Wednesday, November 07, 2007

Selling Out British Columbia's Forests

Paul Willcocks
Times Colonist
Monday, November 05, 2007

The Liberal government's willingness to hand benefits worth hundreds of millions of dollars to forest company owners simply doesn't make sense.

The government has written contracts with forest companies covering their private land that has been included in provincial tree farm licences.

The public compensated the companies handsomely to get them to sign the contracts, which ensure the land is managed and protected as timber-producing forests.

But now all the companies do is ask and the government lets them out of the agreements.

The companies make huge, quick profits.

The public loses access, green space, environmental protection, forest jobs -- and gets nothing.

This started in 2004. Weyerhaeuser asked the government to take 223,000 acres out of its tree farm licences on Vancouver Island.

Ministry staff told Mike de Jong, then the forests minister, that it was a bad deal.

The company had already been compensated for including the land; the tougher environmental and replanting standards were worth continuing; and the agreement ensured the land stayed as forest. Communities saw this as an important social contract, staff reported.

And if the government let the company take the land out of the tree farm licence, it would have to negotiate how much compensation would be paid to taxpayers, staff said, and that would be tricky.

But de Jong over-ruled the ministry's non-political staff and said OK to the company's request. He got nothing in compensation for taxpayers.

Within months Weyerhaeuser began negotiating its sale to Brascan, which agreed to pay $1.4 billion.

Much of that value was due to de Jong's decision, which meant a $500-million windfall for the company.

Brascan executives said that getting the lands out of the tree farm licence meant an extra $18 million to $24 million a year in profits for the business, now called TimberWest.

And for the first time, the company could sell the land for development instead of being obliged to keep it as timber to ensure the future of the Island forest industry.

That meant a huge increase in the land's value.

The company now says it has identified 94,000 acres it wants to take out of forest use. They're worth $300 million to $450 million as is, "with a significantly higher valuation potentially achieveable through value-added development activities."

De Jong could have said no; nothing bad would have happened and the company had no case for demanding the gift.

He could have asked for compensation for the public or job and investment guarantees, or at least demanded a donation of land for parks.

Instead, he handed benefits worth $500 million over and got nothing in return.

Forests Minister Rich Coleman did it again this year. Western Forest Products asked him to let it out of its tree farm licence, reducing its environmental and replanting obligations and allowing more raw log exports.

And, more important, freeing up 70,000 acres for sale and development, including waterfront west of Victoria used by surfers, campers and tourists and land adjacent to provincial parks.

It's a gold mine for the company. And the government got nothing for the public -- not money, investment commitments or a single acre protected as a park.

Coleman didn't consult anyone -- politicians or public -- from any of the communities. It was astonishingly arrogant.

A developer has already bought the Jordan River property. He won't commit to public access to the surfing beach and camping area.

Western Forest Products is also selling another big chunk of land near Sooke Potholes Provincial Park. Just two years ago, the public helped raise money to buy land for the park. Part of the appeal was the park would be surrounded by land protected as forest. It might be logged, but it would replanted.

Coleman ended that. The company now has 561 acres for sale around the Potholes.

So why did he do it? Coleman says the company asked for help and he delivered.

There's no evidence he saved one job or that Western Forest Products needed a handout.

Coleman hasn't released a single scrap of paper showing a review or rationale or business case for his decision.

Now the government is planning the next giveaway, in the Kootenays. Pope and Talbot has been advertising 16,000 acres currently covered by tree-farm licences for sale for development. Coleman maintains he hasn't decided whether to let the company out of the contract.

But in fact, the same developer who bought the Jordan River property has purchased a large lakefront tract from Pope and Talbot. Both the developer and the company seem confident the deal is done, despite Coleman's claims.

Again, why would the government give a bankrupt forest company a gift worth millions? Especially when the land includes property that's important for running the business in future.

Companies ask for favours worth hundreds of millions of dollars. The government doesn't negotiate, or consult community, or protect the public. It says sure.

And you lose.

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