LOG EXPORTS FROM BC----PRIVATE LANDS VS PUBLIC LANDS

Logs that are exported from BC are subject to different regulations dependant on where they are harvested. If they are cut on Public Lands (Tree Farm Licenses) they are controlled by Provincial legislation and are only to be exported with the Forest Ministers written approval. If however they are cut on “private land” which includes public land given away in the E& N railway grants, they are subject to Federal rules and what is known as the “surplus test.”

This “test” is to offer these logs to any BC mill that would like to purchase them before they are exported. The surplus test is supposedly to determine if the logs to be exported are in fact “surplus” to the needs of domestic mills. In other words, no BC mills want the logs. If a BC mill does in fact want those logs they can “block” the export and buy the logs.

In theory it is not a bad system. However, in reality, the system tends to break down. Many of the mill owners in BC are forced to purchase the logs they need from just a small handful of logging operations that have logs for sale. Companies like TimberWest, Weyerhauser, and Interfor, control most of the log market. It has long been rumoured that if a mill owner was to “block” an export sale against the wishes of his supplier, he may well be looking for a new supplier next year. With so few companies to buy logs from, mill owners are not able to buy what they really would like to.

An example of this was described at a Forum in Duncan in 2003. Rick Doman, CEO of Doman Industries, stated that he is forbidden to bid on logs destined for export, even though he needed them, because of contractual agreements he has to buy domestic logs.