Wood Business

Industry News Policies
BC completes logging contractor sustainability review


January 21, 2019
By Ellen Cools
Ellen Cools

At the Truck Loggers Association’s (TLA) 76th annual convention, B.C. Minister Doug Donaldson announced the government has completed the logging contractor sustainability review and plans to amend the Timber Harvesting Contract and Subcontract Regulation.

The review, launched in January 2017, was launched with the goal of improving logging contractors and licensees’ competitiveness by finding commonalities and encouraging improved business relationships.

According to a news release, phase one of the review included an economic assessment of the contracting sector to gather information and identify the industry’s main economic drivers.

Former provincial cabinet minister George Abbott and other members of Circle Square Solutions then spoke with contractors and licensees to identify issues. These findings, along with the economic assessment, led to a number of recommendations.

Former B.C. premier Dan Miller led the final phase of the review: conversations between contractors and licensees to reach a consensus on the recommendations.

While facilitating these conversations, Miller discovered that the most financially sustainable top 25 per cent of contractors and licensees were already sharing information, planning together and negotiating rate models.

Consequently, Miller recommended amendments to the regulation that will:

  • require the parties to jointly develop rate models in order to enhance transparency
  • ensure mutual recognition of changed circumstances in order to reassess rates and enhance job stability
  • create an arbitration process based on the rate model
  • increase access to information through mandatory data collection

Miller also recommended the development of a best practices guide.

“As allowable annual cut levels decline and forest-sector economics shift, it is ever more critical that contractors and licensees – being codependent in the B.C. forest sector – find ways to work together to improve competitiveness,” said Miller in a statement. “My final recommendations focus on creating a sustainable environment where a diverse range of contractors and licensees – large and small, single and multi-phase – can survive and thrive in the long term.”

The review also recommends the elimination of the fair market rate test outlined in the regulation, which had caused delays in settling contractors and licensees’ rate disputes, consequently hindering their ability to operate sustainably.

At the TLA convention, Minister Donaldson explained the legislative changes will be implemented in the fall, following a six-month process involving engagement with industry stakeholders.

“Elimination of the fair market rate test is a monumental change for our industry, allowing contractors to more equitably share in the value of the timber resource,” said David Elstone, executive director of the Truck Loggers Association, in a statement. “It will result in a fundamental shift in the relationship between contractors and their employers across the province.”