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2006/6/30
Those involved with the timber industry are cautiously optimistic the new market-based pricing system, which starts on July 1st in the Interior, will be good for both industry and workers, but admit only time will tell how much difference the new system will make.
“This is a big change for the business,” says Jim Shepherd of Canfor. “We’ve had biology issues with the Pine Beetle. We’ve had a changing market environment. So all this is intended to be encompassed in the new stumpage system. Market prices will apply to log and timber value. So if that is the way it works, it’s a good thing for Canfor- it’s a good thing for industry in the north.”
Shepherd says there may be some trial and error in setting rates for different timber, but it should progress quickly since the industry is well established and knows the value of the different timber here. “I don’t think we’re going to be far off the mark right off the starting gate here.”
Roy Nagel, of the Central Interior Loggers Association, is hoping the new system will be good for their members, but is adopting a wait-and-see attitude. Nagel says the change has been adopted mainly in an effort to convince the U.S. that B.C. timber isn’t subsidized.
“It’s a step in the right direction, but no one knows for sure how good it will be,” says Nagel. “The old system had its quirks, but it was market-responsive in its own way.”
Nagel is hopeful the new system will iron out the “peaks and valleys” that affect workers. He explains it’s not uncommon for the price of timber to vary by up to $5 a cubic metre from quarter to quarter, so, naturally, mills buy more when price is down, and if they have a good supply on hand, will have less hauled in when the price is high.
It’s anticipated the new market-based system may decrease these quarterly fluctuations to only $1-$2 per cubic metre, says Nagel, but they will have to wait and see if these estimates are right. Nagel notes that some regions have only one main timber purchaser, such as Canfor in our area, and it’s still unknown how this will impact the new market-based pricing system.
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