wouldn’t be amending their export reg- ulations. [2:15 p.m.] As I said, that’s the federal government purview over export of private forest lands. As far as public lands are concerned, yes, we are interested in driving more logs har- vested off public lands to domestic facilities, first and fore- most to benefit the communities and workers who depend on that wood supply for jobs. One of the tools we were using to implement that policy was adjusting the fee-in-lieu charge.

In other words, the fee in lieu, the charge that’s in place for recouping revenue from logs that are exported back into B.C. directly…. We changed that to an economic-based fee in lieu, depending on where the log is harvested and the economics of it. That policy change was implemented for B.C. Timber Sales of July 1 last year. We intended to collect data. It’s always important to know if the intended consequences, or the outcomes, are what are intended from these kinds of policy changes.

As that was implemented, then we ended up in a down market and then a strike situation — actually, the strike situation first — so we weren’t able to collect enough data to implement it by December of 2019 for the remainder of the licensees on Vancouver Island. Then when the strike was resolved, we ended up in the COVID situation. Now that the industry is back on its feet, we’re back on track to establish the economic-based fee in lieu December 15 of this year for timber harvesting on public lands and on the coast. J. Rustad:I’m curious.

The minister mentioned having a conversation with his counterpart in Ottawa about the Mosaic situation. Has the minister had an opportunity to talk to the federal government at that time or other times associated with trade, the desire, of course, for expanding trade and meeting trade commitments? To be clear, I am talking about trade commitments asso- ciated with forestry and the minister’s file. I wanted to be sure that he didn’t take that off in another direction. The Chair:That will make it a slightly shorter answer. Hon. D. Donaldson:Well, I mentioned the discussion I had with the federal Minister of Trade.

That was just in February. In the intervening months and before that, our senior staff was consistently in touch with federal trade senior staff to advance our interests and concerns and also to ensure that we’re consistent with all our trade obliga- tions and agreements, which we are. I also have had regular calls with the federal Natural Resources Canada Minister, Seamus O’Regan, who is my direct counterpart in the federal cabinet. We discuss trade topics, especially the softwood lumber disagreement, regularly during those discussions. [2:20 p.m.] J.

Rustad: Japan is raising some significant concerns over Canada’s apparent miss of the side letter agreement to the TPP , the Trans-Pacific Partnership agreement. That’s threatening, obviously, lumber and plywood exports that come from British Columbia to Japan as possible counter- vailing charges, depending on how that plays out. I’m curious as to the role the minister and the ministry’s office is playing with Canada to meet those obligations for that side letter and for the Trans-Pacific Partnership agree- ment.

Or is he leaving it, basically, to the federal govern- ment to try to resolve — which, of course, puts at risk B.C. lumber and plywood exports to Japan, should Japan decide to take trade actions against Canada? Hon. D. Donaldson:Y es, we’re very attuned to this issue. As the member likely knows, it was a feature of an

article in theGlobe and Mail yesterday, as promoted by Mosaic. We are keeping a very close eye and not leaving it to Canada, although Canada is our point of contact interna- tionally, because Japan is a valued customer for B.C. forest products. The member is correct in that. They’re our third- largest market for forest products. So any kind of hint of trade issues is something that we keep a close eye on. We’re confident that we’re compliant with the obliga- tions under the CPTPP . We’re in constant contact with Ottawa. We’re not leaving it to them.

As a matter of fact, as recently as yesterday, where federal Trade Minister Ng had a telephone call with her counterpart in the Japanese gov- ernment, Japan did not raise this issue. Friday, July 31, 2020 Committee of Supply,

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[2:25 p.m.] As I said, we’re keeping close tabs on this. We’re ensur- ing that Canada knows our position, that Canada under- stands and is promoting that we are compliant with our obligations under the CPTPP . J. Rustad:As you can imagine, with the unpredictability of China these days and the situation we have there with the softwood lumber and the challenges south of the bor- der, with the potential risk in Japan, obviously that has sig- nificant potential ramifications for British Columbia and for the products we produce and sell. I’m glad that the minister is aware of the situation.

I’m still somewhat concerned, though, with regards to Canada actually meeting those obligations with regards to the exports to Japan. But I’ll have to take the minister at his word in saying that he doesn’t seem to think there is an issue there. Last year during estimates, particularly when we talked about coastal revitalization, I asked the minister specific- ally what performance measures the minister would be looking at or had put in place with regards to the imple- mentation of the coastal revitalization strategy.

Unfortu- nately, it became pretty clear the minister didn’t really have performance measures but said: “Well, I guess it would be jobs and utilization of logs, the reduction of logs. ” Maybe I’ll give the minister another opportunity, now that we’re another year in to the coastal revitalization, to provide some data with regards to any statistical changes that have happened over the last three years, and certainly over the period of time of coastal revitalization, in terms of fibre-utilization jobs and those components that he men- tioned or any other performance measures that may have since been put in place. [2:30 p.m.] Hon.

D. Donaldson:It’s important, first of all, to have an accurate timeline here. When we came into govern- ment in July of 2017, we realized there was a lot of work and focus needed on the coast forest sector. That’s when…. Shortly after that, we announced, in the fall, the coast forest sector revitalization initiative. That was very extens- ive with industry, with labour, with First Nations, with communities. We ended up finalizing and announcing that revitalization plan publicly in January of 2019. So it’s coming up to a two-year anniversary, but more like about a year and a half.

What’s happened since January 2019 is we had a drastic downturn in the market that resulted in curtailments and dire impacts on the coast. Then, once that seemed to be running its course and there was a bit of a turnaround on the horizon, it was followed by the strike on the coast in July of 2019. That came to a conclusion, a stable conclu- sion, in February of this year. All that to say that the measures that were initially being ruled out for coast forest sector revitalization were rolled out in stages, and one of them was around our fibre recov- ery zones, which were implemented on April 1, 2019.

That was one of the first initiatives. That was a zone where fibre that was economically viable to deliver to mills if it was left behind in the forests — there was more of a cost penalty to do that. And that was to try to encourage more fibre to come out of the forests. We worked with industry to try to refine the fibre recov- ery zones.

They were slow in providing us their economic data around areas to refine the fibre recovery zones, but we worked with them on that, and as a result, we stream- lined the fibre recovery zones, moving the boundaries and decreasing the areas by 21 percent once we got the data that we needed — the economic data. We’re still awaiting more data to help refine those zones, but that 21 percent decrease was put in place December 23 of last year. We’ve already covered a little bit, in the previous ques- tions, about the economic fee in lieu and how we imple- mented that with B.C. Timber Sales July 1, 2019.

Once again, that coincided with the labour disputes and Mosaic deciding not to curtail all their activities until the recent start-up. All that to say is that the data set to determine if those measures are fulfilling the intended consequences is not robust yet, and we’re still in the mode of collecting information off that. As I said, the fibre recovery zones have been refined, and we’re able to collect data off that. Again, the fibre wasn’t moving a lot because mills were closed and pulp mills were closed during the strike and the economic downturn. We’re keeping a close eye.

We will have some benchmarks. [2:35 p.m.] The goals remain, the five main goals of the coast forest sector revitalization being rebuilding solid wood in sec- ondary industries to ensure more of our logs are processed domestically; improving harvest performance to make sure more fibre is available to mills, including the pulp and paper sector; maintaining a credible auction system by taking steps to ensure bids on timber sales are independ- ently made; fostering stronger business-to-business rela- tionships between B.C.

Timber Sales, major licensees and First Nations — that work is well underway; and restor- ing public confidence through amendments to the Forest and Range Practices Act and auditing the private managed forest land regime. We’ve touched on the latter already in estimates debate. J. Rustad:What I’m hearing is policy around fee in lieu, which was implemented and then pulled back and adjus- ted, and a policy around fibre recovery zones, which was implemented and then pulled back and adjusted.

Did the ministry do any economic analysis and have any of that analysis available, potentially, publicly to be shared in advance of these policies, or were these policies basic- ally just “fly by the seat of the pants and adjust as we go”? Hon. D. Donaldson:I reject the narrative and the pre- 360 Committee of Supply,

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mise that this is a “fly by the seat of the pants” style of man- agement. It’s not. An economic analysis was conducted. Of course, the member might not like it, but the engage- ment was deep, thorough and long on the coast forest sec- tor revitalization process.

Sometimes the member and his colleagues ask for immediate action, and then they turn around and say: “We need more engagement. ” Well, in this case, we engaged thoroughly, especially with industry, on our plans and asked them and canvassed them for their ideas around how to revitalize the coast sector from the point of view that we’re all in this together. We expected some of the responses from industry to be self-serving. Obviously, each company has to look after their own bottom line, but we were also encouraging them to make suggestions that would benefit the whole of the sector, because this is the new world.

We have to under- stand that we’re all swimming in the same water. We got those responses. We did economic analysis on our fee in lieu, which is not pulled back. The economic- based fee in lieu is implemented with B.C. Timber Sales. The deferral is to other licensees. So our analysis of our fee-in-lieu policy was shared, the economics were shared with industry. The member is right. We’ve refined the fibre recovery zones based on data we’re getting. We requested, right away, economic information from companies that would allow us to be precise in our application of the fibre recovery zones.

That was requested in April 2019 at the COFI convention. As I already said, we had to wait a long time for industry to get back to us. In fact, it was until November 2019 that the data was forthcoming. We’re still waiting for further data, but we also engaged additional resources outside the ministry to help us model the fibre recovery zone. [2:40 p.m.] These aren’t indications of flying by the seat of our pants. These are serious economic initiatives and serious analysis. We understand that the implications need to be well thought out before we put these policies in place, and that’s what we’ve done. J.

Rustad:The Premier said at the Truck Loggers Con- vention in 2019 that he recognized there may be uninten- ded consequences. Well, it’s pretty clear, when the ministry went out and asked for input from industry…. That’s all fine and dandy. But the ministry didn’t use much of that input, if any, from industry. The fibre recovery zones — there were plenty of years’ worth of data that they could’ve used to have that refine- ment from the past. Instead, they implemented it and then looked for the data to say how much damage was done — oops. As the Premier said, unintended consequences to make the adjustment.

I’ll ask the minister again. Was there any economic ana- lysis done on the coastal revitalization strategy to put in place to determine what the additional costs would be to the primary forest sector? Hon. D. Donaldson:I’ d like to talk about this topic, because it is of great interest to me. [2:45 p.m.] When we became government, we heard loud and clear from communities all up and down the coast that they wanted the forests that surround their communities to, first and foremost, benefit the workers in the communities that they live in.

What they had been witnessing is an increase in waste left behind after timber-harvesting activ- ities. What they had been witnessing is an exponential increase in log exports under the previous government while mills were suffering for fibre. And what they had wit- nessed is a concentration in the industry under the previ- ous government that led to a lack of fibre for those wanting to diversify. The communities made it loud and clear that they wanted the forest resource to work for them. One of our primary focuses was on reducing the amount of waste in the forest.

There weren’t unintended consequences from that. We monitored that, and we wanted more waste to be brought out and used to support jobs for people and jobs in communities. The coast forest sector revitalization process unfolded. We presented it to industry, labour and First Nations in June of 2018. We wanted to reduce waste. We had some plans on that, and we wanted a response. We gave industry a chance to respond, and we met again with them in September of 2018. We had nothing meaningful or robust from them on suggestions about how waste could be reduced.

That really is something that irritates people in forest-dependent communities, so we came up with a system to incent the removal of waste through fibre recovery zones. As it came out, we also at the same time worked with industry in response to their desire to have a lumber-based stumpage model in the coastal system, which we talked about earlier in questions this morning. We worked on that and were able to bring that in for December of 2019. The objective is to address those fundamentals in the coast forest sector of ensuring that more fibre is available, less waste is left behind.

Much of that is because the model that industry has become used to is overdependence on log export, and that skews the entire system and results in more waste being left behind. We understand that a cer- tain amount of logs need to be exported to make the sys- tem economic, but what we have seen evolve is an overre- liance and overdependence on that model, and that does not benefit communities. It does not benefit workers. And we’re working with industry to change that model. J. Rustad:Maybe the minister could just save time by saying no.

I get all the rhetoric and things he needs to add, but clearly, obviously, there was no economic analysis Friday, July 31, 2020 Committee of Supply,

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done, no impact analysis in terms of the cost structure with the coastal forest industry for the implementation of coastal revitalization. That’s why we’ve seen the adjust- ments as it’s gone, because, clearly, that analysis wasn’t done, and therefore it wasn’t a well-thought-out plan. I’m moving on as well now. I want to add in the Man- ufactured Forest Products Regulation, which the ministry introduced by an OIC. Surprised everybody, all the small producers that he was trying to support as well as the large producers.

Everybody seemed to be opposed to the plan, even the one sector which provided him with some sup- port quotes. His members particularly had a revolt against him for doing that because of the damage that was being done. And then what do we see? No analysis being done with the policy, just a policy brought forward. And the policy had to be shelved and kicked back for a period of time until this fall. [2:50 p.m.] It’s a pattern that we are seeing with the way that this ministry is being run and one of the reasons why the forest sector in British Columbia is facing so many chal- lenges and uncertainty.

So with regard to the Manufac- tured Wood Products Regulation, I’ve got a few questions that I want to just touch on. In particular, when I look at what the intention is, is this just targeted against the United States, export products to the United States? Or are other countries also included — how this is being implemented? I guess the question to the minister associated with that, as well, is: does the minister think that’s fair? Hon. D. Donaldson:I’ll try to be more direct in my answers if the member can cut down on his

preamble to his questions. Obviously, if the

preamble includes inac- curacies, I have to ensure the record is corrected on that. In that regard, we do modelling. We did modelling. When the member says we did no economic analysis…. We do modelling. We did it for the fee-in-lieu changes. We did it for the waste changes. We did it for the fibre recovery zone changes. We did it for the lumber-based stumpage changes. All in connection to the coast forest sector revitalization initiative. [2:55 p.m.] Admittedly, the analysis, the modelling, is only as good as the data that we have. In some cases, we have good data.

In some cases, we rely on industry to provide us with that data. As I outlined, when they don’t do that, we imple- ment with what we have and then refine as they become more forthcoming with their data. Any kind of changes or delays to our implementation

schedule or to refinement of these policies has been in response to market conditions. Of course, we’re very attuned to that and the market condi- tions that impact industry, so any of the changes that have occurred have been in response to that. As far as the manufactured forest products, act amend- ments, we’ve been in discussion with the industry since 2017 on those, so no surprises that we were contemplating the changes. The regulation addresses specifically the level of manufacturing required in the province, which is some- thing we have control over.

That regulation will be in place September 30, but not where that product goes to. We have no jurisdiction over where a forest manufacturer will send that product to. We control what we can control, which is the level of manufacturing required in the province before that product is exported. We have had consultation with many of the groups that the member referenced and in connec- tion with that. That’s why we delayed — because of market conditions — the implementation until September 30. But the requirement…. The question was: is this targeting, specifically, exports to specific countries?

No, the level of manufacturing required in the province is something we can set. Where that product actually goes is up to the marketing branches of the various companies. J. Rustad:I’ll try to give some quick questions associ- ated with this. First part of the question. It was brought in, in Janu- ary. The implementation was delayed now. I just heard the minister say it’s going to come in September. First part about that is: will there be changes to the policy that was brought in between when it was introduced and what will be implemented? That’s the first piece that I’m curious about. The second is….

The ministry’s website talks about exemptions. Could the minister explain exactly how that will be done — that component of exemptions? The Chair:Members, I’m going to take this opportunity for a brief recess. We’ll come back to work in five minutes. The committee recessed from 2:58 p.m. to 3:05 p.m. [S. Malcolmson in the chair.] Hon. D. Donaldson:To the questions that the member posed, I think he’ll be pleased because the answer will be succinct. There are no further changes being contemplated before the September 30 implementation date.

As far as exemptions go, forest product under the act that does not meet the specifications, I will require an exemption to not require additional fees applied for that export. We have a consultant who is working with industry on the topic of exemptions and gathering their input. We’re working on recommendations based on that feed- back. We’re going back to industry with those recom- mendations to discuss them in the near future. J. Rustad:Just to be clear, there were no changes to this policy from the original OIC through to what will be implemented in September?

I hopefully have that cor- 362 Committee of Supply,

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rect in terms of what the minister just said. Although it does raise an interesting question, in particular as part of the June update. Interior cedar was removed from the tax, and that is now only applied to the coast. This created, of course, the two systems in British Columbia. I’m just curious as to why they would give an unlevel playing field to the two. I’m not saying, necessarily, that that shouldn’t have happened. I’m just curious as to the logic that the minister may bring in. And also, whether the minister wishes to clarify his statement about there being no changes. [3:10 p.m.] Hon. D.

Donaldson:Thank you to the member for the opportunity to clarify. I thought his question was: are there any changes contemplated between now and when the amendments will be put in place on September 30? The answer to that was no. There were changes between when the OIC was introduced in January and when amend- ments were made to that OIC this summer. The changes were associated with the amendments to the Manufactured Forest Products Regulation applying to the coast sector.

The reason for that was that through our analysis of the fibre availability and the secondary manu- facturers’ in the Interior, the supply and the demand for, primarily, western red cedar was in balance,

whereas on the coast, the secondary manufacturers’ demand and the supply to them was out of balance. In other words, the sec- ondary manufacturers were having a hard time finding red cedar and cypress at the same time as these products were being shipped out in a very raw state. This is intended to address that imbalance on the coast, which will result in support for companies and families investing in B.C. and for workers, jobs and communities. J. Rustad: Not going into too many of the details. Clearly, many of the small manufacturers had expressed concern about this.

The minister has a liaison who’s work- ing with them, particularly, if I heard that correctly, on the exemption component. Are there any rules or discussion around what would be considered an exemption and how that would be implemented? I’m curious how the concerns of the small manufac- turers were addressed. Obviously, that brought forward…. Quite frankly, the larger manufacturers as well. How will that component work? Then if the minister could clarify the rationale for this manufacturing regulation being for certain species and not for all species. If I may, I might as well add one more question to it.

Hopefully, it gives the minister only one opportunity to do a

preamble when he gets to answering the questions, as opposed to three. Has this gone through a softwood lum- ber lens, in terms of any potential impact or concerns that the Americans may have brought forward? [3:15 p.m.] Hon. D. Donaldson:I will deal with the three questions expeditiously and in reverse order. The topic around the changes to the Manufactured Forest Products Regulation. We have done analysis, like we do with any policy change, using an SLA lens, a soft- wood lumber agreement lens, on policy changes as one of the numerous lenses we use.

We’ve consulted with our leg- al representatives in the U.S. on this, and we’ve come to the conclusion that there are no significant concerns around risks to the softwood lumber disagreement. The second question was around the species that are captured. Y es. There are two aspects of the amendments. One is the aspect around the requirement and changing what is considered a fully manufactured product. That one applies specifically to western red cedar and cypress. It was a specific issue on the coast, which I already addressed.

However, another aspect of the amendments is the max- imum cross-section area of timber to be considered man- ufactured and, therefore, qualified to be exported without penalty. That has changed for all species, interior and coast, and reduced from 0.2 square metres, which is roughly a 17-by-17-inch diameter, to 0.1 square metres, which is roughly a 12-by-12-inch diameter. That applies to all species, interior and coast, and a full manufacturing aspect applies to western red cedar and cypress. The first question around exemptions.

Again, this is anything that does not meet the specifications that I just outlined but a manufacturer still wants to be exported without penalty. There is the ability to pursue an exemp- tion from those penalties. [3:20 p.m.] I already outlined the process. We have, as the member called it, a liaison, but we were calling a consultant work- ing with industry. We’re working with recommendations that have come back with industry, and we’ll go back to the industry in the near future. Those exemptions would be on a case-by-case basis. J. Rustad:That leads me to another question on the exemptions, unfortunately.

On a case-by-case basis…. Can anybody apply for an exemption? Are there some specific requirements that would lead to the potential for an exemption? How will that exemption be adjudicated? And one other question associated with the consultant that’s connected. I’m just curious what the cost structure or the pay structure is for the consultant, if it was a one-off contract or hourly and what the rate was. Hon. D. Donaldson: I’m happy to supply specific answers. The question was: can anyone apply for exemp- tions? What are the criteria? How is it adjudicated? Examples of the criteria that would be applied….

Is the product being consumed or used surplus to the needs of the domestic industry? In other words, the raw material that’s being created into a product that doesn’t qualify for an exemption being exported — is that raw material sur- Friday, July 31, 2020 Committee of Supply,

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plus to the needs of the domestic industry? Is it uneco- nomic to process the product domestically? Does the product increase utilization and, therefore, decrease waste in the forest? Those are samples of the criteria. As far as who can apply, any manufacturer can make application for the exemption. How is it adjudicated? Well, that’s a delegated statutory decision-making authority under the regional executive director or the director of trade and export policy. [3:25 p.m.] How they make the application is what’s being worked out right now between industry and ourselves.

The person we’ve engaged to conduct those activities with industry is…. I guess you would typify it, in the member’s words, as a one-off, as it’s an hourly rate. We can get you that hourly rate. It’s just not at our fingertips right now, but I can read it into the record when we get it. J. Rustad:Y eah. If you could get me that for later today or for Monday the tenth, that would be helpful to know. I want to just touch on one other piece on this.

That is: as this will be a tax, a fee — whichever word the minis- ter would like to use to describe it — what is the estim- ated revenue that the ministry has for the implementation of this tax for the remainder of this fiscal year and projec- tions going into next fiscal year? Hon. D. Donaldson:To answer the member’s ques- tions, this is a fee in lieu of manufacturing. It’s to recognize that the publicly held asset, the forests of B.C., if exported in a form that’s not fully manufactured, means that work- ers in communities are not fully benefiting from that pub- licly held resource.

So it’s not a tax; it’s a fee in lieu of man- ufacture. As far as what that fee in lieu will be, we are working with industry, with groups like the Western Red Cedar Lumber Association, with major licensees like Western Forest Products, Teal-Jones, as well as smaller compan- ies — the list is long — to establish that. It’s not yet estab- lished, but staff will be bringing recommendations to me soon. J.

Rustad:Here we have another policy that was brought in, in January, that had to see immediate changes pulled back and that hasn’t got the analysis done in terms of the impact on industry — the cost structure and what the rev- enue will be.C’ est la vie. [3:30 p.m.] I will move on to talk about log exports in particular. We had the fee in lieu of manufacturing that has been imple- mented. Originally, it was going to be implemented for the entire sector. The rest of the sectors pulled back. It was implemented for B.C.

Timber Sales only — with analysis being done, if I remember correctly from what the minis- ter has said, and that to be implemented at some point here later this fiscal year. I know the government’s goal has been to reduce or eliminate log exports, but clearly there are, for B.C. Timber Sales, still exports that need to go on for some of the sales. I’m curious as to whether the minister had looked at the idea of no log exports being allowed for the volume that is under control of the ministry through B.C. Timber Sales. Hon. D.

Donaldson:Just to re-emphasize, any policy deferrals that we have made are due to market conditions. If the member is advocating for immediate implementa- tion of policies regardless of sensitivity for market condi- tions, then he should say so. We are sensitive to the market conditions. When we introduce policies, we’ve done the analysis, and we want to make sure that we’re taking into consideration the eco- nomics for industry. As far as the fee in lieu, the question around B.C. Timber Sales, yes, it was the economic-based fee in lieu that was implemented July 2019.

The question from the member was: did we consider that there should be — I suppose it’s not his words, but he said — no log exports under BCTS? The member knows that the market price system that B.C. Timber Sales was created to support requires 20 percent volume around the entire province in order to be rigorous and valid. That’s been supported in our legal wins under the softwood lumber agreements in the past, and to not allow the log export portion under B.C.

Tim- ber Sales would invalidate that system and undermine it — the market pricing system that looks at the open mar- ket value for log prices — and would render it relatively useless in terms of our legal applications under the soft- wood lumber agreement. What we want to do with the wood harvested under BCTS is to try to align it — it’s called symmetry — with major licensees so that we have a valid log price under our market system. J. Rustad:That’s a curious way to look at the export issue. Once again, policy comes in and then suddenly: “Oops. Conditions have changed.

I guess we didn’t think through a policy in terms of what it was. So we’re pulling back and making adjustments. ” I guess, once again, as the Premier said, they’re recognizing that there are uninten- ded consequences of policy approaches. [3:35 p.m.] I also find it curious that the minister recognizes that there need to be log exports through B.C. Timber Sales that match up with log exports on the private side, or on the other tenure side, to be able to validate the market pricing system.

Y et all of the rhetoric by the Premier and the party and the minister about wanting to eliminate log exports would seem to fly in the face of the statement that the minister had just said. But that being the case, politics is politics, I suppose, as opposed to the reality of governing and making decisions. 364 Committee of Supply,

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I’m curious with regards to B.C. Timber Sales and the new fee in lieu that came in place. What has the impact been so far on the bidding that has gone forward on B.C. Timber Sales? I’ve heard reports, not so much of late — obviously, there’s a lot of interest of late — over the last year, year and a half, of many of B.C. Timber Sales blocks going no bid before the implementation of the new fee in lieu as well as afterwards. I’m curious what the analysis is associated with the impacts of the new fee in lieu on B.C. Timber Sales. [3:40 p.m.] Hon. D. Donaldson:Y es, we got some good informa- tion.

In response to the member’s questions, for sales since January of this year on the coast, under BCTS, there have been only three no bids in the sales. The member was interested in the impact on…. When the fee in lieu was implemented originally, which began in July of 2019, on BCTS sales on the coast, that also coin- cided with not just the strike but then, also, the collapse in the Chinese market. What we were able to surmise is that there were no bids on sales that had the maximum fee in lieu. We had examples of no bids on that. We also had examples of no bids on sales where there was the min- imum fee in lieu.

So there wasn’t the direct correlation between no bids and the variable fee in lieu. However, that was a pretty small sample size, because not a lot was going on in the harvesting sector because of the outside events I just described. Importantly, since the market has recovered and since the coast sector has recovered, with the fee in lieu in place, there have only been three no bids this year. J. Rustad:The no-bid issue, of course, has been a prom- inent issue for a number of years now.

In terms of the fee-in-lieu structure, when it was first brought in, first suggested and brought in, of course, the folks on the north coast got pretty excited, both from a manufacturing side and, more especially, from the folks that are logging for export up in the north coast, given that there isn’t a lot of domestic market opportunity up in the north coast. Many of those are connected with First Nations or are First Nations that are concerned about that. What has the impact of new fee in lieu been on the one component of forestry that is still pretty vital up there, which is the logging component?

How has it changed exports from the north coast side of the market? Has the minister seen a drop-off in the volume being harvested in the northwest component of British Columbia? Hon. D. Donaldson:Just a point of clarification. Is the member asking us to provide that kind of information for the north coast? Or what is also captured in coastal log- ging, the areas in the northwest coastal interior as well? J. Rustad:Really, from the Hazelton area out through to the coast, so that northwest interior component, as well, doesn’t feed into the domestic or the interior market in Smithers east? [3:45 p.m.] Hon. D.

Donaldson:Of course, the export market has declined because of the impacts of COVID, especially in Asian markets. So I guess, generally overall, we could say that the volume intended for export is down in the north- west interior, as the member was asking about, regardless of the new variable fee in lieu. However, it’s important to note that the variable fee in lieu does not apply to large volumes in the northwest that are under orders-in-council for exemption from that vari- able fee in lieu.

The fee-in-lieu charge for those areas under the OICs after we looked at an economic analysis to deter- mine the percentage of harvest in each of those areas that is not economic to process domestically, which I think was the point the member is getting at, is $1 per cubic metre. J. Rustad:That’s right. I was confusing the order-in- council changes that had some requirements in terms of the amount of volume to be exported through that. I’ d love to go into that in some more detail, but I do want to move on to other topics. I recognize we’re not going to get as much time as I would like.

Just one last thing to touch on, though, on the north coast harvesting. During 2019, companies were coming to me and saying it was impossible to get a cutting permit on Haida Gwaii, to be able to move forward with any kind of harvesting on Haida Gwaii through that. I’m curious as to whether or not the ministry has resolved that problem, or whether there are still no per- mits or limited permits and very limited forestry activity on Haida Gwaii. [3:50 p.m.] Hon. D.

Donaldson:I visited Haida Gwaii in June of 2018 and became very aware of the various concerns and issues around forestry and forestry management — and cutting permits, specifically, as the member has raised. We have engaged with the solutions table, which is a formal table on Haida Gwaii, along with local industry and BCTS to address the cutting permit issues. We engaged directly with the Council of the Haida Nation, and the Ministry of Indigenous Relations and Reconciliation was also involved in that.

I’m happy to report there have been some changes as a result of those discussions with the Haida and some pos- itive outcomes. There have been cutting permits advanced in the last few months, and things have gotten much better. Also, there’s been some very good relationship-building between the Haida and B.C. Timber Sales, and a couple of specific cutting permits that have been a source of conten- tion are being resolved. Friday, July 31, 2020 Committee of Supply,

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[3:55 p.m.] I would say our focus to address the topics that the member said he was made aware of in 2019 have been suc- cessful as far as seeing more cutting permits being issued. J. Rustad:Just curious. When you look at the various issues…. There have been, around on the coast, the changes to the regs, the other components that have been brought in place. What is the ministry anticipating for the annual allowable cut on the coast for this year? And the levels anticipated to be for next year? Hon. D. Donaldson:The annual allowable cut for the coast this year is 15,513,411 cubic metres.

Then the mem- ber asked about next year. Of course that would be dependent on, for instance, how many timber supply reviews are ongoing and the multitude of TSAs and TFLs that comprise the coast. But that’s the number for this year. In general, it doesn’t vary a great degree year to year. But it’s dependent on the chief forester’s analysis through tim- ber supply revision. Of course, in the Interior, that has cre- ated a fluctuation as those numbers come in from the tim- ber supply review to reflect a sustainable level of cut. J. Rustad:Moving into the Interior, I want to start off, actually….

The Interior revitalization work that went on in the previous year, I think that the minister had promised that there’ d be a what-we-heard document out by Decem- ber. Then it was delayed further and said to come out in the spring. And then it was, I believe, released on the min- istry website in early July of this year. It contained some interesting information, particu- larly what some of the top topics are. I found that inter- esting, those topics being highlighted through the what- we-heard report. [4:00 p.m.] Can the minister just confirm the process now going forward fromWhat We Heard versus…?

My understand- ing is you’re going out, doing another round of consulta- tion aroundWhat We Heard. That will lead to some recommendations, which then will lead to government actions. Is that how the government sees that unfolding and over what time frame? Hon. D. Donaldson:Y es, we’re pretty enthusiastic about the work that was done under the Interior forest sector renewal process. We had 36 community engagement ses- sions. Actually, I believe the member and I were at one, coincidently, in Vanderhoof. I think he was there, anyway. I know I was there just because I’ d been up in Fort St.

James, and it was a nearby one to visit. Over 500 online survey forms were completed, 92 writ- ten submissions. It’s important to note that this public engagement process was, part and parcel, just one aspect of the Interior renewal process. There were also the TSA coalition processes that were encouraged by a letter from the Premier to COFI in March of 2019, I believe it was, and two of those are well underway. [4:05 p.m.] The what-we-heard document was put up. We had intended to release it in the spring.

In fact, we thought it made more sense to release it at the same time as the COFI convention this year rather than releasing it in December, when a lot of people wouldn’t necessarily be paying atten- tion, with the holidays and everything. The COFI convention gave us a good launching plat- form for releasing it in the spring. Then with the COVID sensitivities, it was really not the most appropriate time to do that, because we wanted to ensure that people were focused on their personal health and safety and not on a what-we-heard document. So the member is right. It was released in early July.

I believe that’s correct. Then the member asked about the process from here. We’ve been not only putting together the what-we-heard document but analyzing the responses that we got and putting it into the context of what we’ve already done and are already embarked on in the Interior renewal process. Y ou might recall that the response forms were organ- ized under certain themes. We definitely have been act- ing on some of the feedback and what we heard around mass timber, around cost drivers. Those processes are already underway. Mid-term policies were part of the feedback that we got.

Mid-term timber supply policies are something that we’re looking forward to hearing about from the TSA coalition processes that are ongoing right now in the Kootenays as well as the one in the Mackenzie TSA. We have reviewed the what-we-heard. We’re imple- menting some of the recommendations already, and fur- ther actions will be informed by the TSA process. Staff are working on further directions — they’ll be bringing that to me shortly — that we can go back out and talk to industry and other interested parties.

However, it should be emphasized that we are already actioning items that have arisen as concerns in the what-we-heard document. J. Rustad:I don’t know if I really heard the answer to the question I had. Let’s see if I can clarify it a little bit for my own thinking, and the minister can correct. There isn’t a go out, a second round of consultation from the what-we-heard. There is a variable process. There’ll be some things that will go out for consultation. There’s some other input that’ll come in, and there are some things that were actioned, are already happening or will be happening.

It’s a little confusing to the people, I suppose, that are reading the document and wondering about the time frame and what comes next, but I guess that is the intent of the process at the moment. I want to talk for a second. Associated with that, as we saw from the coastal revitalization, there was a pretty heavy emphasis on the residual material. I think the min- 366 Committee of Supply,

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ister defined it as an incentive to move the fibre off. Char- ging triple stumpage and then giving them relief if they bring it in, I suppose, is the way the minister defines an incentive. Never mind. That’s just the mixing of words. In the Interior, of course, and actually even on the coast, the pulp industry is in trouble. There are issues of access to fibre. There’s the low cost right now in the world mar- kets. There is a lot of concern, particularly with the per- manent curtailment in Mackenzie, and there’s concern in other communities that there will be more of that type of activity or loss of pulp mills.

To that extent, one of the key pieces that the minister talked about on the coast and, I know, has talked about publicly numerous times is in terms of waste fibre. Is the minister planning the same type of waste fibre strategy of triple stumpage if it’s left behind and not being charged if they bring it out? [4:10 p.m.] Is the minister planning the same type of strategy asso- ciated with waste for the Interior? Will that be something that will go out and just be implemented, or is that some- thing that will go out for consultation and analysis? Hon. D.

Donaldson:We were really pleased with the response to our request for engagement on renewing the interior forest sector overall. We know, from the what-we- heard document, that there’s very high interest to improve utilization of the fibre that is harvested on the timber-har- vesting land base, and especially fibre that people see being left behind. I know the member lives in a constituency where that’s of high concern. Having said that, we’ve taken a number of measures to address that.

At this time, there are no parallel comparis- ons and no intentions of instituting fibre recovery zones — the way that they’re being implemented on the coast — in the Interior as part of this renewal process. We do know that the pulp and paper sector is facing challenges. It’s true what the member says. The global mar- ket is low. It’s hard to predict outlook-wise, but I talk to the CEOs of companies in B.C., as well as the Pulp and Paper Coalition folks.

That outlook is not as rosy as what we see for the dimensional lumber prices. [4:15 p.m.] However, we are addressing fibre access through the Pulp and Paper Coalition, through our pulp fibre task force. Examples of that, very successful examples, are the work we’ve been doing under the community resiliency initiative, the $60 million over this budget cycle that will be in place for helping address communities that want to reduce their fuel loads, which makes more fibre available for multiple purposes — sawlogs as well as pulp. The community wildfire protection program addresses fuel loads outside of communities.

I know there’s a very, very large one in the member’s constituency, close to Hou- ston. The Forest Enhancement Society of B.C. work that has been underway is very successful in not only address- ing forest health and improving forest recovery but in providing fibre, alternative sources to sawlogs, such as pel- let plants. Finally, the demand is there in the Interior for fibre that is suited for pulp purposes. The demand is coming from places outside of the Interior. The example I give is Har- mac.

Harmac in Nanaimo is accessing a large percent- age of their fibre requirements through agreements with Skeena Sawmills and pulp-quality logs in the northwest Interior. All that is good news, but specifically, in answer to the question that the member posed, there are no plans for fibre recovery zones in the Interior that are like the ones on the coast. J. Rustad: The minister has brought up the Forest Enhancement Society as an example of the work that’s being done there to help bring some fibre in and do some great work, in terms of clean up, reducing risks and deal- ing with fallout from wildfires.

My understanding from our estimates last year, on the Forest Enhancement Society, is that they’re out of money. I think they might have about $1 million left. Obviously, the money that has been spent is still over a three-year period. There are a number of projects that are ongoing. Last year the minister talked about doing an assessment of whether or not Forest Enhancement Society was the vehicle they wanted to go forward with or to do something different. Clearly, without any additional funding coming from the ministry to the Forest Enhancement Society, it will be wound down. It does play a vital role.

There is a tremendous amount of area that has been impacted by fires that is not replanted, that need the work, that need the site work being done. Does the minister have any plans to allocate funding for the Forest Enhancement Society for the great work that they’re doing? Or is the minister planning to replace that model with something different? [4:20 p.m.] Hon. D. Donaldson:I was going to suggest a short recess after this answer. Are you changing the Chair roles any time soon, where there’ll be a natural break? The Chair:Y es, as reported, before 4:30 is still our scheduled time for a switch.

It’ll take us about five minutes to do the sanitization protocols here. Wo we’ll have a little bit of a…. Hon. D. Donaldson:Okay, sure. Let’s wait till then. Thanks. That’ll give us a good last two hours today, on a Friday afternoon. I agree with the member that the activities of the Forest Enhancement Society of B.C. have been very worthwhile in rural areas of the Interior. Just to make sure that it’s on the record about what expenditures are still in place…. I Friday, July 31, 2020 Committee of Supply,

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know that the member recognized that there was funding this year and next year and the year after. I want to make sure that it’s recorded that it’s significant funding. In this fiscal year, 2020-2021, $79 million is allocated for projects throughout the province. They’re mostly in the Interior, obviously. In ’21-22, next fiscal year, $60 million. Then, the member is correct, there’s a decline in the final year because the funding allocation is starting to run out. Further consideration of funding after 2022-23 is part of the budget process that we’ll be undertaking.

I really want to acknowledge that FESBC has been very instrumental in catching up on the backlog of areas that hadn’t been replanted sufficiently in the province and that also needed replanting due to forest health reasons. Some of this fund- ing that has helped us do projects under FESBC has been in connection with the federal government as well.

I have been in discussion with my federal counterpart, the Natural Resources Canada Minister, Seamus O’Regan, about the federal government Liberal Party’s commitment in their platform last year, in November, of planting one billion trees in Canada and making him aware that we have ramped up our abilities to plant trees. We planted a record number this year: over 300 million. This is an important part of FESBC work, as well as the other parts of their work in forest health, but we want to make sure that the federal government is aware that we have a natural vehicle for this as well.

As I said, we’ll be giving further consideration to funding FESBC as part of future budget processes. J. Rustad:Back to the what-we-heard report. There was one topic at the beginning of that report that is, obviously, a very significant topic, which is around tenure. Can the minister provide a list of the actions that were already taken that appear in the what-we-heard report from the Interior, the actions that are going to be going out for engagement and the actions that may be looking for additional input or consultation or policy development?

I get that there’s an awful lot in that report — hundreds, if not thousands, of bits of input that were grouped into various categories through there. I’m not looking for a detailed list but obviously some major themes. The minis- ter talked about some actions that have already been taken. [4:25 p.m.] It would be good to get that on the record in terms of what those actions are, the things that the minister is look- ing at and, of course, very specifically, that topic that is the number one issue, which is the issue around tenure. If the minister could provide some details around that, it would be helpful. Hon.

D. Donaldson:I’ll try to get my answer in here before we take our recess. In response to previous ques- tions around the Interior forest renewal process and the what-we-heard document, I wanted to make sure that the member is looking at more clarity around the future process.

We will be putting in a public document the actions that were already underway while we engaged with the Interior renewal process, so people will know and take comfort in the fact that we have taken seriously the drop in the annu- al allowable cut and the various impacts that that’s having, and how we’re addressing forest health and other major issues in the Interior. There is a whole variety, as the member said. I won’t get into them, because I agree with him, and I don’t want to get into the endless list of good ideas that people provided around tenure.

But he asked for an example of actions already taken, so I wanted to provide him with an example. What we have heard, through the what-we-heard doc- ument and even prior to that, is that communities were especially feeling that the interests of major tenure holders were being put ahead, by those tenure holders, of the interests of communities. So we wanted to make sure that tenure is reflective of the diversity of people who want to hold tenure in the province. [4:30 p.m.] An example of that is during…. Once the timber supply review has been conducted by the chief forester and a new annual allowable cut is set.

Then, during the apportion- ment process, for example, if there is volume that can be made available, then it’s made available to the kinds of ten- ures that people in rural communities find support their communities and support diversity. That’s community forests or with First Nations. An example of that is in the Quesnel apportionment, where we were able to significantly increase the amount of volume that was available during the apportionment process to a community forest there, as well as to local First Nations. The member asked for an example of actions already taken on tenure, and that’s one example.

The Chair:Thank you, Minister. Members, with a thanks for your work — and it’s been lovely spending the afternoon with you — I’m going to switch Chairs now. I wish you all a happy B.C. Day. A par- ticular thanks to the minister, to the minister’s staff and to the opposition critic for their respectful dialogue and the really constructive conversation of forest policy. We will now take a five-minute recess while we will carry out our cleaning protocols here. We’ll see you in ten days or so. The committee recessed from 4:31 p.m. to 4:40 p.m. [R. Leonard in the chair.] Hon. D.

Donaldson:I just wanted to read into the record some numbers and clarifications for the benefit of the member and also the record. The previous annual allowable cut number figure that I gave for the coast was 368 Committee of Supply,

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approximately 15.5 million cubic metres. That didn’t include private land. The number with private land is 15.84 million cubic metres. The member asked what the hourly rate was for what he said was the liaison between ourselves and industry on the manufactured forest products act amendments and that process, and that’s $135 an hour. I misspoke about the fed- eral Liberal platform, about the commitment for the num- ber of trees to be planted. It’s not $1 billion; it’s $2 billion. The member made reference earlier to what I think he typified as our platform promise to eliminate log exports.

We never made that commitment. Our commitment was to reduce the log exports in B.C. The Chair:Member for Nechako Lakes. J. Rustad:Thank you, Madam Chair, and welcome to the ongoing debate — or, I guess, estimates is a better way to put it. The minister, before the break, was talking about tenure as associated with the what-we-heard for the Interior revitalization efforts. I’m curious. There was an allocation. I think that was the word he used in Quesnel.

What I’m curious about is: in the Prince George supply area, there has been a timber sup- ply review that was done with determination of the AAC about five years ago now. The area has still been awaiting an apportionment decision by the minister. As a matter of fact, I think that the office of the chief forester is likely in the process of starting, if it hasn’t already started, a new determination for the Prince George supply area. I’m just curious.

Given what the minister said is an example in Quesnel, where he had a determination going forward, when can the Prince George timber supply area expect a determination from this minister? Sorry, the allocation — using the wrong terminology. It’s getting late in the day on Friday. [4:45 p.m.] The Chair:Minister. Hon. D. Donaldson:Thank you, Chair. I echo the offi- cial opposition critic in welcoming you back to the chair. I know you had insight into our dialogue yesterday, and it’s been equally interesting today — I think, anyway. I don’t know if my critic thinks so.

This is a great time to be able to discuss forestry issues, and we’ve [audio interrupted] aspects of it. Y eah, it is late on a Friday afternoon. The term that the member is looking for is apportionment. So once the TSR is set, the timber supply review sets the annual allowable cut, and it’s up to my office to allocate that. Just as a bit of background, the AAC determination for the Prince George TSA was in October 2017. The annual allowable cut was set at 8.35 million cubic metres a year.

Just to put that in context, that was obviously a decrease from the increases that were implemented in 2002, 2004 and 2011 to address the mountain pine beetle infestation. But the best context is what the pre-mountain-pine-beetle uplift was. That last determination was in 1996, and that was 9.364 million cubic metres here. So it’s a decline, but put in that context, not as significant a decline as the drop from the last mountain pine beetle uplift. Nonetheless, that allocation has still to be set in place. The member’s question was when. It’ll be in place before the end of this year.

And the member had questions about whether another timber supply review process has begun in this TSA. It hasn’t. Y ou might be thinking of the Mack- enzie TSA, where a timber supply review is underway. But as part of that 2017 determination, the chief forester also put in place a step-down in 2022, from the 2017 determin- ation, and a step-down having a drop down to 7.35 million cubic metres a year as an annual allowable cut. J. Rustad:I will try to be as short with my questions as I can, knowing the amount of time we have left. We still have a bunch of topics that we need to touch on.

I would appreciate if the minister could also be tight on the answers. [4:50 p.m.] Back to the revitalization, or the what-we-heard docu- ment. One of the other components that was in there that I found interesting was the one that the southern Interior forest industry has been pushing for some time, which is the “right log to the right mill” approach. I’ d like to spec- ulate a little bit…. If the minister could perhaps provide a little bit of insight as to how policy along those lines could be implemented for the southern Interior. [4:55 p.m.] Hon. D. Donaldson:It’s a very interesting discussion we’re having.

Essentially, the most important way to ensure that the right log to the right mill takes place, which is definitely a catchphrase that the Interior Lumber Manufacturers Asso- ciation has been advocating for, is in business-to-business relationships and partnerships. So we have supported that and recognized that and the Premier recognized that by challenging industry to embark on a TSA coalition process that we would provide support to. He did that at the COFI Convention in 2019. I’m happy to report that the Kootenay coalition has been working well.

It’s a very diverse group of business interests that are represented in that coalition. They’ve been able to provide us with a suite of recommendations around BCTS, around log exports and around increased utilization, for instance. That’s not only recommendations that they’ve been providing to us that we’re analyzing now, but they’ve also taken direct action together in their busi- ness relationships that’s been accelerated by the TSA coali- tion process. So they’re probably working through and Friday, July 31, 2020 Committee of Supply,

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have created 90 percent of what is needed amongst them- selves to get the right log to the right mill. We’re in the process of considering their internal recommendations to address any other policy changes that might be required. Essentially, it’s a business-to-business relationship that we support. J. Rustad:The Interior Lumber Manufacturing Associ- ation certainly…. A lot of folks there are doing some very interesting things. They’ve got an interesting mix of wood. They’ve got interesting terrain. They’ve got lots of con- cerns, of course, over the working forest and the potential erosion of the working forest.

I do know those business relationships have been improving, which is good. That is an interesting approach. I was curious as to whether or not the minister was looking at anything more direct as opposed to the support side. I want to talk a little bit about Mackenzie and the situ- ation in Mackenzie. I know that the member for Prince George–Mackenzie is going to have an opportunity to ask you a few questions about it on Monday, so I won’t go into too many details on it, as I want to allow him to, of course, be able to advocate for his community and his riding, as he does so well.

But given the situation in Mackenzie, I felt I needed to ask the minister a few questions directly. I know that with Conifex up and running, that por- tion is helpful, but there’s obviously a significant spruce beetle problem that we talked about earlier associated with the caribou issue. It’s up and through fairly extens- ively in the area of Mackenzie. There’s a lot of fibre in that area that goes out to other communities and other mills and facilities.

As the community is looking at the facilities in its own community, what steps is the minister considering, or is the minister considering any steps, to find a way to reduce the cost structure for that supply area so that the economics are favourable for the potential reopening of sawmills and, hopefully at some point, the pulp mill in that community? [5:00 p.m.] Hon. D. Donaldson:I’m happy to discuss the situ- ation in Mackenzie. The member and I were both there during the Mackenzie Matters rally last year and very pleased, as the member highlighted, that we were able to work with Conifex.

They are now reopened — 160 direct jobs, a big boost in the arm for that community. However, they have…. I rec- ognize the impacts on families and workers from the clos- ure of the Canfor sawmill and the Paper Excellence pulp mill in that community. We do have the Mackenzie TSA coalition process underway. They were about to present us with recom- mendations. I believe it was scheduled for the beginning of July. That was right in the midst of when Paper Excel- lence had decided to indefinitely curtail their activities.

They went back to the drawing board, and we should be in receipt of their revamped recommendations shortly. I’ve been in touch with Ken Shields. He is leading — or, at least, co-chairing, I believe — that TSA coalition process. On the cost structure question that the member wanted to canvass, around creating that potential for reopening the sawmill and the pulp mill, and the in- depth discussion around the TSA coalition’s suggestions for that that we’ve been party to, I would offer a briefing with the member offline.

That discussion would likely be better done there for the same reasons that he alluded to earlier about not wanting to canvass too deeply into the softwood lumber dispute. [5:05 p.m.] What I can say is that we have been working with the licensees around their chart operating areas to make it more economically viable to deliver fibre to Mackenzie. We have also been working with the BCTS on their plans, for their coming chart areas, for supplying fibre to local primary producers. Those are some of the things we’ve been doing in recent discussions that have, actually, assisted, for instance, Conifex to reopen.

We are aware of the situation about fibre leaving the community as a result of fibre no longer being tied to local milling facilities. The member is well aware of the reas- on for that. However, as I say, I’ll provide the opportunity if the member wants to take the discussion around cost- structure initiatives offline. J. Rustad:Y eah. I think we should try to have that call. Certainly, I would appreciate it. We’ll arrange a time to do that, whether that’s before the tenth, during the break week or shortly thereafter, whichever we can manage to arrange. I thank the minister for that.

One other issue, though, which I touched on, in the Mackenzie area…. It’s really all the way from Quesnel to north of Mackenzie, all through the spruce that’s in there. That’s, obviously, a significant component of our mid-term timber supply for the Interior. Many of those areas in there, which contain that mid-term timber supply, don’t have roads developed yet. There are bridges and other things that need to go in. There is, obviously, a significant forest health issue with the spruce beetle. When I spoke with the minister and canvassed this…. I think it was two years ago in estimates.

I don’t think we talked a lot about it last year in estimates. The minister and the ministry staff explained…. They felt the infestation was slowing, and it wouldn’t have as significant an impact on timber supply. Well, in the time that I’ve gone flying over the area as well as driving through the areas that are accessible by road, the infestation is still carrying on. Y ou can see it, cer- tainly, in the red and dead attack but also in the evidence of the green attack. Perhaps the minister could provide some information with regards to the strategy that the ministry is imple- 370 Committee of Supply,

Section A Friday, July 31, 2020

menting to help protect that mid-term timber supply from this infestation. Perhaps he could provide a little bit of an explanation as to the plans from the ministry and how the ministry plans to try to stop this infestation from doing any more damage than it has already done. [5:10 p.m.] Hon. D. Donaldson:I apologize around the length of time. It’s just that there’s so much going on around our spruce beetle response that I don’t want to actually read a laundry list into the record. I don’t think that’s the most productive.

I’ll try to focus primarily on the member’s question about what we’re doing to protect mid-term tim- ber supply and some of the plans for the future. I think it’s important to note that there’s an ongoing series of plans and management practices that have been jointly developed. One of them is a specific chief forester guidance around the spruce beetle outbreak. That guid- ance talks about what areas and the kinds of areas that need to be contained and how it should be hauled. All that is around how infected beetle wood should be hauled.

That was an issue at one point, about concerns that that was spreading the beetle to new areas, and that’s all around mid-term protection. [5:15 p.m.] That goes hand in hand with an annual joint licensee action plan that ensures a coordinated response from licensees in the harvesting that helps not only recoup value before value is lost but also helps stop the spread of the beetle. That is part and parcel of a partition that’s been imple- mented around green spruce that’s still alive, obviously.

That partition helps drive the harvesting activities towards getting on with harvesting dead spruce from the spruce beetle. We know that that’s important because it has to happen quickly. Something that helps in that regard and that we’ve implemented, on July 1, 2020, is the changes to the Interior appraisal manual will reflect significant downgraded spruce beetle–killed timber that will encourage salvage. We did a study.

We were part of a study through FPIn- novations and our ministry to determine the decrease in product value from processing spruce beetle–killed wood that was, on average, five years since death. The studies showed a reduction on lumber and product value of $55 per cubic metre. Obviously, as we’re getting five years and out, that does not result in a very valuable log out in the forest. So what we’re instituting is, for the salvage portion, a 25-cent stumpage rate in order to encourage the licensees to go after that beetle-killed wood. Those are some of the actions that we’re taking.

We have a budget this year for surveys and actual mitigation meas- ures on the ground. In the overall context, I want to make sure the member understands, and I think we highlighted last year that last year we appointed a director for a pro- vincial ark beetle response to coordinate response efforts across the province. J. Rustad: The minister mentioned a budget for the spruce component. I’m sorry if I missed it. I ask if the min- ister could, perhaps, just restate that budget and how that compared to previous years, the budget for the expendit- ure on the spruce beetle.

While we’re at it, since we’re into a budget questions dir- ectly…. I know I did that intentionally to try to get the minister to have a bit of a chuckle late on a Friday after- noon. I’m curious about the budget for the chief forester’s office. Many years ago, I remember conversations about the desire for increasing that budget and doing much more inventory work. I’m just curious as to what that level of budget is compared to previous years. [5:20 p.m.] Hon. D. Donaldson:A couple of answers there.

As far as the funding under the land-based investment strategy for the Omineca region, which includes the areas that the member highlighted, it has been approximately $6 million over the last five years. Last year the spend was $1.4 mil- lion, and this year the budget allocated is $918,000. The member might be interested in why the drop.

Well, there have been a number of activities completed in the first four years where more than $5 million was spent — for instance, air survey research on decay, which led to the $55-a-cubic-metre number that I already highlighted, and a sawmill pilot study, for instance, to assess the recovery of spruce beetle–damaged timbers. So there have been a number of initiatives over the last six years. A lot of them have been completed, and the budget is what I stated. The second question the member had was the budget for the chief forester’s office. This year the budget that’s been allocated is $28.616 million.

That is an increase of $829,000 from the 2019-2020 restated budget, which was $27.787 million. So an increase in the budget for the chief forester’s office. J. Rustad:I think one last question here, and then I’ d like to turn it over to my colleague from Cariboo-Chil- cotin, who has some questions around a range of topics. Unfortunately, with the move of the Green Party’s ques- tions into Monday, it creates a bit of a time crunch. So we’ve got to move some of those questions forward to today. Apologies to the minister for not having a heads-up in advance of some of these questions.

Hopefully, the tech- nology will allow him to be able to have access to the staff that he needs to get help with answering these questions. [5:25 p.

Document details

Collection	British Columbia — Debates (Hansard)
Citation	20200731pm CommitteeA n20
Type	hansard
Volume / chapter	20200731pm CommitteeA n20
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	ff6eb95f84dc465dca659796ef211ac142fb9fe9

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