Dan Eaton
Resource Group
6385 Vernon Avenue
Peachland B.C. V0H 1X8

September 23, 2019

Hon. Doug Donaldson
Minister of Forests, Lands, Natural Resource Operation and Rural Development
Room 248 Parliament Buildings
Victoria B.C. V8V 1X4

Dear Minister,

I am writing this letter on behalf of myself and all the other logging and trucking contractors in the province who are being severely impacted by the crisis in the forest industry. Last Tuesday’s announcement of sixty nine million dollars in funding will provide welcome relief for some of the many affected mill workers in the province, but appears to offer no relief to the independent logging and trucking contractors and their employees, whose numbers are estimated to be two and a half times larger than the number of mill workers by the Interior Logging Association. Many of these impacted employees have not worked or have worked on curtailed shifts since March. Relief for this segment of the industry is imperative.

In opening, I must state that there appears to be a level of political brinkmanship in play which is not constructive in reaching solutions to the issues. I read many media reports which incorporate the statement that the previous government did little to prepare for the inevitable transition to a post beetle forest industry and harvest reductions. I personally began attending meetings of the Mid Term Timber Supply Review Committee in 2012. The purpose of this committee was to meet with stakeholders and provide input as to how the upcoming reduction in harvesting could be mitigated as much as possible. This was a bipartisan committee which the current Labour Minister, Harry Bains, was a member of. This committee did make recommendations, most of which were not acted on by the previous or current governments. I would also remind you that, as the current governing party, we look to you for leadership in navigating the industry out of these trying times. I suggest we all work together and take meaningful action in revitalizing the forest industry and making it great again.

While the reduction in AAC’s was inevitable, as reported, it is not the only reason for the crisis. It is being exacerbated by many outside forces including but not limited to the softwood lumber agreement, trade tensions with our two largest trading partners, a high cost operational environment, and in my view, the most important factor, a stumpage system which is broken.

Following are some ideas which may help end this crisis sooner:

• Reduce regulatory and operational burdens wherever possible.
• Provide a carbon tax exemption to logging and trucking contractors as provided to other industries which have no option but to use fossil fuels.
• Increase the small-scale salvage program and encourage independent contractors to harvest burnt and beetle killed wood which would otherwise remain unharvested. Also, use the small-scale salvage program for fuel mitigation and fire control projects around communities.
• Change the stumpage system. We need a system that more accurately reflects current market values, not one which reflects values of 12-18 months ago.
• Open BCTS so all wood sold under this program is exportable. I believe that with our innovation and expertise in manufacturing, outside buyers would not be competitive and little of this wood would leave the province. It would also go a long way in resolving the never-ending SLA dispute.
• Provide retraining and bridging money similar to the program offered to mill workers.

In closing, I would like to state that while few if any of the major forestry licensees in the province are in any danger of bankruptcy, many independent logging and trucking contractors are. The reason for this is that while the forest licensees were having record breaking profit years in 2017 and 2018 (due in part to a stumpage system which did not accurately reflect lumber values, resulting in huge windfalls to the licensees), contractors were fighting two consecutive years of record floods in the spring and record fires in the summer which limited profits. As well, little of the record profits made by licensees were reflected in the contract rates paid to the independent logging and trucking contractors. While there has been a lot of talk about contractor sustainability over the last several years and how to obtain it, there has been little action to ensure such.

I would be pleased to meet with you or your staff to discuss these issues.

Sincerely,

Dan Eaton
Resource Group
daneaton9@gmail.com