Getting To The Heart – The BCTS Review
- David Elstone
- 5 hours ago
- 8 min read
An Editorial Opinion – Right From The Stump, April 17, 2025
The BCTS Review that was launched in January 2025, and co-chaired by Brian Frenkel, Lenny Joe and George Abbott, is nearing an end for public input intake.
The BC government describes this initiative as a periodic review to ensure BCTS is evolving in an ever-changing marketplace while meeting its mandate commitments. The reality is that BCTS performance has been seriously impacted over the last few years. This review comes as the Premier seeks to meet his mandated target for a timber harvest of 45 million m3. Raising the BCTS harvest off its historic lows will help the Premier in his drive to 45!
if you have something to say about BCTS, and more importantly, if you have ideas, please send your input as soon as possible to BCTS.Review@gov.bc.ca. If you agree with my perspectives below, feel free to copy this article into your response.
BCTS HARVEST DATA speaks for itself…
Although BCTS is supposed to represent 20% of the harvest on average, it has rarely met that 20% level over the past decade. The BCTS harvest fell to a low of just 10% of the overall provincial harvest in 2023. Given that the overall provincial harvest was also severely depressed, a BCTS harvest at 10% of total was a pretty dismal achievement.
The good news is that the BCTS harvest in 2024 turned a corner. Currently the BCTS harvest represents ~12% of the provincial harvest (based on a running 12-month moving total). BCTS harvest performance actually outperformed non-BCTS harvesting in 2024 and so far, is continuing to do so in the first quarter of 2025.
Despite the recent improvement, the overall issue for the forest sector is that an average BCTS harvest of 10 million m3 has shrunk to 4 million m3 today – that is big hole in log supply for many forest products manufacturers relying on BCTS wood. Based on the Ministry of Forests’ own “Forest Economic Multipliers,” a 6 million m3 drop in the BCTS harvest represents several thousand direct jobs lost.
According to the BC government’s recently announced BC Budget 2025, the outlook for BCTS harvest is positive. Although, the budget plan outlook for BCTS shows some improvement, the projections still indicate a significant gap between the historical harvest level (10 million m3+) and what is projected (just under 6 million m3). And at this time, without major changes, even achieving the BC Budget outlook might be optimistic (dark green line in chart below).
The motivation for increasing the BCTS harvest should be abundantly obvious with a forest industry desperate to source its log supply.
The Premier has admitted the BC forest sector is in crisis. Over two and a half billion board feet of lumber manufacturing capacity has shut down in the BC over the last two years (2023 and 2024). Not all of those mill closures are associated directly with BCTS, but when a predictable log supply is the central issue, it does not help that a strategic alternate source of logs from BCTS is not performing.
While the input to the BCTS Review is still being collected and recommendations yet to be formulated, the Minister has already started to act. At the recent COFI Convention, Minister of Forests, Ravi Parmar announced that BCTS was going to play a greater role in forest stewardship including more thinning etc. Stating that,
“feedback from the review has made it clear: BCTS is more than just a market-pricing system. It has the expertise and the tools to play a bigger role in active forest management and addressing climate change…”
I appreciate the Minister in his eagerness to move forward, but I can guarantee that “a bigger role” in forest stewardship for BCTS has not been the primary concern expressed by the industry. Rather the issue at hand has been entirely about fibre supply. Descriptions of that concern and calls for a BCTS review have been mentioned in several editions of the View From The Stump newsletter.
In my opinion, BCTS should be stepping back rather than stepping up on management activities with a key focus on getting out its cut. To be fair, the BCTS Review has not yet finished, so I am truly hoping that there is much more to come as “on point” announcements based on the Review by this ambitious Minister.
The following are the main problems supported by data. Proposed solutions follow afterwards.
PROBLEM #1 – Leaving Timber On The Table
At one time, BCTS was harvesting close to its full apportioned AAC. As shown in Table 1, a wider divergence started in 2018 between its full AAC and what BCTS calls its plan or “rationalized apportionment” of AAC.
At BCTS’ discretion, it lowers its AAC baseline for target development to account for known difficulties in achieving the full AAC. For instance, the mountain pine beetle fall down reducing practical timber supply versus out-of-date AACs due to lagging Timber Supply Reviews. Similarly, the impacts of new policy like old growth deferrals have not yet fully been reflected in new AAC determinations but the constraints of which have reduced timber availability for sale development.
The result is BCTS has a full apportioned AAC of 11.9 million m3, but a rationalized apportionment at 60% and an actual harvest of 33% of full AAC (see Table 1). Despite the various difficulties, those are glaring gaps that need to be addressed.
PROBLEM #2 – Getting Timber Sold
It is evident that from 2021/22 onwards that BCTS’ ability to sell timber became impaired as indicated by the growing gap between Actual versus Target volume sold. For the entire province, the actual volume sold in 2023/24 was 36% below target volume or a gap of 2.6 million m3. While the southern interior BCTS sales have improved, northern interior sales and to a lesser degree, coastal sales continued to be weak. There have definitely been challenges in specific BCTS business areas on developing sales.
Table 2 shows the individual business area timber sale performance in terms of the number of days since the last sale. (Data sourced from Woodx.com by Logit Analytics – a great way to track individual timber sales).
The Seaward business area on the mid-coast has not sold volume in well over a year, and very few sales over the past four years.
The Stuart-Nechako, a northern interior business area has had no sales in the prior three years; however, the freeze may be over with a few recent sales.
Also, Table 2 shows that several business areas release upwards of six sales all within the last fiscal quarter of the year suggesting the development of sales is lumpy, making it hard for manufacturers to secure log supply on an even flow basis.
PROBLEM #3 – Identity and Accountability
Often BCTS management areas are in the urban interface and have run up against local community opposition. If BCTS was a non-government entity, with more autonomy and flexibility to manage for these local conflicts, would the outcomes have been different?
Likewise, as an extension of government, BCTS gets caught between First Nations and government negotiations.
Given these shortcomings in performance, where is the accountability of the organization to its targets? To be clear, I do not think these problems are reflection of staff, but of the nature of the organization itself. BCTS originated as an arm’s length organization from government but has changed to become more integrated into government. Over time, the organization has transformed into a tool for implementation of government desires and policy (and therefore sensitive to political influences).
The evidence of that transition to an organization heavily influenced by a political master is clear by the list of BCTS Review goals. BCTS used to be purely about generating data points for the Market Pricing System (MPS).
Today the expectations are far broader, so is it too much? To be repetitive, at a strategic level, the forest sector is not complaining about the short comings in achieving the goals as presented for the BCTS review (listed below), rather it is frustrated about the inability to source logs:
Create forestry-sector growth, competition and diversification
Provide predictable and reliable market access to fibre
Diversify access to fibre for the manufacturing sector, including value-added facilities
Strengthen partnerships with First Nations and communities
Provide more jobs for contractors, workers and communities
Lead in innovative, sustainable forest management and silviculture practices
Generate profit for the Province and its partners
SPAR TREE GROUP PROPOSED SOLUTIONS
The data above shows that BCTS has not been able to sell the BCTS apportionment over the business cycle and it may be that it is not providing credible representative log price and cost benchmark data for the MPS given the auctioned volume has been well below its 20% target.
There are different pathways to achieve the review’s goals. One path is for BCTS to continue as the government led organization that exists today but adjusts to fit the burden being demanded of it (evolutionary change).
Alternatively, BCTS could undergo revolutionary change, which is a path I believe necessary to most effectively achieve the government’s/organization’s goals and provide log supply.
SOLUTION #1 – The same cutting permit challenges that exist for non-BCTS licensees also exist for BCTS managers. Addressing the several issues affecting permit development for non-BCTS licensees will help BCTS in developing timber sales.
SOLUTION #2 – If BCTS is not going to use its AAC, the differential between BCTS’ full apportioned AAC and rationalized apportionment should be redistributed as small area-based tenures to First Nations, communities and or woodlots. Maybe smaller, local area-based tenure holders can create the unique tailored solutions to challenges which have historically prevented BCTS from maximizing its rationalized apportionment against its full AAC.
SOLUTION #3 – While I am aware of the many efforts of BCTS to engage with local communities and accommodate, being a government organization has limited it’s success.
I believe that the BCTS organization itself should become an auctioning agent/service that collects data and runs the actual auction. Responsibilities and control of forest management and operational decisions, including the preparation of timber sales stewardship plans should be transferred to First Nations/local communities.
In turn, 100% of net revenues from the timber sales should be directed to the First Nation/local communities partnerships that take on this management role. Perhaps a business management/stewardship board, run by First Nations leadership and community representatives, could direct local management units.
Adoption of this solution addresses a number of key issues:
True economic reconciliation with First Nations;
Local control and accountability; and,
Local returns and reinvestment.
Assuming stewardship would be sensitive to the local interests, including indigenous and community values, BCTS could then track the true costs that non-BCTS licensees seem to be incurring on an increasing basis, which in turn could be reflected in stumpage rates.
Furthermore, like a community forest, the opportunity to better direct fibre to support local manufacturers may increase. If this approach leads to a maximization of the AAC, there would be more fibre supply available for all including value-add manufacturing. This may be a better approach than setting a percentage to the BCTS harvest as is done today with Category 2 and 4 etc...
The motivation for success in growing the log supply is driven by the consequences of failure: no BCTS auctioned timber sales would mean no thinning/logging, no revenues and no jobs – this is all provides tangible accountability. Government gets more representative data points for MPS stumpage calculation along with greater tax revenues hopefully based on a larger harvest volume.
I would suggest this solution presented here be piloted in a couple of locations across the province to learn best approaches.
The BCTS Review has an opportunity to blend the auction expertise of BCTS with the stewardship and motivation of First Nations and communities. We are seeing more and more evidence that community forests and several First Nations-held forest tenures cause greater stewardship outcomes and higher harvest relative to their AAC . BCTS needs revolutionary change to meet the forest sector’s expectations on performance. It will only achieve this by letting go to grow.
For more opinion and industry analysis, it’s all in the March 2025 View From The Stump newsletter.
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Written By David Elstone, RPF
Publisher, View From The Stump newsletter
Managing Director, Spar Tree Group Inc.