Forestry Management
March 29, 2018 - On August 24, 1943, the Globe and Mail announced, “the formation of the Ontario Forest Industries Association by a widely representative group of lumber, pulp and paper and associated industries, with the objective of securing better utilization of the great forest resources of Ontario.”
March 26, 2018 - On Oct. 18, 2017, a logger was killed in a tragic incident near Mackenzie in northern B.C. While using a feller buncher to cut timber on a slope, the machine tipped over backwards leaving the operator no escape route when the machine caught fire. His death was devastating for his family, his community and his coworkers.
March 26, 2018 - About eight years ago post secondary forestry programs in Alberta faced critically low student enrolment. Some semesters had so few people enrolled the programs were in jeopardy of closing. Today those same programs are at or over capacity.
March 21, 2018 - Spring is a time for renewal and growth. In Canada, this means tree planting.
March 15, 2018 – Healthy, vibrant and sustainable Canadian forests is the theme of a new youth-focused initiative announced today by Forest Products Association of Canada (FPAC) and Earth Rangers, the kids’ conservation organization.

Announced on the sidelines of the GLOBE Forum, the largest and longest-running leadership summit for sustainable business in North America, the joint Living Forests Initiative will focus on educating youth about the many benefits healthy, living forests provide — and what needs to be done to ensure they continue to thrive for generations to come.    

To help raise awareness of the central role forests play for all life in Canada, the initiative kicks off on May 1, 2018 with the launch the first ever Earth Rangers Living Forests Photo Competition, which is open to aspiring photographers aged 12 and under across Canada. Categories include “best wildlife photo,” “best forest landscape” and “best tree photo.” A panel of expert judges will review all entries, and prizes will be awarded for the top photos in each category after the competition wraps up on June 18, 2018. 

“As future stewards of some of the world’s most vibrant forests, kids in Canada need to have a direct stake in the health of this incredible natural resource. Earth Rangers is looking forward to working with FPAC on this exciting new initiative to help educate and inspire the next generation of conservation leaders,” says Tovah Barocas, vice-president of external relations at Earth Rangers.

Canadian forests provide huge environmental, economic, and social benefits. Home to almost 70 per cent of Canada’s terrestrial species, healthy forests provide us with the air we breathe and help reduce the impacts of climate change. They also play a crucial role in Canada’s economy, with the forestry sector acting as one of the largest sources of employment in the country while also supplying important products like lumber and newsprint.  

“We view this partnership with Earth Rangers as an important part of FPAC’s continuing efforts to engage and communicate to the public the important work our sector plays in sustainable resource management and putting Canadians to work,” says Derek Nighbor, chief executive officer of the Forest Products Association of Canada.
March 13, 2018 - The Board of Directors of the BC Forest Safety Council (BCFSC) is pleased to announce that Dave Lehane has been appointed chair of the BCFSC, effective March 22, 2018. Dave takes over from Ken Higginbotham, who retired at the end of 2017.
Feb. 20, 2018 - Supply chains have evolved significantly in recent decades, and yet are now on the edge of even more transformative changes driven by the digital revolution. The fourth industrial revolution, as it is called, is characterized by an interconnection of machines and systems within the production sites as well as between them and the outside world.
Feb. 13, 2018 – The Ontario Ministry of Natural Resources and Forestry is encouraging citizens to help it solve natural resource violation cases.

They include poaching large and small game; unlawful hunting or shooting from a roadway; fishing out hunting out-of-season; the illegal sale of species at risk, wildlife or animal parts; taking more fish or game than allowed; dumping waste on Crown land; illegally removing sand, gravel or wood from public lands; having fires in restricted fire zones or without a permit; and illegal activities in provincial parks and protected areas.

Many of the cases go unsolved because they occur in remote areas with few witnesses.

The ministry is encouraging people who have information to call its tip line at 1-877-847-7667.

A full map of the unsolved cases can be found here.
Feb. 7, 2018 - WorkSafeBC has released a new three-year plan to help employers reduce serious injuries in the forestry sector. The 2018-2020 Forestry High-Risk Strategy is a renewed three-year strategy for prevention activities in harvesting and related operations.

“The intent of the forestry high-risk strategy is to implement focused and effective inspections in those areas of the timber harvesting sector that have the most risk to workers,” said Dan Strand, director of prevention field services for WorkSafeBC. “Our goal with the high-risk strategies is simple — to reduce the number of serious injuries.”

Identified high-risk work activities typically fall into five areas of timber harvesting:

  • Manual tree falling
  • Log transportation
  • Cable yarding
  • Mechanized harvesting
  • Silviculture
In addition to the five main areas, emergency-response planning has also been identified as a critical target area for the forestry high-risk strategy.

Due to the continuing high injury rate in hand falling, a dedicated inspection team will focus on employers with high injury rates and/or poor compliance rates.

The seasonal nature of forestry work is also incorporated into the forestry strategy. Officers in different regions of the province will continue to have the latitude to shift their inspection activity to reflect seasonal work.

The serious injury rate in the forestry sector is much higher than the average in other sectors. In 2016, the serious injury rate in forestry was 1.2 per 100 person-years of employment, compared to 0.3 across all sectors in B.C.

In 2016, there were 13 fatal workplace incidents involving forestry workers (based on the classification units that comprise the forestry high-risk strategy).

WorkSafeBC’s high-risk strategies identify and target industries and employers with a high risk of serious workplace injury and a significant contribution to the serious-injury rate. High-risk strategies include four industry sectors: construction, forestry, health care and manufacturing.

More information about the forestry high-risk strategy, including 2018 deliverables and timelines, is available at
Feb. 6, 2018 – The towns of Canmore and Whitecourt, Alta., as well as Woodlands County have received a combined total of $130,000 to eradicate the mountain pine beetle.

The mountain pine beetle threatens six million hectares of Alberta’s pine forest and affects the activities of more than half of the major forest companies operating in the province.

The funds are being allocated as follows:
Canmore –  $75,000
Whitecourt ­– $29,000
Woodlands – $26,000

“Our best chance to combat the mountain pine beetle infestation is if our government partners with local municipalities on aggressive and proactive detection and control programs,” said Oneil Carlier, Minister of Agriculture and Forestry.

In 2017, more than 92,000 trees across the province were cut and burned to help control the mountain pine beetle outbreak.
Feb. 6, 2018 – FPInnovations has released a special guidebook outlining best management practices for integrated harvest operations in British Columbia.

The guidebook explains that harvest residue is increasingly in demand to be used for fuel with the goal of expanding the bioeconomy.

It encourages forest residues to be used for this environmentally friendly practice rather than be burned or left to rot by the roadside.

The publications explains that this residue could be used to create hog fuel, chips, wood pellets or firewood. It goes on to describe piling practice based on machinery and transportation.

The guidebook finishes by outlining best practices for primary and secondary harvesters.   

Access the full publication here.
Jan. 23, 2018 - A pilot project to produce and commercialize biochemicals derived from wood at Resolute Forest Products's pulp and paper mill in Thunder Bay, Ont., has received a new round of funding.

The project will establish a biorefinery for TMP-Bio – a patented technology developed by FPInnovations to produce biochemicals, including cellulosic sugars and high-quality H-lignin, from wood.

The federal government is contributing $5.8 million to the project – $3 million through FedNor and $2.8 million through Natural Resources Canada. The Ontario government announced funding for the project in 2016.

"Our Government values innovation and is committed to building collaborative working relationships to help support the forest sector. FPInnovations has shown leadership in transforming the industry, promoting a culture of collaboration, and demonstrating results by developing bio-products with a low carbon footprint." Minister of Natural Resources Jim Carr said in a news release.

Thunder Bay-Rainy River MP Don Rusnak called the project is a significant step towards developing a bioeconomy in Northern Ontario and all of Canada. "The project has the potential to completely transform the forest products industry of our region, and I look forward to seeing the positive impacts it will have," Rusnak said.

"This project highlights the importance of investing in de-risking new technologies and products, and points the way for developing and delivering a transformative technology that contributes to the Canadian bio-economy," said FPInnovations president and CEO Stéphane Renou. "This major initiative strengthens the industry's position as a leader in the bio-refinery sector." 

Richard Garneau, president and CEO of Resolute, said the company is pleased to provide a host facility and funding for the project. "This project will help create opportunities to diversify the use of wood fibre into higher-value-added products," he said.
Jan. 17, 2018 - Minister of Natural Resources Jim Carr announced that the Canadian government will fund six projects in British Columbia to promote innovation and diversification in forestry and support collaboration with Indigenous communities.

The $6.45 million in funding will support the Investments in Canada’s Forest Industry Transformation (IFIT) program and the Indigenous Forestry Initiative (IFI) through the Strategic Partnerships Initiative for Indigenous Economic Development.

“Technology and innovation have placed our forest sector at the threshold of a new era. Adopting new ways of using renewable forest materials will help ensure that Canada’s forest sector continues to play a key role in our economy and contributes to efforts to address climate change,” Carr said in a statement.

The recipients are:

  • Pacific Bioenergy Prince George Limited Partnership: $3.19 million in funding to implement a Biomass Enhancement System, which will allow for the use of diverse sources of biomass, including underutilized forest residuals, to produce high-quality wood pellets at its Prince George pellet processing facility.
  • Structurecraft Builders Inc.: $1.93 million to implement a Dowel Laminated Timber production system at a newly constructed facility, which will house new machinery and associated storing and handling systems. This next-generation all-wood building product requires no nails or glue and will help fuel the rapidly growing demand for green construction.
  • The Tsay Keh Dene CHP Biomass Energy project: $25,000 to assess the feasibility of bioenergy to reduce the reliance of the Tsay Key Dene community on diesel fuel for heat. The community is considering an Organic Rankin Cycle biomass plant as its technology of choice, as this technology is able to use a variety of fuels available to the community.
  • Gitxsan Development: $1.165 million to implement a series of scans and activities to lay the foundation for the Gitxsan people to participate in and benefit from major resource projects occurring within, and near, their territory.
  • The Kwadacha First Nation will receive a total of $143,000 for two projects: $98,000 to support a community combined heat and power bioenergy system. Using a sustainable supply of local forest biomass, this system will create employment, economic and social benefits, and reduce greenhouse gas emissions. $45,000 to undertake a review and prepare a report of their experiences and lessons learned from a successful green-energy initiative in the community that uses local beetle-killed timber to fuel a bioenergy plant for the generation of electricity and heat.
Jan. 16, 2018 - Tolko Industries says Tolko Woodlands has officially received SFI Sustainable Forest Management and Fibre Sourcing certifications after months of hard work, replacing any current CSA certification it holds.

The Woodlands team put in a “large amount of effort through changes in processes, documentation and through external confirmation audits to successfully achieve this certification,” says Tolko. 

Tolko’s CSA certification expired on January 1, 2018, at which time its Sustainable Forest Management (SFM) will be certified exclusively to the SFI Standards.
Jan. 16, 2018 - According to a 2016 survey of logging contractors conducted by Canadian Forest Industries (CFI), 56 per cent of Canada’s contractor force is over 46 years old and 57 per cent of contractors expect to be out of the industry within 10 years. Nearly a quarter of logging contractors plan to simply sell their gear at the auction, while 32 per cent admit they have no plan at all on how they will exit their business.

These results are concerning, but not entirely surprising. Business owners live and breath their business. No job is too big or too small when your company’s name and reputation are on the line. As a result, the amount of time dedicated to handling the day-to-day operations usually leaves little or no time for effectively structuring your business and planning for your transition into retirement.

Often, the biggest stumbling block is knowing where to start. Retirement is a huge topic and much can be written about each facet of the retirement planning process. The goal of this article is to get you thinking about the three key questions you need to ask yourself as you contemplate retirement and develop your succession plan.

Even if you’ve already got a succession plan in place, it’s a good idea to ask yourself these same questions on a regular basis. Many factors can change during the succession process and it’s important to check in and make sure your plan is still on track.

1.    What’s my timeline?

How much longer do you want to work in the business before retiring or moving on? If you are 30 years old and want to work until you’re 65, your timeline for retirement is obviously a lot longer than someone who is 60 and wants to retire in five years. However, just because you have 35 years until retirement does not mean you shouldn’t start planning.

There are serious tax and legal issues in liquidating, selling or transitioning a business, so it’s important to start early and speak with professionals about the pros and cons of various possible exit strategies. The earlier you start planning, the more options you have available. For example, some tax planning strategies require two or more years to put in place. If you leave your planning too late, the strategy no longer works. Starting early also gives you the best chance to get top dollar for your business and pay the least amount of tax.

When considering your timeline, you also need to consider how you see yourself transitioning from the business. In other words, what does “retirement” look like to you? Do you see yourself making a clean break one day and never working again, or gradually reducing your hours and role in the business over a period of time? Everyone is going to have a different goal and answer to these questions and there are no right or wrong answers. The key is to determine what’s right for you.

2.    How much money do I need to retire?

More specifically, what is the annual after-tax income you need to support the lifestyle your want to maintain after you leave the business? Will you live in the same home? Drive the same truck? Do you plan to travel? As the saying goes, you need to “begin with the end in mind.” Then you can work backwards to where you are today and start making decisions that take you closer to where you want to go.

This is a particularly important question to ask if you are relying on the proceeds from the sale of your business to fund your retirement. If you’re always working head down in the business, you can quickly reach the point when you decide you want to retire – only to realize you’re not in a financial position to do so. That’s a terrible place to be. In some cases, the business may not have enough value to meet your ongoing financial needs in retirement. In other cases, the business may not even be saleable.

By comparing your desired after-tax income in retirement to what your business is worth today, you can determine if your timeline is realistic and what steps you may need to take to increase the value of your business in preparation for sale. Working with your advisors, you may also be able to rule out certain exit strategies as they simply will not provide the income required for retirement.

3.    How do I get out?

Once you’ve decided what your desired timeline and how much money you need to fund your retirement, you need to ask yourself, “How do I get out?” In other words, what is your ideal exit option?

There are generally three options that we consider when transitioning a business.

Liquidating your business – According to the 2016 survey by CFI, 22 per cent of contractors expect to simply sell at auction. If you have managed to pay down your debt over the years you will likely end up with cash left over; however, you will not get back the value of the business you have built. Additionally, the business will cease to exist. Employees and subcontractors will need to find new jobs. The impact of you closing your doors will impact more people that just you and your family. 

Selling your business – Selling a business takes time. Structuring a business for sale and finding a buyer both take time which is why it is best to start planning early. Setting up your business so it is profitable, has experienced, well-trained staff in a good location with solid processes in place does not happen over night. Planning for your exit while you build your business will help ensure you have the things buyers are looking for when it is time to sell your business.

If you plan to sell your business, the potential buyers are most likely going to be a third party, such as a competitor or another company within the industry (12 per cent per CFI survey), or key employees / managers looking to take over the business (9 per cent per CFI survey). Generally, when selling to a third party there are two options: the sale of assets and the sale of shares. The purchasers normally want to buy assets to ensure they are not be acquiring any hidden liabilities, and so the purchaser gets to increase the cost base of the assets purchased for tax purposes.

The seller, however, usually wants to sell shares to potentially utilize their Lifetime Capital Gains Exemption (LCGE), which was $835,714 in 2017. In order to qualify for the LCGE, the shares must qualify as a qualified small business corporation. Inactive assets such as real estate and investments may need to be removed from the company to ensure the company qualifies, which is one of the reasons it is important to have a corporate structure that allows for the ongoing removal of inactive assets and excess cash.

Transitioning your business to family – According to the CFI survey, 25 per cent of respondents were looking at transitioning to family. This could be children, a sibling, or cousins working in the business. It’s important to understand transition planning is a process and not an event. Including family dynamics with the already complex issue of selling a business requires that you have a solid plan in place. The idea that Mom and Dad have for the transition of their company may not be the same as that of their successors and that is why it is important that a common vision of the business development be shared.

Successful transitions usually ensure that new owners and managers are clearly identified and trained and that there is an open dialogue with the free circulation of information. New owners and managers might not have all the skills required to do the job; therefore, it is important to identify them early so training can fill in those gaps. Bringing in the new owners and involving them in decision making and business management also grooms the new owners for a successful transition as they can learn from someone with proven business acumen. Lastly, the transferor’s acceptance of giving up control and ultimately leaving their place as the decision maker solidifies a successful transition.

A final word

Without question, there many steps you need to take to successfully exit your business – regardless of how you plan to get out. But it starts with answering these three questions. At the end of the day, the only certainty is that one day you will transition – either voluntarily or involuntarily. Therefore, it is important to be well prepared to ensure a seamless transfer that provides you with the most security and ability to enjoy the lifestyle you have worked hard for. Time is your ally, so use it. As a business owner you have spent your life building value, the key is not to wait until it is too late to protect it.

Blair Traxler, CPA, CA is a Business Advisor with MNP’s national Forestry & Forest Products team. Based in Prince George, he provides accounting, tax and strategic business advice to logging contractors and businesses connected to the forest industry across Northern B.C.

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