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Community Forests - a viable alternative for First Nations to Ontario's present corporate approach

September 16, 2009 - 6:20am | by brianbeaton

In preparation for the upcoming consultation sessions (see press release below) different groups are preparing material to present to the government concerning building and sustaining the forests for local, value added enterprises and economic development initiatives. The concept of Community Forests is once again being considered by some as a viable alternative to the corporate exploitation of this valuable resource that is presently occurring.

Here are some suggested responses to the province's "consultation" questions that support the development and sustain community forest corporations (produced by Dr. David Robinson, Director, Institute for Northern Ontario Research and Development, Laurentian University.

1.  Maintaining a Healthy, Productive Forest

1.       Should management units be larger or smaller? Should they all be the same size? What criteria (such as tenure obligations, ecological boundaries, watersheds, transportation routes, etc.) should be considered to determine the appropriate number and size of management units and why?

This is a misdirected question. Start with communities, which are already roughly related to their ecological and watershed boundaries and tied to transportation systems. Assist these natural decision units to collaborate to find efficient management arrangements. 

2.       • Should Ontario consider a system of intensive management zones similar to that being proposed by Quebec? If so, what do you suggest would make this approach suitable to Ontario (for example zoning, incentives, or licence conditions)?

Communities should consider intensive management zones.

3.       • What improvements to the Forest Renewal and Forestry Futures Trusts could be considered to ensure there is sufficient funding for basic silviculture during both positive and negative economic cycles? Are there other mechanisms that could be considered?

These institutions are obsolete if responsibility is passed to communities. The keys to efficient allocation are

1) the communities receive the resource revenues as the designated public sector owner and

2) the Province accepts that its share comes as a growth dividend through income and sales taxes.

Communities with perpetual tenure have much improved incentives to invest in silviculture and to manage the forest to buffer cycles than either the province or harvesting companies.

2. Modernizing Licensing & Allocation
 
1.       Should there be a separation between strategic and operational forest management responsibilities?  If so who should be responsible for what (e.g. strategic planning, operational planning, reporting, other forest activities and compliance monitoring)? 

Community Forest Corporations organized around existing communities should be the basic unit of management. They are democratic, decentralized and have the right incentives

2.       •Should consuming mills be responsible for the management of a public sector resource? Should special operating agencies be established to work between companies and government? What is the appropriate model (e.g. Crown Agencies, forest management boards, community forests, independent forest management companies) and role for government?

Community Forest Corporations should have responsibility delegated under a set of general functional requirements set by the province. A wide variety of management schemes will be tried. The province must be responsible for research and possibly management training.

3.       How should timber be allocated (e.g. auctions, contracts, government commitments) to provide flexible and open access to available timber for new emerging entrepreneurs as well as offer investment certainty for existing competitive industry?

 Community Forest Corporations should be determining who is best suited to address local and regional needs and requirements.

4.       What proportion (e.g. 25%, 50%, 75%) of Crown timber, if any, should be made available through commitments? Under what conditions (e.g. mill is operating, first right of refusal, specified term)?

A transitional set of contracts with existing operating mills should be put in place as responsibility is handed to CFCs.

5.       What mechanisms can be put into place to promote increased opportunities for Aboriginal involvement in the forest sector (e.g. direct licences or allocations)?

Start with empowering CFC on their own lands.  

6.      How much regional variation should there be across the province?

Lots. Encourage experimentation and variation.

3.  Improving the Pricing System

1.       What features of the current pricing system (price - base payment and residual charge, forest renewal charge, and forestry futures charge) should be retained and what improvements are necessary? For example, should the amount charged for forest renewal remain specific to the management unit or should these charges be established regionally or provincially?

This assumes we are just tinkering with the existing approach. In a working market, the price at which communities offer forest products will reflect true social costs and investment is based on future benefits. The current system fails to get either valuation right consistently. We have to start thinking of CFCs as businesses with an asset base that they want to take care of. They will invest to increase the value of the forest. 

2.       • What mechanisms and design strategies (e.g. auctions, contracts, administrative) should be used in the pricing of Crown timber to better reflect market value and changing economic conditions? If mechanisms like auctions were used, what proportion of timber should be made available through those auctions and what should be made available through other methods?

Spot auctions and auctions for future delivery are likely to be very helpful for both CFCs and for mills, Developing a workable approach IS a system-level problem: the province will have to help develop mechanisms. The should be based on participation by  the CFCs.  Encourage experimentation and variation. 

3.       What role should government play in determining the amount charged for Crown timber? Should government consider using organizations such as an agency appointed by the government, an independent board, or other types of organizations to provide this function?

Only the province will have capacity for long-run forecasting and research. The province should play a stabilizing role like the central bank in the monetary system – purchasing when it believes the price is too low, selling when prices go too high, and providing high quality advice to the players.

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MNDMF press release 

Growing a Sustainable, Competitive Forest Sector - McGuinty Government To Consult On Licensing, Wood Allocation And Pricing

The public will play a key role in helping Ontario’s forest industry balance economic success with sustainable practices.

Released today, Ontario’s Forests, Ontario’s Future is a discussion paper that will guide both online public comment and a series of consultations that begin next month.

The paper deals with how the province should modernize forest tenure and pricing – the system it uses to determine how wood supplies are licensed, allocated and priced, as well as the associated legal obligations.

A series of stakeholder and public consultations has been scheduled as follows: Sault Ste. Marie (September 17), Timmins (September 22), Hearst (September 24), Dryden (September 29), Thunder Bay (October 1), Marathon (October 6), Huntsville (October 13) and Pembroke (October 14). Additional sessions will be held with Aboriginal organizations and communities.

The discussion paper is available on the Environmental Registry at www.ontario.ca/environmentalregistry, Registry Number 010-7614.

QUOTES

“This review of our tenure and pricing system – which determines how companies get and pay for wood in this province – is an important step toward building a bright future for ourselves in forestry.  I believe we can create a fertile environment for new and emerging opportunities for industry while, at the same time, preserving the best of our current system.”
 - Michael Gravelle, Minister of Northern Development, Mines and Forestry

“I am happy to see my colleague is taking the opportunity to build on the good work MNR has been championing. Ontario is known for having world-class forest management standards and we need to ensure that our model adapts to changing circumstances to protect our resource now and in the future.”
- Donna Cansfield, Minister of Natural Resources

QUICK FACTS

  • The 2009 Ontario budget included a commitment to create the best environment possible for Ontario forest product businesses to succeed while balancing this with sustainable practices.
  • There are currently 46 Forest Management Units in Ontario, areas of Crown forest designated under the Crown Forest Sustainability Act for the purpose of organizing forest planning and operations.

LEARN MORE

Anne-Marie Flanagan, Minister’s Office, cell phone: 416-268-3690
Mark Speers, Director, Forest Tenure Project, 705-945-6636, cell phone: 705-943-1041

ontario.ca/forestry-news

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