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Status Update On Indigenous Owned Forest Tenure

An Editorial Opinion – Right From The Stump, April 6, 2023


(A version of the following blog post was originally published as an article in the View From The Stump newsletter, March 2023, under the same title. If you are interested in reviewing the newsletter, please contact me at david@spartreegroup.com. Also, a complimentary full version of the October 2022 edition is available at viewfromthestump.com)

The influence of Indigenous’ interests on British Columbia’s natural resources sector is expanding at a rapid pace. The Blueberry River First Nation agreement announced in January was an indication of how that influence might potentially manifest. There is no doubt that Premier David Eby and his government are trying to increase Indigenous engagement, evidenced by the Premier’s recent ministerial mandate letters. Almost every second line in the Minister of Forest’s letter refers to First Nations in one form or another – hopefully it does not turn out to be just all talk…



The underlying motivation by the BC government driving this is the Declaration on the Rights of Indigenous Peoples Act.


One such measure of this influence comes from a vision expressed in the BC government’s Modernizing Forest Policy in BC intentions paper which conveyed a goal “to increase the amount of ‘replaceable’ forest tenure held by Indigenous peoples to 20% from the current level of approximately 10%.”


Much of the industry‘s supply chain relies on relationships with First Nations communities. As such, it is worthwhile to see how much change there has been in the amount of forest tenure held by Indigenous peoples since the Modernizing Forest Policy in BC was announced in June 2021.


TERMS: “Replaceable tenure” is a form of tenure that can be replaced or in other words is “ongoing.” It contrasts with “non-replaceable” tenure which has a fixed term, typically for five years. Replaceability is key to sustainability for the tenure holder.


Replaceable tenure can include both “volume-based” in reference to timber volume allocated from a Timber Supply Area (TSA) or “area-based” as in reference to a specified land base. There are a variety of types of tenures that are replaceable such as Tree Farm Licences (“TFL”), Forest Licences (“FL”) or First Nations Woodland Licences (“FNWL”) etc. Note FLs can also be issued as non-replaceable.


The amount or size of tenure is referred to typically in terms of the amount timber volume that can be sustainably harvested on annual basis as determined by the province’s Chief Forester. The term for this annual timber volume that could be harvested is the allowable annual cut or “AAC”.


PROGRESS: Spar Tree Group first assembled this information in October 2021 to estimate a baseline on how much tenure was held by First Nations. At that time, it was estimated that the total amount of AAC including non-replaceable tenure was 10.5 million m3 with the amount of replaceable tenure at 6.9 million m3.


The Spar Tree Group updated this data set in March 2023 to track progress on this government intention. Table 1 shows that in approximately two years, the total amount of tenure held by First Nations organizations decreased by 7% to 9.7 million m3, but the amount of replaceable tenure increased by 6% to 7.3 million m3.


To be honest, I was surprised by this result as I thought this tenure volume would have increased by a greater amount given the government commitment; however, before jumping to conclusions let’s take a closer look.



First Nations Woodlands Licences (FNWL): Since June 2021, only three new FNWLs have been created, adding 65% or 552,082 m3 of AAC. Two of the three were added between June and September 2021, but the government data set used to create the October 2021 analysis had not been updated at that time to reflect those additions. Only one FNWL has been added since September 2021, and technically, it was an expansion of an existing FNWL. Based on a government announcement in July 2022, the Lheidli T’enneh First Nation negotiated an increase to their existing FNWL from 25,000 m3 to 380,573 m3 – the largest FNWL to date. Oddly, this expanded FNWL was not shown in the government data file available at the time of this analysis.


Woodlots’ AAC held by First Nations increased by 24%, but the incremental volume is relatively small.


Community Forest Agreements with First Nations partners have essentially not increased in number since the government announced its intentions to increase community participation, although AACs have been changed for various reasons.


Forest Licences’ (replaceable) volume has decreased largely due to AAC reductions for individual Timber Supply Areas.


First Nations Forest Licences’ AAC has increased 546% or 474,709 m3. In the October 2021 analysis there was just five of these types of forest licences, whereas today there are twenty. Unfortunately, I cannot tell if this is because of government effort or if government staff have simply decided to re-label some FLREPs (Forest Licences Replaceable) to FLRFNs (Forest Licences (Replaceable) First Nations and FNRFLW (FN Replaceable (RFL/FNWL).


Bottomline – overall tenure held by First Nations has decreased, but the amount of replaceable type tenure held by First Nations has increased. With ongoing reductions to AAC in various regions of the province, comparing the absolute totals may not be the best way to monitor progress in the government’s intentions to double the replaceable tenure held by Indigenous peoples.


TECHNICAL PROBLEM: One of the main issues with the Modernizing Forest Policy BC document is the nonspecific nature of its intentions. The document states an intention to increase the amount of replaceable forest tenure held by Indigenous peoples from 10% to 20% but nowhere does the government state what this amount is in reference to. As noted above, back in October 2021 I had tallied replaceable AAC held by Indigenous peoples (across all types of replaceable licences, and regardless of percentage of ownership) as 6.9 million m3. What was this 6.9 million m3 10% of? The language of the intentions paper, if read logically, would suggest 6.9 million m3 of replaceable tenure was 10% of all replaceable tenures. However, that would suggest replaceable tenure in total was close to 69 million m3, of which, total replaceable tenure was not that high.


I am left to assume that 10% replaceable was really meant to be 10% of total AAC (Timber Supply Areas, Tree Farm Licences, Woodlots, FNWLs, Community Forests, etc.). If I am wrong, please let me know.

Factoring in the ongoing decreases to provincial AAC is critical given the proverbial “pie” is shrinking. The following table shows the replaceable tenure held by Indigenous peoples relative to total BC AAC. In October 2021 that percentage was 10.9% and has since increased to 12.2% in March 2023, suggesting modest progress in the government objective.



POTENTIAL TENURE DISPOSITIONS: Over the last year and half there have been two significant developments in regard to industry agreeing to sell or dispose of tenure to First Nations. The first is Canfor’s announced intentions to sell its Mackenzie area tenure (as of February 2022) to two local First Nations. The second is due to Interfor’s strategic exit of the BC Coast, the company has arranged potential tenure transactions with several First Nations which are currently being advertised for public commentary.


Assuming all these developments succeed in completion, the estimate of replaceable tenure held by First Nations increases to 15.4%.


This is an important observation because in November 2021 the BC government legislated changes to the Forest Act (via Bill 28) to enhance legal mechanisms to allow tenure redistribution. If those pending tenure dispositions occur, it would mean that industry is moving ahead with tenure diversification without government intervention.


Increasing the amount of replaceable forest tenure held by Indigenous peoples should improve economic self-determination for First Nations and increase their control over traditional territories. While the government’s vision for Indigenous held replaceable tenure has still to be fully achieved, it is apparent that the rising influence of First Nations extends well beyond that objective. As I have written many times before, if your business does not have a relationship with local First Nations, you may want to investigate how to change that, because without such a relationship, your business’ supply chain may be at risk.


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Written By David Elstone, RPF

Publisher, View From The Stump newsletter

Managing Director, Spar Tree Group Inc.

david@spartreegroup.com


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