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Aspects of forest resource use policies and administration in British Columbia Kelly, Elizabeth Fay 1976

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ASPECTS OP FOREST RESOURCE USE POLICIES AND ADMINISTRATION IN BRITISH COLUMBIA by ELIZABETH PAY KELLY B.A. (H o n s ) , U n i v e r s i t y o f Tasmania, 1967 A THESIS SUBMITTED I N PARTIAL FULFILMENT OP THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n the Department o f P o l i t i c a l S c i e n c e We a c c e p t t h i s t h e s i s as c o n f o r m i n g t o the r e q u i r e d s t a n d a r d . THE UNIVERSITY OF BRITISH COLUMBIA J a n u a r y , 1 9 7 6 . In p r e s e n t i n g t h i s t h e s i s in p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced deg ree at the U n i v e r s i t y o f B r i t i s h C o l u m b i a , I ag r ee t ha t t he L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r ag ree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r po s e s may be g r a n t e d by the Head o f my Depar tment o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Depar tment o f -c-^ e. The U n i v e r s i t y o f B r i t i s h Co l umb i a 2075 Wesbrook Place Vancouver, Canada V6T 1W5 /^U .<3^<-X/ /97G i i ABSTRACT Having made the fundamental assumption t h a t p o l i c y a d m i n i s t r a t i o n can be viewed as a p r o c e s s t h e q u e s t i o n i s t h e n r a i s e d : I n what ways and t o what ex-t e n t does t h e a d m i n i s t r a t i v e p r o c e s s a f f e c t f o r e s t r e s o u r c e use p o l i c i e s i n B r i t i s h Columbia? I t i s n o t e d t h a t the t h r e e b a s i c p o l i c y p r i n c i p l e s have been s i n c e e a r l y t h i s c e n t u r y : ( i ) p u b l i c ownership o f f o r e s t l a n d s ; ( i i ) a r e t u r n t c the P r o v i n c i a l T r e a s u r y o f a p r o p o r t i o n o f the w e a l t h o f the f o r e s t s as i t a c c r u e s ; and, ( i i i ) e x t e n s i o n o f t h e u s e f u l l i f e o f the f o r e s t s f o r the b e n e f i t o f f u t u r e g e n e r a t i o n s . U s i n g as a p r i n c i p l e d a t a source a l a r g e body o f s t a t u t e s , a d m i n i s t r a t i v e documents and e v i d e n c e and r e p o r t s o f com-m i s s i o n s o f i n q u i r y accumulated d u r i n g the p a s t s e v e n t y - f i v e y e a r s the t h e s i s f o c u s s e s on t h e a d m i n i s t r a t i v e p r o c e s s w i t h r e s p e c t t o t h r e e m a jor a s p e c t s of f o r e s t r e s o u r c e p o l i c i e s i n B r i t i s h C o lumbia. They a r e : l a n d t e n u r e systems, s u s t a i n e d - y i e l d management of f o r e s t a r e a s and r o y a l t y and stumpage assessment methods. The r e s e a r c h c o n f i r m s the v a l i d i t y o f the b a s i c a s s u m p t i o n . I n response t o the above q u e s t i o n s e v e r a l major p o i n t s are made. P r o v i n c i a l l a n d ownership policies and their administration have been significant in directing forest resource use adminis-tration and have had the affect of obscuring forest resource use policy principles themselves. With re-spect to the sustained-yield management programme in British Columbia the administrative process has affected forest resource use policies by giving administrative definitions to some of the basic terms used in the i n i t i a l policy formulations. In the area of royalty and stumpage assessments methods i t was found that administrative f e a s i b i l i t y , which has been especially influenced by forest technology, has been a significant factor in determining the ends actually pursued by the adminis-trative system and thus formally stated policy objectives have been modified. Overall the affect of the adminis-trative process on forest resource use policies i n British Columbia has been widespread and far reaching. iv CONTENTS Chapter Page ABSTRACT . ABBREVIATIONS I AN OVERVIEW 1 The Approach F o r e s t s and t h e F o r e s t I n d u s t r y i n B r i t i s h Columbia R e f e r e n c e L i t e r a t u r e I I LAND TENURE POLICIES AND SYSTEMS 20 I I I SUSTAINED YIELD MANAGEMENT OF FORESTS . ki IV THE ADMINISTRATION OF ROYALTY AND STUMPAGE 6£ V CONCLUSION 82+. VI BIBLIOGRAPHY 92 ( i i ) ABBREVIATIONS The following abbreviations are used in the thesis: cunit - A measure of wood volume: 100 cubic feet. M fbm - A measure of lumber recoverable from logs: one thousand foot board measure. The 197k. Task Force on Timber Disposal Reports I, II and III, have been referred to respectively as: Pearse, Crown Charges for Early Timber Rights Pearse, Timber Appraisal Pearse, Land Tenure i n British Columbia ( i i i ) I AN OVERVIEW The Approach Today natural resource use po l i c y decisions are important to governments, i n d u s t r i a l corporations and com-mercial enterprises the world over. They are also of increasing concern to l o c a l i n t e r e s t groups and private individuals as the p o l i c i e s have a direct bearing on many of t h e i r s o c i a l and economic a c t i v i t i e s as well as i n the less tangible "quality of l i f e " issues with which they are concerned. Since the days of the f i r s t European s e t t l e r s i n B r i t i s h Columbia i t s natural forests have affected settlement patterns, economic development and a g r i c u l t u r a l a c t i v i t i e s throughout the Province. The implementation of multiple use p o l i c i e s as guidelines f o r forest resource use, currently advocated by many environment oriented i n t e r e s t groups as well as by the B r i t i s h Columbia Forest Service, ^ indicates that forest p o l i c i e s , although they may not con-tinue to be i d e n t i c a l with the ones discussed here, w i l l continue to have widespread significance i n many Pr o v i n c i a l communities f o r some time to come. 1. B, C. Forest Service, Basic Course i n Forest Administration (Queen's Pr i n t e r : V i c t o r i a , B.C.) 197i|.,p.ll9. - 2 -Publ ic p o l i c i e s are not simply or instantaneously a r r ived a t . P o l i c y making i s a dynamic process invo lv ing the i n t e r a c t i o n of actors i n the p o l i t i c a l system; i t i s the process by which desirable funct iona l re la t ionships between actors are decided and the funct ional norms es tab l i shed . Po l i cy admini s t ra t ion , whether viewed d i s c r e t e l y orias an i n t e g r a l part of p o l i c y making, may be, and commonly i s , seen as a process a l s o . In t h i s thes i s the administrat ive process i s regarded as the i n s t i t u t i o n a l behaviour designed to be instrumental i n br inging about p o l i c y demands, A c r u c i a l consequence of seeing p o l i c y administrat ion i n th i s way i s the expectation that the administrat ive process w i l l , i n a l l except the most uninterest ing cases, introduce s i g -n i f i c a n t features to the p o l i c y not ant ic ipated when the p o l i c i e s were f i r s t formulated.^" Such an expectation i s now, 2 , For example, a process approach to p o l i c y making i s used by contr ibutors to I r a Sharkansky (ed.) P o l i c y Analys i s i n P o l i t i c a l Science (Markham: Chicago) 1972 and a t h e o r e t i c a l analysis i s undertaken by Y, Dror i n Publ ic Policymaking Re-ex- amined ( E l s e v i e r : N .Y . ) 1 9 6 8 . Both texts have comprehensive b i b i l i o g r a p h i e s which l i s t references to many other publ icat ions that use the process model to study p o l i c y admini s t ra t ion . 3 . Probably the best known author on the administrat ive process i s Herbert A , Simon. His book Adminis trat ive Behavior ( f i r s t published i n 19l|-5) i s s t i l l widely used to introduce students to the concept of an administrat ive process, [(.. This view i s supported i n studies such as P .Se l zn ick , T . V . A . & the Grass Roots, (Univ. of C a l i f , Pres: Berkeley, C a l i f . ) 19^9 and S.M. Lipset Agrar ian Socia l i sm (Univ. of C a l i f . Press : Berkeley C a l i f . ) 1 9 5 0 . - 3 -a f ter several decades of p o l i c y s tudies , often taken for granted (espec ia l ly i n l i g h t of the re la ted view that adminis trat ion i s not discrete from p o l i c y making) yet the expectation c l e a r l y leads to a straightforward question when a s o c i a l s c i e n t i s t f i r s t approaches a p o l i c y area such as forest resource use i n B r i t i s h Columbia. The question i s : In what ways and to what extent does the administrat ive process affect forest resource use p o l i c i e s i n B r i t i s h Columbia? This thesis i s about t h i s quest ion. Even though the content of t h i s paper may be expected to be of in teres t to students of publ ic adminis-t r a t i o n and to s o c i a l s c i e n t i s t s more genera l ly , the question s t i l l remains as to whether a s o c i a l s c i e n t i s t can l e g i t i m a t e l y concern herse l f w i t h the subject matter i t covers. No doubt the quecy i s based on the b e l i e f that the s o c i a l s c i e n t i s t i s not f a m i l i a r wi th much of the technica l terminology the fores t ry graduate has become cognizant wi th nor does she have the f i r s t hand knowledge of forest condit ions that the fores t ry f i e l d worker has. Cer ta in ly both the p r a c t i c a l and academic knowledge of those acknowledging the forest resource to be t h e i r f i e l d - k -of direct i n t e r e s t should not be underestimated however, research may focus on administrative aspects of forest resource use p o l i c y and i t i s from th i s perspective the thesis i s written. The s o c i a l s c i e n t i s t needs an under-standing of basic f o r e s t r y terminology to undertake such a study. But what i s needed also, and perhaps moreso, i s the a b i l i t y to handle her own tools of analysis as she searches out the purposes and peculiar c h a r a c t e r i s t i c s of forest resource use p o l i c y administration i n B r i t i s h Columbia through the decades of t h i s century. I f a l l goes well the s o c i a l s c i e n t i s t studying forest resource use p o l i c y w i l l not only give new insights and s e n s i t i v i t y to persons d i r e c t l y associated with forest resource use p o l i c y making and i t s administration, but also provide other s o c i a l s c i e n t i s t s with an entre to an i n t e r e s t i n g and important p o l i c y area. In B r i t i s h Columbia the two chief actors involved i n forest resource use p o l i c y making and i t s execution have been the P r o v i n c i a l Forest Service acting on behalf of the government on the one hand and private industry concerned with the e x p l o i t a t i o n of timber from P r o v i n c i a l forests on - 5 -the other. The basic p r i n c i p l e s underlying the p o l i c i e s were determined r e l a t i v e l y early t h i s century. They are: (i ) public ownership of forest land; ( i i ) a return to the P r o v i n c i a l Treasury of a pro-portion of the wealth of the forests a s i i t accrues; ( i i i ) extension of the useful l i f e of the forests f o r the benefit of future generations. These p r i n c i p l e s have been stated frequently and authori-t a t i v e l y ; t h e i r legitimacy has been reinforced by t h e i r frequent recurrence i n public i n q u i r i e s and the apparent adherence to them by a wide-cross section of the P r o v i n c i a l community.-' However, what constitutes the best possible means for achieving these ends has not been i d e n t i f i e d so p r e c i s e l y 5 . See f o r example, F i n a l Report of the Royal Commission of Inquiry on Timber and Forestry, 1909-1910. Fred Fulton (chair-man), (King's P r i n t e r : V i c t o r i a , B.C.) 1910, pp.Dl5-20; Gordon McG. Sloan, Report of the Commissioner, Relating to the Forest  Resource of B r i t i s h Columbia, 19*4-5« (Kings's Prinfeer: V i c t o r i a . B.C.) 19*4-5, p.0.90; and also Task Force on Crown Timber Disposal, Forest Tenures i n B r i t i s h Columbia. P. Pearse (chairman) V i c t o r i a , B.C., December 1971)-, Introduction. A contrary opinion on the introduction of a sustained-yield programme i s recorded i n F. D. Mullholland, The Forest Resources of B r i t i s h Columbia, (Dept. Lands and Forests, V i c t o r i a , B.C.) 1937. - 6 -nor does there appear to be any substantial consensus of opinion on the matter. Instead the picture is one of numerous legislative enactments and frequent changes of administrative regulations as attempts are made to bring about the desired policy outcomes. Thus the basic policy principles or overall objectives although clearly stated apparently have not been easy to achieve. The study centres on several major, i f not the major, facets of forest resource use policy in British Columbia: land tenure systems, sustained-yield manage-ment of forest and, royalty and stumpage assessment methods. Chapter Two outlines the historical"development of a number of land tenure systems that have been introduced in the Province during the past seventy-five years. The purpose of the chapter is to show the significance of land tenure administration in developing functional forest resource use policies in the Province. The chapter follow-ing has as i t s focal point the sustained-yield management of natural forests in British Columbia. It looks at the way the administrative process has brought functional mean-ings and definition to the terms and concepts of a sus-tained-yield policy. Chapter Pour discusses methods of making royalty and stumpage payment assessments. The discussion i s intended to show how the administrative process i s hampered by general economic conditions and especially product technology in i t s bid to achieve the objectives spelled out i n policy statements. The con-cluding chapter identifies the chief points made in the thesis and sums i t up by answering the question raised above, namely: In what ways and to what extent does the administrative process affect forest resource use policy in B r i t i s h Columbia? Forest and the Forest Industry in B r i t i s h Columbia. In 1912 the Forest Branch of the Department of Lands reviewed the wealth l i k e l y to accrue from British Columbia's forest resource. It was estimated that Provin-c i a l forests amounted to "not less than 100,000,000 acres of forest land" and "a total stand of commercial timber of not less than 3 0 0 b i l l i o n /hoard? feet", probably much more. At that time, the lumber output of British Columbia was about V% b i l l i o n feet per year and i t was anticipated that i t rwould take 250 years to use up the mature timber 7 then standing. Income from forest sources was regarded as 6. " Bri t i s h Columbia Department of Lands, Forest Branch Annual Report, for 1912, p.5. 7. op.cit. - 8 -"the mainstay of the Provincial Treasury"; i t was contributed at the rate of one dollar in every four. An air of optimism prevailed regarding the u t i l i z a t i o n of the forest resource, "The inevitable progress of the industry", wrote H. R. MacMillan, Chief Forester, "combined with the increased supervision that a larger forest service can give, w i l l continue ,,, to enlarge the forest revenue year after year, while the natural decrease in land sales, the making of numerous timber sales, and the effective protection of timber lands from f i r e , should see Provincial finance based to an increasing extent on a great assured income from the woods." A major complaint he made was that government expenditure on the forests was too l i t t l e - one tenth of the revenue derived from the forests. A major concern was the fear of swamping the market i f exploitation of the forests were not controlled. In the years following the f i r s t Annual Report of the Forest Branch the outlook was not always so bright. Sometimes the prices rose but slumps in timber sales and forest products resulted in the Forest Branch becoming involved in the marketing of forest products in addition 8. i b i d . p.3^-. to i t s responsibilities for forest protection, forest inventory compilation and silviculture, assumed i n i t i a l l y . During the First World War, forests were found to be of national significance as a source of raw materials for the manufacture of numerous commodities required for defence. Largely in recognition of this, H. N. Whitford and Roland D. Craig were appointed by the Canadian Com-mission on Conservation of Forests, to look into British Columbia's forest resource potential. Their task was to make an assessment of the available supply of timber in the Province. Results of their study revealed that much of B r i t i s h Columbia's timber was at high altitudes or in unfavourable s o i l conditions and therefore could not be included in an account of commercially valuable timber. They estimated that of the total land area of the Province ie, 3 5 5 , 8 5 5 square miles, some 200,000 square miles was incapable of producing timber of commercial value - some lIi-5,000 square miles was above the merchantable timber line and another 55,000 square miles had s o i l too rocky or, the forests originally there had been so completely destroyed by f i r e they could see no hope of natural re-establishment for centuries to come.7 They suggested a 9. H.N. Whitford and Roland D. Craig, Forests of Briti s h Columbia, Commission of Conservation, Canada, Committee on Forests, Ottawa, 1918, p.7. - 10 -more widespread in t roduct ion of pulp m i l l s and wrote that better logging equipment would increase the amount of timber that could be included i n a commercial inventory . Whitford and Craig ' s report of the previous f i v e years (1912 - 1917) was of a cut of 250 b i l l i o n board f ee t . They bel ieved the P r o v i n c i a l forests could carry a cut f i v e times that amount without ser ious ly deplet ing c a p i t a l s tock. Fol lowing the Second World War B r i t i s h Columbia forests and forest indus tr ie s were seen to be areas fo r absorption of returning war veterans seeking employment. With t h i s i n mind, C. D. Orchard proposed i n I9I4J4. that 632 permanent and 1105 seasonal workers could be employed by the B. C. Forest Serv ice , p a r t i c u l a r l y i n re fores ta t ion and nursery pro jec t s . I t was h i s b e l i e f tha t : "Forest adminis trat ion offers one of the best avenues of r e h a b i l i -t a t i o n i n work of immediate and l a s t i n g va lue , i n both permanent and seasonal employment.""^ Gordon Sloan i n h i s study, The Forest Resources  of B r i t i s h Columbia, made a broad assessment of the con-t r i b u t i o n u t i l i z a t i o n of the forest resource makes to 10. i b i d , p.9. 11. C.D. Orchard, "Proposals f o r R e h a b i l i t a t i o n Employ-ment i n Forestry i n B r i t i s h Columbia", i n The Canadian Forestry  S i t u a t i o n , Reports and Papers presented to. the 3&th Annual Meeting of the Canadian Society of Forest Engineers, 19kh> pp. 29-30. - 11 -P r o v i n c i a l revenues. As Chairman of the P r o v i n c i a l Government Royal Commission i n 1956, he wrote as f o l l o w s : The forest industr ies contribute d i r e c t l y to P r o v i n c i a l revenues by way of taxes, r e n t a l s , r o y a l t i e s , stumpage and fees . Other contr ibut ions are manifold and swe l l the P r o v i n c i a l coffers by payments of sales taxes and the P r o v i n c i a l share of Federal corporation and personal income taxes . I t i s estimated that the forest industry i s res-ponsible for the payment of about one-third of the sales tax or approximately $38,000,000 and an equal percentage of the $50,000,000 received under the terms of the Federal t ax-renta l agreement. I t would thus appear that from these sources alone approximately $55,000,000 annually of d i rec t taxa-t i o n can be a t t r ibu ted d i r e c t l y or i n d i r e c t l y to the forest i n d u s t r i e s . Di rec t forest revenues from r o y a l t y , stumpage, r e n t a l s , land taxes and such l i k e amount to about $28,000,000 a year . When i t i s remembered that more than 60,000 people are employed i n t h i s i n -dustry who are paid over $200,000,000 i n wages and s a l a r i e s annual ly , i t i s impossible to ca lculate wi th any prec i s ion the i n d i r e c t effect that t h i s wealth has upon the P r o v i n c i a l economy and revenue when measured i n terms of the v e l o c i t y i n which money "turns over".12 By 1973* publ ic revenues from appraised timber amounted to $230 m i l l i o n or 12 per cent of P r o v i n c i a l 13 revenue, A summary, of the B r i t i s h Columbia forest i n -dustry published i n 1973 ind ica ted the s igni f i cance of 12. Gordon McG. Sloan, The Forest Resources of B r i t i s h Columbia 1956, Report of the Commissioner, V i c t o r i a , 1957, v o l . 2, p.2+17. 13. Annual Report, 1973, Appendix A , p . 120 f f . - 12 -the forest industries to Br i t i s h Columbia's economy. It was stated that: the net selling value of shipments of the B r i t i s h Columbia forest industry was $1.8 b i l l i o n i n 1972; that the forest industry accounts for approxi-mately I4J4. per cent of the value added by a l l goods pro-ducing industries in the Province and, that Br i t i s h Columbia harvests h^> per cent of a l l roundwood cut in Canada. The B. C. Forest Service expenditures were $lj.3»8 million in the f i s c a l year 1970-71. The major expenditures of the Service were $9.8 million for f i r e suppression, $6.8 million for management, protection and overhead and, a further $3«7 million for reforestation. In 197i> con-tinuously employed personnel i n the Forest Service totalled 2,391 while 5,513 were employed on a seasonal basis i For the year 1970, the total number of people employed in British Columbia was 810,000; of these, 225,000 owed their livelihood to the forest industry. Federal and Provincial revenue from the industry totalled $397 million in 1969, Provincial taxes i n that year amounted to $186 million and Federal taxes to $10lj. million. In the area of foreign trade, forest product exports were valued at $1.1). b i l l i o n in 1971* with the United States importing 6I4. per cent and the European - 13 -Economic Community 11 per cent of the total export. Reference Literature A rather voluminous body of statutes, adminis-trative documents and, evidence and reports of commissions of inquiry exists relating to Br i t i s h Columbia's forest resource - this has been the principle source of data for the study. The current Forest Act i s a lengthy document that has been ammended on a number of occasions. The Forest Service (or, as i t was originally termed the Forest Branch of the Department of Lands) has published an Annual  Report since 1912 which was found to be quite helpful in research for the thesis. Also several secondary works have been referred to. These and personal interviews with Forest Service personnel have provided an overall perspective as well as confirmation of some factual details that were found confusing i n the literature. The administrative process as institutional be-haviour i s not easily studied but Royal Commission inquiries that are frequently undertaken as reviews of the administra-tive process although having obvious limitations as impartial li).. F.L.C. Reed and Associates, The British Columbia Forest Industry: i t s direct and indirect impact on the  economy, Report prepared for the Department of Lands, Forests; and Water Resources, 1973, PP« i - i v . - 111. -documentary evidence give revelations and evaluations of the administrative process that are invaluable. I t i s i n t e r e s t i n g to note that several major i n q u i r i e s into the forest resources of B r i t i s h Columbia have taken the form of Royal Commissions and, the three themes making up the focus of t h i s paper are recurring themes i n Commissioners 1 questioning. The themes are given a d i f f e r e n t emphasis each time. Their frequent and thorough study has been necessitated by the many adjust-ments i n administrative behaviour that have taken place i n response to socio-economic changes which have affected forest i n d u s t r i e s . This i s p a r t i c u l a r l y true with respect to technological developments i n logging operations 1 and, to factors of market demand. ' During 1909-10, Fred Fulton, the Chief Commis-sioner of Lands and Acting Attorney-General, chaired a P r o v i n c i a l Royal Commission of Inquiry into timber and fo r e s t r y i n B r i t i s h Columbia. The inquiry was deemed necessary " i n the i n t e r e s t of the Province" and, was to cover aspects "concerning the timber resources of the Province, the preservation of f o r e s t s , the prevention of forest f i r e s , the u t i l i z a t i o n of timber areas, a f f o r e -s t a t i o n , and the d i v e r s i f i c a t i o n of tree growing, and generally a l l matters connected with the timber resources - 1 5 -of the Province".1'' Pulton noted in his report that "the leasehold system was primarily designed to provide sawmill owners with definite sources of supply, at cheap rates" while the needs of small operating loggers were met by granting licences to cut timber at chosen places. He commented on adoption of principle of "reservation of a share in the increment of value of standing timber, as i t should accrue", with the claim that i t would rightfully benefit the people of the Province. "The value of standing timber in Br i t i s h Columbia is destined to rise to heights that general opinion would consider incredible today", he wrote. Moreover, "under careful management heavy taxation need never f a l l upon the population of the Province" because of i t s forest wealth. The chief area of attention of Commissioner Gordon Sloan i n 191+5 was bound up i n the question of whether the Province was "to follow a system of unrestrained and unregulated forest exploitation, regarding the forests as a mine to be exhausted of i t s wealth"; or, was i t "to move to a system based on the concept of.sustained yield, 15. Final Report of the Royal Commission of Inquiry  on Timber and Forestry, 1909-1910» Fred Fulton (Chairman) King's Printer, Victoria, 1910, p. D 2 7 . 16. '; i b i d , p. D20. - 16 -wherein the forest was to be considered as a perpetual ly 17 renewable asset l i k e any other vegetable crop?" Prov-i n c i a l forest resources i n 191+5 were v i s u a l i z e d as "a * s lowly descending s p i r a l " . He bel ieved the Province must "change over from the , , . system of unmanaged and unregulated l i q u i d a t i o n of . . . forested areas to a planned and regulated p o l i c y of forest management, leading eventually to a pro-gramme ensuring a sustained y i e l d from a l l . . . /the_7 pro-18 ductive land area" , Sloan out l ined the means by which the objectives of a sus ta ined-yie ld p o l i c y would be achieved* His l i s t inc luded : adoption of improved f i r e protect ion measures, replant ing denuded areas, in t roduct ion of logging methods that would ensure regeneration, new systems of taxat ion and tenure and administrat ive reform as w e l l as 19 education and research. In January 1 9 5 5 , Sloan was once again appointed Royal Commissioner, t h i s time to examine the status of the forest industry i n B r i t i s h Columbia, His terms of reference stated that " a l l phases and aspects of the forest resources 1 7 . S loan, 1 9 5 6 , V o l . 1, p . 3 . 1 8 , Gordon McG. Sloan, Report of the Commissioner  Relat ing to the Pores.t Resources of B r i t i s h Columbia, . 1 9 1 1 - 5 , King ' s P r i n t e r , . V i c t o r i a . 19Zi5.. P . 1 2 7 . 19 i b i d , pp.128 - 17 -of the Province and the legislation thereto" were to be looked into. His inquiry was to include, but was not limited to, the following subjects: -1. The extent, nature and value of the forest resources: 2. The conservation, management and protection of these resources: 3. The establishments of forest yield on a continuous production basis in perpetuity: Ij.. Porestation and research: 5. Forestry education and instruction: 6. The u t i l i z a t i o n of the forest crop and i t s relationship to employment and social conditions: 7. The use and management of forest and wild lands for parks, recreation, grazing and wild l i f e in relations to forest administration: 8. The relationship of the forest to s o i l conservation: 9. The maintenance of an adequate forest cover with a view to the regulation of moisture run-off and the maintenance of the levels of lakes and streams: 10. Forest finance and revenues to the Crown from forest resources: 11. Acquisition of rights to forest lands and timber and the tenure of such rights, including existing rights and tenures, and the extent to which adequate and proper exercise of the rights there-under i s now made: 12. Legislation and amendment thereof: 13. The relevant facts in relation to any matter that in the opinion of the Commissioner i t is necessary to inquire into in order to carry out effectually the duties imposed upon him herein.20 Sloan's 1956 report is a comprehensive and detailed document in two volumes. There he has given a thorough account of 20. Sloan, 1956, pp. 1-2. - 18 -timber land tenure systems i n Bri t i s h Columbia including a summary of their historical development and, an evalu-ation of their influence on the forest industry. He also covers questions concerning finance and sustained-yield policies. His comments and conclusions, especially with regard to items 3, 10 and 11, have been directly referred to, in the main text. A further major Provincial inquiry into similar matters was carried out by the 1974 Task Force on Crown Timber under the leadership of Peter Pearse. The terms of reference allowed i t to cover wide ground and the findings were reported in three papers published through the year. It is relevant to note that the Task Force had included in i t s terms of reference, to: 1. Investigate the policies, legislation, procedures practices governing the disposal of Crown timber in the Province, and in particular: - the provisions for royalties, stumpage charges, rentals and other payments for public timber and for rights to harvest public timber: - the form of rights and tenures governing the acquisition of rights to public timber and to public forest land ... 2. Formulate recommendations for changes in the arrangements governing the above matters with a view to protecting the public interest in the Crown forest resources, and i n particular toward ensuring: - 19 -- that the f u l l potential contribution of the public forests to the economic and social welfare of British Columbians is realized, recognizing the diverse commercial wood products, recreations and wild l i f e benefits, domestic stock grazing and environmental values of forest resources. that the payments made for Crown timber reflect the f u l l value of the resources made available for harvesting costs, forestry and development costs and profits; and that the marketing arrangements for timber products permit their f u l l value to be realized. - that the health and vigour of the forest industry in the Province be maintained. - that good forest management in terms of harvesting practices, protection and conservation, reforest-ation and silviculture is provided for. 3. ... submit an interm report ... with recom-mendations for improvement in the arrangements governing the Crown charges for timber harvesting " rights on Timber Leases, Timber Licences. Pulp Leases, Pulp Licences and Timber. Berths.^1 The themes of the three main chapters of this paper are, therefore, matters of considerable importance to Bri t i s h Columbia. They have been for some time in the past and i t appears they w i l l continue to be for some time in the future as evidenced by the fact that the current Royal Commission Inquiry being conducted by Peter Pearse i s once again inquiring into many of the same administrative aspects of Provincial forest resource use policy. 2 1 . Task Force on Crown Timber Disposal, Crown Charges for Early Timber Rights, P. H. Pearse (chairman; Victoria^ B.C., February 1974, Appendix A, pp. 51-52. II LAND TENURE SYSTEMS AND FOREST RESOURCE USE POLICY Land t e n u r e has been an a r e a o f s i g n i f i c a n t a d m i n i s t r a t i v e a c t i v i t y i n the e x e c u t i o n o f f o r e s t r e s o u r c e use p o l i c i e s i n B r i t i s h Columbia. T h i s c h a p t e r g i v e s an o u t l i n e o f some h i s t o r i c a l developments i n l a n d t e n u r e admin-i s t r a t i o n and i n so d o i n g r e v e a l s t h e g r e a t d i v e r s i t y i n r e g u l a t i o n s and c o n d i t i o n s p e r t a i n i n g t o f o r e s t l a n d t h a t have been e f f e c t e d t h r o u g h t h i s c e n t u r y . The d i s c u s s i o n f o l l o w i n g shows how the a d m i n i s t r a t i v e p r o c e s s has r e l i e d v e r y h e a v i l y on the l a n d t e n u r e system t d e x e r c i s e c o n t r o l over use o f the f o r e s t r e s o u r c e . A l t h o u g h t h e purpose of the a d m i n i s t r a t i v e c o n t r o l has been e x p l i c i t l y s t a t e d as b e i n g the p u b l i c owner-s h i p o f f o r e s t l a n d the methods used f o r b r i n g i n g i t about have tended t o produce s e v e r a l u n d e s i r a b l e outcomes and o t h e r p o l i c y o b j e c t i v e s have been t h w a r t e d . A l i e n a t i o n o f Crown l a n d s i n t h e Colony o f Van-couv e r I s l a n d began i n 1858. At t h a t t ime l a n d c o u l d be a c q u i r e d by purchase from the government f o r the n o m i n a l p r i c e of t e n s h i l l i n g s p e r a c r e . The s a l e i n c l u d e d the t r a n s f e r of r i g h t s t o a l l t i m b e r on t h e l a n d . 1 However, i n l86f? an i m p o r t a n t s t e p was t a k e n w h i c h r e c o g n i z e d i n p r i n c i p l e t h a t the P r o v i n c e s h o u l d r e t a i n an i n t e r e s t i n and c o n t r o l o v er 1. W h i t f o r d and C r a i g , p. 8 l . - 21 -the g r e a t e r p a r t o f i t s f o r e s t r e s o u r c e . The Land Ordinance of 1 8 6 5 i n t r o d u c e d a system whereby t h e r i g h t t o c u t t i m b e r from Crown l a n d was g r a n t e d w i t h o u t n e c e s s a r i l y a l i e n a t i n g the l a n d i t s e l f . C u t t i n g r i g h t s were r e s t r i c t e d t o pe r s o n s " a c t u a l l y engaged" i n the c u t t i n g of " s p a r s , t i m b e r o r lumber". The measure was t a k e n t o "encourage the t h e n e x i s t i n g i n -2 d u s t r y and t o p r e v e n t s p e c u l a t i o n " . Under the terms of c o n f e d e r a t i o n , B r i t i s h Columbia ceded t o the Dominion some 1 0 , 9 7 6 , 0 0 0 a c r e s as i t s c o n t r i b u t i o n t o the c o n s t r u c t i o n o f the Canadian P a c i f i c R a i l w a y and a l s o c o n t r o l o f a f u r t h e r 3,14-68,000 a c r e s , the Peace R i v e r B l o c k , 3 i n l i e u o f l a n d i n the o r i g i n a l g r a n t r e g a r d e d as v a l u e l e s s . T h i s l a r g e - s c a l e a l i e n a t i o n o f p r o v i n c i a l l a n d made no r e c o g n i -t i o n of t h e f a c t t h a t the l a n d i n v o l v e d i n the t r a n s f e r was v a l u a b l e t i m b e r l a n d . W h i t f o r d and C r a i g r e p o r t e d t h a t f a r more t h a n t h e 9 1 3 , 2 l i 5 a c r e s o f t h i s l a n d c l a s s i f i e d as t i m b e r l a n d i n 1 9 1 5 , was w o r t h c l a s s i f y i n g as such.^" Commissioner S l o a n c l a i m e d t h a t t h e t r a c t s "... c o n t a i n e d some o f the f i n e s t s t a n d s of Douglas f i r on the P a c i f i c C o a s t , w h i c h have s u p p o r t e d 2 . 3 . h. S l o a n , 1 9 5 6 , p.1 7 . W h i t f o r d and C r a i g , p. 80 i b i d , p. 8 2 . - 22 -and s t i l l support some of the largest sawmills and p l y -wood m i l l s i n the P r o v i n c e . F o l l o w i n g a Royal Commission i n q u i r y , both land areas were returned to the Province, subject to any a l ienat ions which had occurred during the period of Dominion c o n t r o l ; any harvesting r i gh t s granted by the Dominion from then on came under P r o v i n c i a l c o n t r o l . Railway lands were estimated at being roughly 11 m i l l i o n acres i n 1910, w i th some 1.3 m i l l i o n under federa l l icence or permit for timber c u t t i n g . However, by January 1973, the 105 timber berths covered an area of merely some 164,000 6 acres. Land Sales The Land Act of 1884, stated that "no l and , c h i e f l y valuable for timber s h a l l be disposed of by publ ic or pr ivate sa le" but as la te as 1896 land " s u i t -able for lumbering" was so ld as such. During the period I887-I888 "patented l a n d " , as i t was termed, was sold on the condi t ion that the applicant for purchase made a dec-l a r a t i o n before a Just ice of the Peace that the land was indeed not c h i e f l y valuable for t imber. Licences were 5. S loan, 1956, p . 21. 6. - Pearse, Crown Charges for E a r l y Timber Rights , p. 60. - 23 -needed to cut for purposes that were other than domestic, land c lear ing or , simple land improvements u n t i l 1903* •7 They could be obtained fo r 25 cents per M board f ee t . Sale of timber land continued under the Land  Act of 1888, which introduced a system of land c l a s s i f i -c a t i o n . Unsurveyed lands could be purchased for $2.50 per acre w i t h the purchaser having to have i t surveyed and the f u l l amount of the land pr ice to be paid w i t h i n s i x months. Surveyed lands were sold for $2.50 per acre or $1.00 per acre , depending on whether i t was classed as " su i tab le for c u l t i v a t i o n , lumbering and natura l hay meadows" o r , " su i tab le for c u l t i v a t i o n and valueless for lumbering", r e s p e c t i v e l y . Each purchaser was l i m i t e d to one l o t of 160 - 61+0 acres and a roya l ty of 50 cents per M board feet was reserved on a l l timber so ld subsequent to A p r i l 28, 1888.8 In 1 8 9 1 , the Land Act required the land to be surveyed and c l a s s i f i e d by the surveyor before purchases could be made. Following t h i s , i n I 8 9 6 , timber land was e x p l i c i t l y def ined, being: land carrying 8,000 fbm, per acre when s i tuated west of the summit of the Cascade Range 7. 8. Whitford and Cra ig , p.82. op. c i t . - 2li -and 5,000 fbm. per acre when s i tuated east of the Cascades. Land thus def ined, was reserved from sale but through lack of thorough inspect ion the Act was somewhat l i b e r a l l y in te rpre ted . In f a c t , timber land was sold u n t i l 1912 when the Forest Branch re l i eved inspectors of t h e i r accounting and c o l l e c t i o n work to concentrate on executing the law more exact ly through 9 closer superv i s ion . Logged-off timber land and r e -forested lands that d i d not come under the statutory d e f i n i t i o n of timber lands , were not prohib i ted from sale u n t i l the Forest Act of 1947 determined that the Province should r e t a i n land tha t , " i n the opinion of the M i n i s t e r , w i l l f i n d i t s best use under forest crop." ' Lease System A series of l e g i s l a t i v e enactments that has enabled the Province to r e t a i n much of i t s timber land as Crown land , began wi th the 1865 Land Ordinance. Des-cr ibed as a " d i s t i n c t l y Canadian" system, i t has meant the Province has been able to r e t a i n an in teres t i n and contro l over "by far the greater part of i t s forest 9. 10. Annual Report, 1912, pp. 27-28 Sloan, 1956, p.20. - 2 * -r e s o u r c e s " , 1 1 The i n i t i a l l e g i s l a t i o n was p r i m a r i l y intended to provide the developing lumber industry a guaranteed supply of raw mater i a l at reasonable p r i c e s . Leases ca r r i ed no conditions wi th respect to s i z e , payments to the Crown or terms but , they were r e s t r i c t e d to persons " a c t u a l l y engaged" i n the harvesting of t imber. In 1888, r e n t a l on leases taken out f o r the purpose of cu t t ing timber, was f i x e d by the Land Act at 5 cents per acre on a l l leases granted since 1879. The same l e g i s l a t i o n authorized that leases be granted for a period not exceeding t h i r t y years . A l l leases granted from then on were to be subject to a f i xed r e n t a l of 10 cents per acre and a roya l ty of 50 cents per M fbm. However, a rebate of 25 cents per M fbm. was allowed for a l l spars, p i l e s , shingles and manufactured lumber exported to points outside the Province. The rebate continued u n t i l 1900 (on shingles u n t i l 1905). An important condit ion on the timber lease was the requirement for a sawmil l , w i t h a capacity of M fbm, per day of 12 hours for each ij.00 acres held under lease . The tenure of leases was reduced to twenty years i n 1895 sncl at the same time r e n t a l charges were increased to 15 cents per acre. S ix years l a t e r (1901) the Land Act made prov i s ion for leases to be 11. Whitford and Cra ig , pp. 86-87 - 26 -renewed f o r consecutive periods of twenty-one years, subject to then e x i s t i n g conditions and regulations, r o y a l t i e s and r e n t a l s . The requirement to operate a sawmill was not obligatory a f t e r 1 8 9 7 , but the r e n t a l was reduced to 1 0 cents per acre for those who did. Competitive bidding for harvesting rights was i n t r o -duced to the Province i n 1 8 9 1 . With this system, the tenderer of f e r i n g the highest cash bonus was granted the lease. I t was, however, a system that f a i l e d to develop to any extent. The granting of timber leases was discontinued i n B r i t i s h Columbia aft e r 1 9 0 5 . By then nearly 6 8 8 , 0 0 0 acres had been alienated i n t h i s manner. Today, there are 9 5 timber leases covering an area of only 1 0 7 , 0 0 0 acres bearing r o y a l t i e s as speci-f i e d i n the Forest A c t . 1 2 Pulp timber began i t s era of commercial import-ance around the turn of the century and i n 1 9 0 1 the f i r s t provisions were made f o r pulp leases. These leases were o r i g i n a l l y granted f o r twenty-one years duration. Once again renewals were given on such conditions as happened to be i n force at the time of termination of the period, 1 2 . Pearse, Crown Charges f o r Early Timber Rights, Table 1 , p . 1 2 . - 27 -or, they were determined by the government of the day. Lessees were required to build a pulp m i l l in the Province with a capacity of one ton of pulp or one-half ton of paper per day for each square mile of land included in the lease. It had to be operated within such time as might be fixed by the government, at least six months a 13 year. -* Pulp leases were granted only between 1901 and 1903 by which time one paper m i l l was operating although some 353,000 acres were leased out under the system. Today 33 leases remain. They are far larger than the older temporary leases and run as they are now un t i l due for renewal in 1975>« Licences Side-by-side with the lease system - a system designed for m i l l operators, with a strong incentive built in to encourage them to process the timber - a licensing system operated. Introduced f i r s t by the Timber Act of l88i|., licences were intended to assist the supply of timber to small independent operators who did not own sawmills. The f i r s t licences were restrictive in nature. They were limited to 1000 acres, one only to a person and, a four 13. Whitford and Craig, p.87. - 28 -year tenure. Licences were sold for $2.50 per acre, the annual rental was $10.00 and the licensee had to keep a record of the number of trees cut. He paid a 15 per cent per tree royalty and also 15 cents per M fbm. on the timber cut. The licence was not transferable and i t could be cancelled at any time i f not operated. Special licences were provided for in 1888. The Land Act allowed those having special licences to cut timber on up to 1000 acres for one year and the licences were re-newable at the discretion of the Minister of Lands and Works. Although each individual was limited to one such licence, the special licences were transferable. The rental was $50.00 per licence with additional payments of royalties of 50 cents per M fbm., half of which was rebated i f the lumber was exported. The area for special licences was reduced to 6I4.O acres in 1901, the fee increased to $100.00 and the licence was made nontransferable although the licensee could hold up to two at one time. In 1903 licence fees were once again increased and provision was made for a longer tenure by allowing licence fees to be paid up to five years in advance.^ Prosperity, general economic expansion and social Whitford and Craig, pp. 89-90 - 29 -development across the North American continent brought w i t h i t a growth i n demand for timber i n i t s various forms. But not only was the market demand increas ing ; market supply was d imin i sh ing . The United States and Eastern Canada began to take ac t ion i n recogni t ion of the fact that t h e i r once subs tant ia l timber supplies were dwindl ing. Res t r i c t ions on cut t ing were introduced. Furthermore, establishment of the U . S. Forest Service by the Roosevelt adminis trat ion and the zea l of G i f f o r d Pinchot , one of i t s founding fa thers , brought widespread concern for conservation. In the United States Federal government p o l i c i e s were implemented to encourage cut t ing from only "managed fores t s " while large areas of remaining timber land were declared na t iona l reserves and hence were 15 out of bounds to loggers . In B r i t i s h Columbia, operators pressed the P r o v i n c i a l Government for more l i b e r a l conditions for harvesting t imber. The government took the a t t i tude that the lumber industry was w e l l es tabl i shed i n the Province. "The future of that industry would evident ly be d ic ta ted by market requirements and business laws, and the prov i s ion of cheap Crown stumpage as a bonus upon operation had ceased 15. G i f f o r d Pinchot , Breaking New Ground, (Univers i ty of Washington Press : Seattle) 1972. - 3 0 -to be necessary.""^ Thus, the outcome of the operators' p o l i t i c a l activity was "the revolution in the whole forest policy of the Government that took place in 1 9 0 5 . In the belief that the leasehold method, described above, was wasteful, lending i t s e l f to culling the choicest patches of forest while leaving unproductive areas in the hands of the Crown, leasing and the non-transferable licences were abolished i n favour of "an entirely new principle i n forest policy" v i z . , the reservation of a share i n the i n -1 8 crement of value of standing timber as i t should accrue. In essence the policy was one that allowed the government to f i x annually, payments for renewal of timber cutting options on a specified forest area for a twenty-one year period. That i s , licences were subject to any alteration i n rental or royalty that the government might decide upon. Pulton pointed out in his 1 9 1 0 report that other Canadian provinces had attempted something similar. "But", he wrote, "tardy recovery of some of the public's share in the risen value of the licensed timber bears no comparison, as a policy, with the subtle control that the Br i t i s h Columbian 1 6 . 1 7 . 1 8 . Pulton, p. D15 op. c i t . ib i d , p. D16. - 31 -Government retained i n 190£ over future a l i e n a t i o n of 19 Crown l a n d . " Nevertheless, operators and investors took up l icences under the new conditions w i t h confidence so, good returns accumulated i n the P r o v i n c i a l Treasury. The in sa t i ab le demand for timber continued to cause con-cern and by the end of 1907 a reserve was placed on a l l remaining Crown timber. The concern was echoed through-out the wor ld . Sweden acknowledged that they had been overcut t ing , Russia had decided to reduce exports and the United States estimated that only h a l f the o r i g i n a l quantity of timber remained i n the country. Prom t h i s b r i e f out l ine of l e g i s l a t i o n and p o l i c i e s r e l a t i n g to land tenure, i t can be seen that the permanent a l i e n a t i o n of Crown timber land i n B r i t i s h Columbia through sale and grants was hal ted i n favour of leas ing and l i c e n s i n g systems. The trend was, c l e a r l y , toward disposing of timber to operators and then only as i t was required for cu t t ing and m i l l i n g or , pulp manu-fac ture . There were constra ints but , i n the opinion of Whitford and Cra ig , by 1918 the B r i t i s h Columbia Govern-ment had done more to a s s i s t development of the lumber 19. op. c i t . - 32 -20 trade than any other forest adminis trat ion i n America. The Pulton Royal Commission was set up to look in to some of the problems that exis ted for both government and industry i n u t i l i z a t i o n and conservation of the timber resource. Their recommendations centred around a desire to standardize and s impl i fy the cont ro l systems. With respect to land tenure i n p a r t i c u l a r , t h e y wanted common renewal dates, the same costs , conditions and regulations to cover leaseholds and l icences and a l so , more thorough c r u i s i n g and better record keeping by the relevant government departments. I t appears that the Commission f e l t that a s i m p l i f i e d system would lead to more e f f i c i e n t adminis-t r a t i o n and hence, to greater benefi ts to publ ic and pr ivate in tere s t s a l i k e and greater equal i ty for p a r t i c i -pants i n the forest i n d u s t r i e s . Furthermore, some of the worst consequences of the e x i s t i n g system could be avoided. For example, wi th the twenty-one year l i c e n c e , "even al lowing for a l l reasonable increase i n cut . . . the marketing of that immense body of timber could not p r o f i t a b l y be attempted w i t h i n the twenty-one year l i f e - t i m e of the spec ia l l icenses /sic7." They recommended extension of tenure of spec ia l l icences 2 0 . Whitford and Cra ig , p . 9 2 . - 33 -21 "under proper safeguards". An example of other problems that existed between the government and industry appears i n the Commission's discussion of the pulp leases. They found that companies had experienced many d i f f i c u l t i e s and "had proved unable to comply with the l i t e r a l require-ments and conditions of the leases". This resulted i n the government having to grant many extensions of time. More-over, companies were carrying on sawmill a c t i v i t i e s and lumber business on pulp leaseholds - a more p r o f i t a b l e business. Pulton also noted a c e r t a i n lack of uniformity i n the wording of leases which allowed variations i n int e r p r e t a t i o n . For t h i s reason, the government had found i t s e l f making at least one agreement with a p a r t i c u l a r company, giving i t prvileges and an unfair advantage over competitors i n lumbering. The recommendations of the Com-mission were based on the desire to es t a b l i s h "a sound and equitable method of granting licenses on pulp leaseholds" and included: thorough c r u i s i n g to i d e n t i f y q u a l i t i e s of wood for the d i f f e r e n t purposes of sawmilling and pulp manufacture and, cruises of neighbouring licences' to estimate the average stand i n the area. Also, they thought 21. Pulton, p. Db,9. - 3k -a l l pulp lessees should be required to make application to cut timber from their leaseholds within six months of 22 passage of appropriate legislation. After the embargo on the granting of timber l i c -ences in 1907 and largely i n response to the recommenda-tions of the Pulton Report, a system of "timber sales" was introduced. The Forest Act of 1 9 1 2 , which created the Forest Branch, also made provision for the sale of licences to cut Crown timber, by public auction, after the land had been cruised, surveyed and appraised by the Forest Branch. The licences are referred to as timber sales. Gordon Sloan reported in 1914-5 that by then the cut from timber sales equal to 2 5 per cent of the total from a l l tenures had become an important part of Provincial production. He further estimated that some 12 per cent of the total productive forest land in the Province was in the hands of private operators in the form of Crown grants and various temporary tenures. 2^ It is not surprising, therefore, that during the 191+5 Royal Commission Inquiry he encountered problems and a conflict of interest between the government and the forest industries, a conflict activated by the way 2 2 . 2 3 . i b i d , pp. D£0-D51i. Sloan, 1 9 5 6 , pp. 3k, 3 8 - 3 9 . - 35 -the land tenure system functioned. Sloan i d e n t i f i e d d i f f i c u l t i e s that were akin to but not i d e n t i c a l to ones mentioned i n the 1910 r epor t . He noted that the best timber lands were held by large corporations i n the form of temporary a l ienat ions of Crown land but the system of temporary tenures was not working i n the best in teres t of the people of the Province and, e spec ia l ly for future generations. He wrote: "the system . . . whereby timber lands reverted to the Crown when logged, d id not of fer any inducement to the operators to do other than cut off t h e i r mature timber . . . and then move to other areas, without regard to the p roduc t iv i ty of the land and i t s capacity to produce a continuous crop of timber . . . /Operators^ were t rans ient s , consuming the forest as they went along, without any permanent in tere s t i n the land they cut over and cont inua l ly migrating to other sources of supply . . . Such a s i t u a t i o n could only lead to ult imate d i s a s t e r . " 2 ^ Sloan, at the end of lengthy hearings and d e l i b e r a t i o n s , concluded that the objective of forest resource use p o l i c y i n the Province of B r i t i s h Columbia 2k i b i d p . 3 9 - 36 -must be: "To so manage our forests that a l l our forest land is sustaining a perpetual yield of timber to the fullest extent of i t s productive capacity. When that is accomplished a l l benefits, direct and indirect, of a sustained yield management policy w i l l be realized; pro-viding, of course, that the multiple purpose of our forest is recognized as an aim as important as balancing cut and increment ... Perpetuating our forest stands w i l l not only provide a continuity of wood-supply essential to maintain our forest industries, primary and secondary, with consequent regional s t a b i l i t y of employment, but i t w i l l also ensure a continued forest cover adequate to perform the invaluable functions of watershed protection, stream-flow and run-off control, the prevention of s o i l erosion, and of providing recreational and scenic areas, and a home for our wild bird 25 and animal l i f e . " ^ Among his l i s t of seven subject areas needing changes, he recommended alterations to the systems of tenure and taxation. "The f i r s t step toward this ob-jective would be a form of tenure permitting the operator to retain possession i n perpetuity of the land noxv held under temporary forms of alienation, upon condition that 2 5 . i b i d , p.lj.0 - 37 -he maintain these lands continuously productive and 26 regulate the cut therefrom on a sus ta ined-yie ld b a s i s . " Sloan f e l t that no operator had a s u f f i c i e n t supply of timber i n reserve to maintain economic production of lumber from areas under h i s c o n t r o l , i f compelled to cut on a sus ta ined-yie ld ba s i s , e i ther now or i n the second crop r o t a t i o n . He discounted schemes that merely continued rapid l i q u i d a t i o n of forest resources, repudiated ex i s t ing contracts or , required outright sale of cut over tenures. Rather, Sloan recommended a system that was dependent upon jbhe mutual agreement and cooperation of the large holders and, one that would allow u t i l i z a t i o n of timber from Crown lands. The system he proposed functioned around the idea of ' fores t management areas ' . Sloan recommended a l l o c a t i o n or reserve of Crown timber fo r un i t s of industry so they could , from the combination of Crown and pr ivate timber hold ings , maintain economic production during the period necessary for re fores ta t ion on t h e i r logged lands to mature. Furthermore, he suggested the a l loca t ions be made i n such a way that each operator would be able to manage the combined areas on the assurance there would be enough timber for h i s requirements, i n the next 26. o p . c i t . - 3 8 -r o t a t i o n , t o m a i n t a i n h i s p l a n t on a s u s t a i n e d - y i e l d b a s i s i n p e r p e t u i t y . Accompanying t h i s system he wanted a method t o e x i s t whereby the owners of r e v e r t -i b l e t e n u r e s c o u l d r e t a i n t h e i r l a n d s , i f c l a s s i f i e d as b e i n g b e s t s u i t e d t o t r e e f a r m i n g , a t a n o m i n a l a n n u a l l i c e n c e f e e . I n 1 9 4 7 , S l o a n ' s recommendations were, i n p a r t , implemented. Ammendments t o t h e F o r e s t A c t i n t h a t y e a r s t a t e d : "The M i n i s t e r may e n t e r i n t o agreement, t o be d e s c r i b e d as a f o r e s t management l i c e n c e , w i t h any p e r s o n f o r t h e management o f Crown l a n d s s p e c i f i e d i n the agreement and r e s e r v e d t o the s o l e use o f the l i c e n s e e f o r the purpose of g r o w i n g c o n t i n u o u s l y and p e r p e t u a l l y s u c c e s s i v e c r o p s o f f o r e s t p r o d u c t s t o be h a r v e s t e d i n a p p r o x i m a t e l y e q u a l a n n u a l or p e r i o d i c c u t s a d j u s t e d t o the s u s t a i n e d - y i e l d c a p a c i t y o f the l a n d s i n the a r e a c o v e r e d by the l i c e n c e , o r may e n t e r i n t o an agreement, t o be known as a f o r e s t management l i c e n c e , w i t h t h e owner o f o t h e r t e n u r e s t o combine s u c h o t h e r t e n u r e s and Crown f o r e s t l a n d s i n t o a s i n g l e u n i t r e s e r v e d by m u t u a l c o n s e n t and c o n t r a c t t o the s o l e use o f the l i c e n s e e f o r t h e p u r p o s e . " 2 7 However, no p r o v i s i o n was made f o r r e t e n t i o n o f r e v e r t i b l e t e n u r e s a f t e r l o g g i n g e x cept i n so f a r as t h e i r owners were s u c c e s s f u l i n o b t a i n i n g a f o r e s t management l i c e n c e t h a t i n c l u d e d * t h e i r temporary t e n u r e a l r e a d y h e l d . I t i s im-p r a c t i c a b l e , o f c o u r s e , t o a p p l y s u s t a i n e d - y i e l d management 2 7 . Taken from S l o a n , 1 9 5 6 , p . l i 3 - 39 -principles to logged-off areas; in fact i t is a non-sensical notion. Sloan explained that he wished the forest management licence system to be designed i n such a way as to enable and encourage the practice of sustained -yield forestry management by private interests on p r i -vately held tenures. The ideal system would secure for the licensee an assurance of continuity of supply while at the same time compelling him to assume some of the burden of reforestation. He extended the principle further by recommending that remaining unalienated Crown lands be established into public working circles which would also function on a sustained-yield basis. They would be best managed by the Forest Service and would be places where the independent logger could buy timber and produce logs for small sawmills and conversion plants. In addition, i t was Sloan's idea that holders of forest management licences would be able to supplement their licensed area allowable cut from the resources of public working c i r c l e s . Public working circles could be simply introduced, by regulation, as they had their legislative origin in 1912 when Parliament sanctioned establishment -ko -p o of forest reserves. Support f o r Sloan's recommendations, most of which were l a t e r incorporated into forest l e g i s l a t i o n , came from a wide cross-section of groups interested i n B r i t i s h Columbia's forest resource. The Canadian In-s t i t u t e of Forestry (then known as the Canadian Society of Forest Engineers) the pulp and paper industry, the government Forest Service and the combined forest indus-t r i e s were a l l firm supporters of the proposals for managed forests i n terms of a sustained-yield programme. However, by February 1955, a second Royal Commission chaired by Sloan began hearings that displayed some of the wide d i v i s i o n s that had developed between the i n t e r -ested p a r t i e s . Among the topics on which dissension arose were matters r e l a t i n g to land tenure. The Commission set i t s e l f the task of studying the nature and consequences of the introduction of management licence s , the degree of success i n reaching the sustained-yield objective and c r i t i c i s m s of the p o l i c y that had arisen during the i n t r o -ductory phase. A. number of f a c t s , views and opinions are recorded 2 8 . i b i d , p. kk» - 41 -in the evidence Sloan reported. For example, problems had arisen i n bringing uniformity to the granting of management licences. The policy of the Department of Lands and Forests when approving management licence applications was to regard as unnecessary a requirement that the applicant own any timber or, that he own any mi l l prior to his application, but that f i r s t consider-ation in" issuing licences was to be given to existing industry. 2 <2 Nevertheless, on searching the records, the Commission found that up to 1955, there had been only four cases where completed contracts were made appurtenant to a plant definitely located. These were a l l large pulp or paper mi l l s . Other management licences had been issued to plants, or proposed plants, not precisely located, and the majority of licences had no conditions restricting the disposal of products. It appeared that the effect of this differentiation was the issuing of licences even though the conversion plants might be moved to some other location in the future or, the mills might be closed and others supplied instead, i f that should prove the more profitable course of action. This could be done regardless 29. Sloan, 1956, p. 55. - IL2 -of the dependence of e x i s t i n g communities upon the tabled p lans . On the other hand, other l icensees d id not have th i s same p r i v i l e g e although the depend-ency of communities upon them may have been no greater . The o r i g i n a l i n t e n t i o n was to enable conversion plants to obtain timber supplies i n perpetu i ty . I t appeared the i n t e n t i o n was not l i k e l y to m a t e r i a l i z e . A further example of the undesirable effects of the management l i cence system can be seen from considerat ion of the consequences and l i k e l y consequences of implementing subsections 2 5 , 3 2 , 3 3 and 3k of the Forest Act as i t was i n 1 9 5 5 . Provis ions i n these sections allowed the M i n i s t e r to place under p r o v i s i o n a l reserve any part of the l icence area not otherwise a l i ena ted . Moreover, the M i n i s t e r couHd, at h i s d i s c r e t i o n , give to the owner of a sawmill or other forest industry a l icence to cut Crown timber w i t h i n the l i cence area at an appraised stumpage pr ice and without publ ic competit ion. I f these arrangements were ac tua l ly ca r r i ed out they might w e l l work against the objectives of the sustained - y i e l d p o l i c y e spec ia l ly as i r re spons ib le operators could cause undue interference i n a l i censee ' s arrangement of age-class 30 for the next r o t a t i o n . The Forest Act gave great power to the Min i s t e r and h i s Department i n the award of Crown timber and 3 0 . i b i d , p. 6 0 . - 1+3 -also i n the cont ro l of l icensed forests a f ter the award but i t gave l i t t l e guidance on the v i t a l quest ion: What q u a l i f i c a t i o n s j u s t i f y the award of a l icence? As there was nei ther economic l i m i t nor l e g a l l i m i t to the s ize and number of management l icences that could be held by the same l icensee and, poor q u a l i t y timber and poor management of publ ic working c i r c l e s was the general r u l e , the small operators were i n a somewhat vulnerable p o s i t i o n . In B r i t i s h Columbia, however, the d i s t i n c t p o s s i b i l i t y of powerful monopolies developing was an undesirable outcome of the system. I t was an outcome that was not regarded as being i n the best in teres t s of the Province or the forest indus t ry . There i s no doubt that the management l icence p o l i c y i n 1955 was lacking i n c l a r i t y and was, therefore , d i f f i c u l t to administer to produce the intended r e s u l t s . The inherent tendency for organizations to expand beyond t h e i r f i e l d was evident as was the trend for consol idat ion of a l l aspects of the conversion process. Each l icence app l i ca -t i o n was awarded on mer i t , but there was no apparent estimate or d e f i n i t i o n of " m e r i t " . Neither were there adequate means for competitors and opposing interes t s to present t h e i r views. I t appeared to the Commissioners - kh -t h a t the system, as l i t e x i s t e d , had t h e g r e a t e s t a t t r a c t i o n f o r owners o f temporary t e n u r e s , w h i c h t h e y t h e r e b y made permanent, i f the owner was a b l e t o i n c l u d e them b o t h i n a f o r e s t management l i c e n c e . Prom t h i s c h a p t e r i t can be seen t h a t l a n d t e n u r e systems have been a t o o l o f g r e a t s i g n i f i c a n c e i n the admin-i s t r a t i o n of f o r e s t r e s o u r c e use p o l i c y i n B r i t i s h Columbia d u r i n g the p a s t s e v e n t y - f i v e y e a r s . However i t must be n o t e d a l s o t h a t c o n d i t i o n s a t t a c h e d t o the use o f P r o v i n c i a l f o r e s t l a n d and a d m i n i s t r a t i v e r e g u l a t i o n s g o v e r n i n g them have become s u c h a b e w i l d e r i n g mosaic t h a t a d m i n i s t r a t o r s have been u n a b l e t o a p p l y them c o n s i s t e n t l y . Even w i t h major r e v i e w s ( i n the form of R o y a l Commissions) o f these a d m i n i s t r a -t i v e c o n t r o l s and a t t e m p t s t o s i m p l i f y and s t a n d a r d i z e them, the consequence of t h e i r development has been t h a t a major p o l i c y o b j e c t i v e of p u b l i c ownership o f f o r e s t ' l a n d has not been f u l l y r e a l i z e d . But t h e r e have been f u r t h e r m a j o r un-d e s i r a b l e outcomes o f t h e development of s u c h a complex s e t o f a d m i n i s t r a t i v e c o n t r o l measures. F i r s t , the a d m i n i s t r a t i v e p r o c e s s has t e n d e d t o f a v o u r l a r g e - s c a l e f o r e s t o r g a n i z a t i o n s when a p p l y i n g a d m i n i s t r a t i v e r e g u l a t i o n s t o l e a s e s and l i c e n c e s t o t h e d e t r i m e n t o f s m a l l independent o p e r a t o r s . S e c o n d l y , much of t h e P r o v i n c i a l f o r e s t l a n d a c t u a l l y r e t a i n e d by the - 45 -Crown has been logged without concern for reforestation and without concern for a Provincial forest resource in perpetuity. In B r i t i s h Columbia today most of the forest land is included in 34 Tree Farm Licences and 94 Public Sustained-Yield Units comprising 10 million acres and 80 31 million acres respectively.-" The Tree Farm Licences have absorbed half of the old temporary tenures as well as considerable areas of Crown granted lands. Alien-ations in Public Sustained-Yield Units are in several forms of Timber Sale Licences while certain rights are also held under Pulpwood Harvesting Agreements. No new Tree Farm Licences were issued to industry between 1966 and 1974. The new innovations in tenure policy have been inspired by advances i n sawmilling technology and the rapid expansion of pulp milling i n the Interior. The most important new variant is the Timber Sale Harvesting Licence which commits the Crown to make available to the Licensee a specified volume of timber each year from designated Public Sustained-Yield Units for, say, a ten year period. The exact area from which the timber is to 31. Pearse, Forest Tenures in British Columbia, p.17. - 14.6 -be removed i s i n c i d e n t a l to the l i cence and, during the term of the l i c e n c e , short-term cut t ing permits authorize cu t t ing i n designated areas, and specify the appraised stumpage rates and other conditions of harvesting such as 32 f o r e s t r y , protec t ion and management r e s p o n s i b i l i t i e s . Closer u t i l i z a t i o n of timber has brought changes to the I n t e r i o r . By the 1960's the I n t e r i o r sawmill ing i n -dustry, 'through the quota system, had l a rge ly preempted the annual harvest ava i lab le i n Publ ic Sustained-Yield U n i t s , although i t was only to the extent of the then p r e v a i l i n g lumber recovery standards. To deal wi th the s i t u a t i o n Pulpwood Harvesting Agreements were introduced to provide assured raw mater ia l supplies of wood f ib re to the new pulp m i l l s . These agreements provide l icensees wi th options to purchase timber below sawmill ing standards from designated Publ ic Sustained-Yield U n i t s . The agreements carry w i t h them obl igat ions to construct and operate a pulp m i l l and to pur-chase re s idua l chips from sawmil ls . In December 197^ 1- there were f i ve Pulpwood Harvesting Agreements i n force i n the I n t e r i o r . To that date the holders had r a r e l y exercised t h e i r options to purchase timber because supplies of re s idua l chips from sawmills had general ly been s u f f i c i e n t to meet t h e i r needs. 3 2 . 3 3 . i b i d . , p . 18, i b i d . , pp. 19-20 I l l SUSTAINED YIELD MANAGEMENT OF FORESTS As n o t e d i n Chapter 2 a t i m b e r c u t t i n g p o l i c y based on t h e concept of s u s t a i n e d - y i e l d o r managed f o r e s t s was approved by t h e l e g i s l a t u r e i n the passage o f F o r e s t  A c t ammendments i n 1947 • I n p r i n c i p l e t h i s l e g i s l a t i o n p r o v i d e d t h e Government o f B r i t i s h C olumbia, p a r t i c u l a r l y the F o r e s t S e r v i c e , w i t h a major t o o l f o r c o n t r o l l i n g t h e u t i l i z a t i o n o f P r o v i n c i a l f o r e s t r e s o u r c e s . I t was a l s o a v e h i c l e f o r i m p l e m e n t i n g f o r e s t p r o t e c t i o n measures and s i l v i c u l t u r a l and h a r v e s t i n g p r a c t i c e s t h a t were deemed d e s i r a b l e . The i n t r o d u c t i o n o f changes o f s u c h i m p o r t f r e q u e n t l y s p a r k s o f f problems stemming c h i e f l y f r om the c o n f l i c t i n g i n t e r e s t s o f t h e p a r t i c i p a t i n g p a r t i e s . 1 When s u s t a i n e d - y i e l d p o l i c i e s and methods were i n t r o d u c e d t h e r e was, i n i t i a l l y , a c o n s i d e r a b l e a r e a o f m u t u a l a g r e e -ment and u n d e r s t a n d i n g between government and i n d u s t r y and between i n d u s t r i e s . D e s p i t e t h i s t h e r e was no e x c e p t i o n t o the g e n e r a l l y o b s e r v e d phenomenon and u n f o r e s e e n d i f -f i c u l t i e s and c o n f l i c t s a r o s e w i t h the change i n p o l i c y o b j e c t i v e s . T h i s c h a p t e r i s an a n a l y s i s o f s e v e r a l major problems e x p e r i e n c e d i n i m p l e m e n t i n g s u s t a i n e d - y i e l d !• F o r example s e e , P. R. Lawrence and J a y W. L o r s c h , O r g a n i z a t i o n and Environment ( R i c h a r d I r w i n : Homewood, i i i . ) 1 9 6 7 . : — . ' - 1+8 -methods to the management of P r o v i n c i a l forest areas. The problems discussed i n the chapter have a common core. The dispute i s over the meanings of some terms that are e s sen t i a l to sus ta ined-yie ld forest management. They are f a m i l i a r to persons who understand the p r i n c i p l e s of sus ta ined-yie ld but to administer a sus ta ined-yie ld programme i n the Vancouver Forest D i s t r i c t , fo r example, the terms required administrat ive d e f i n i t i o n s - d e f i n i t i o n s that were rather more ' spec i f i c than the general terms used to out l ine p o l i c y p r i n c i p l e s and ob jec t ives . The chapter i s intended to show how the controversies that arose amongst the actors i n forest p o l i c y adminis trat ion i n B r i t i s h C o l -umbia over d e f i n i t i o n s of terms l i k e allowable annual cu t , r o t a t i o n and increment balance, were part of the process of developing administrat ive machinery that would give meaning to p o l i c y p r i n c i p l e s i n the form of a functioning programme. Susta ined-yie ld i s a concept, rather than a term that can be defined s imply. Sloan has defined i t i n hi s 191+5 Report as: "A perpetual y i e l d of wood of commercially usuable quantity from reg iona l areas i n year ly or per iod ic quant i t ies of equal or increas ing volume." He has, however, 2. Sloan, 191+5, p.127. - k-9 -given the words 'regional' and 'periodic 1 definite meanings and limits and thus, provides further details on what sus-tained-yield means i n the context of Bri t i s h Columbia's forest resource u t i l i z a t i o n . Not just any area of any size can be put onto a sustained-yield production cycle instan-taneously. Both technical practicalities and the socio -economic conditions pertaining at the time, need to be taken into account when estimating what can be classified as a sustained-yield region. Sustained-yield requires detailed planning for smaller regions orcareas, not merely in the i n i t i a l stages of dedicating a forest area to produce an equal volume of wood, but also in providing for the con-tinuous management necessary to maintain the forest i n a condition to satisfy this objective indefinitely. The •regional area' i s , then, a sustained-yield unit capable of being managed under the provisions of one and the same working plan. It must not be so large that objectives having social implications cannot be achieved, nor so small that i t does not include the necessary range of growing stock to provide an annual yield large enough to operate i t profitably. It may or may not coincide with an adminis-trative forest unit; i t may include more than one type of - 5 0 -forest and be managed to supply more than one type of conversion plant. To satisfy the essential c r i t e r i a of a sustained-yield unit, however, i t must be organized regionally to produce a sustained annual yield under a 3 single working plan. Sloan has used the word 'periodic' as an alter-native to a s t r i c t l y determined and inflexible 'annual' yield, i n recognition of the significance of economic factors which alter demand and supply conditions. A number of causes, ranging from natural phenomena to the fluctuations of international markets, may interfere with the steady flow of wood into, and manufactured products out of, a m i l l . "Nevertheless", Sloan pointed out in 1 9 5 6 , " i t i s the object of sustained-yield management to bring irregularities into balance over relatively short periods, so as to minimize interference with the establishment of a regular series of age-classes in the next rotation."^" It is negation of the principle of sustained-yield to intentionally manage a forest so as to harvest large areas of i t at infrequent intervals, even up to a whole rotation, with long periods without production. 3. op. c i t . k* op. c i t . - 51 -N o r m a l l y s u s t a i n e d - y i e l d u n i t s a re permanent u n i t s o f o p e r a t i o n . The compartments are c a r e f u l l y s e l e c t e d , and from t h e n on, c o n s t r u c t i o n of r o a d s , l o c a -t i o n o f l o g g i n g o p e r a t i o n s , r e f o r e s t a t i o n , f o r e s t p r o t e c t i o n developments, e t c . are a l l r e l a t e d t o them. U n l e s s the s u s t a i n e d - y i e l d u n i t i s q u i t e u n i f o r m i n f o r e s t t y p e (which i t i s not i n t h e Vancouver F o r e s t D i s t r i c t , the p a r t i c u l a r D i s t r i c t t o w h i c h we r e f e r l a t e r ) , i t i s n e c e s s a r y t o group a number o f compart-ments o f l i k e n a t u r e f o r management under the same s i l v i c u l t u r a l system and r o t a t i o n . These grouped com-partments f o r m a p r o d u c t i o n u n i t o r w o r k i n g c i r c l e , w i t h 5 as complete a s e r i e s of a g e - c l a s s e s as p o s s i b l e . The w o r k i n g c i r c l e u n i t may be one o f s e v e r a l b e i n g o p e r a t e d under a maste r w o r k i n g p l a n , o r i t may, i n a u n i f o r m f o r e s t , be i d e n t i c a l w i t h t h e s u s t a i n e d - y i e l d u n i t . I t i s an a d m i n i s t r a t i v e u n i t and may w e l l be d i v i d e d i n t o s m a l l e r u n i t s o r , w o r k i n g c i r c l e s i n l a t e r developments when i t s f u l l c a p a b i l i t i e s are known and t h e r e i s g r e a t e r demand f o r more i n t e n s i v e management. The i d e a l s i t u a t i o n e x i s t s when, at a l l t i m e s , the s u s t a i n e d - y i e l d u n i t has a 5. The term as i t i s used here i s not the t e c h n i c a l term " w o r k i n g c i r c l e " . - 52 -complete g r a d u a t i o n o f a g e - c l a s s e s j a f t e r each h a r v e s t the age r e l a t i o n s h i p s and t h e u s a b l e v a l u e o f t h e g r o w i n g s t o c k i s r e l a t i v e l y the same as i t was a f t e r the p r e v i o u s h a r v e s t . There i s n o t , however, one s i n g l e , d e f i n i t e , a l l i n c l u s i v e s u s t a i n e d - y i e l d system c a p a b l e o f b e i n g condensed i n t o a s i n g l e f o r m u l a w h i c h can t h e n be a p p l i e d everywhere t o m a i n t a i n g r o w t h , a s s u r e r e f o r e s t a t i o n and secu r e a con-t i n u o u s s u p p l y o f good q u a l i t y t i m b e r . C a l c u l a t i o n s o f a n t i c i p a t e d y i e l d - y i e l d b e i n g synonymous w i t h p r o d u c t i o n f o r use - and, r e g u l a t i o n o f c u t a r e based on fo r m u l a e a s s o c i a t e d w i t h the v a r i o u s s i l v i c u l t u r e systems i n o p e r a t i o n . I n B r i t i s h C o lumbia, f o r example, a method o f c l e a r c u t t i n g has been used on t h e Coast w h i l e s e l e c t i v e c u t t i n g has been the method used i n the I n t e r i o r , T h i s v a r i a t i o n i s based on the d i f f e r e n c e s i n f o r e s t c o n d i t i o n s and when a s u s -t a i n e d - y i e l d management p o l i c y i s f u n c t i o n i n g t h e same a p p l i e s , By 1956, s u s t a i n e d - y i e l d f o r e s t r y had made fewer i n r o a d s i n t o B r i t i s h Columbia t h a n an a l l - o u t c o n c e r t e d , c o - o p e r a t i v e e f f o r t w ould have p r o d u c e d , a l t h o u g h i n t r o -d u c t o r y s t a g e s were w e l l under way. T h i s can be ac c o u n t e d f o r l a r g e l y by n o t i n g t h e r e had always been an ample s u p p l y - 53 -of t i m b e r f o r t h o s e i n t e r e s t e d s p e c i f i c a l l y i n l o g g i n g . F u r t h e r m o r e , many of t h e s m a l l e r c o n v e r s i o n p l a n t s needed o n l y a l i m i t e d s u p p l y , as t h e i r owners p l a n n e d f o r l i q u i -d a t i o n o v er a p e r i o d o f y e a r s . However, t h e s i t u a t i o n was c h anging and l a r g e - s c a l e companies were e s t a b l i s h i n g them-s e l v e s and were l o o k i n g f o r an a s s u r e d s u p p l y of raw m a t e r i a l . The s o c i a l impact o f t h e s e l a r g e employers i s s u ch t h a t whole communities become dependent on them f o r t h e i r v i a b i l i t y . C o n s e q u e n t l y , the s u s t a i n e d - y i e l d system was a d e s i r a b l e one from b o t h s o c i a l and economic p e r s p e c -t i v e s and f o r i n d u s t r y and government a l i k e . Y e t , S l o a n r e c o r d e d i n 1956 t h a t . t h e B r i t i s h Columbia f o r e s t s were f a r from b e i n g w e l l b a l a n c e d . A l l e v i d e n c e l e d him t o b e l i e v e t h a t b o t h the p r i v a t e management of f o r e s t manage-ment l i c e n c e s and p u b l i c management o f P r o v i n c i a l f o r e s t r e s e r v e s c o u l d a c h i e v e m e r e l y a semblance of s u s t a i n e d - y i e l d c o n d i t i o n s w i t h i n the l i m i t s o f a s i n g l e r o t a t i o n . Even t h e n i t c o u l d o n l y be done at g r e a t c o s t t o p o t e n t i a l i n c r e m e n t because no i r r e g u l a r l y s t o c k e d f o r e s t can be o r g a n i z e d f o r s u s t a i n e d - y i e l d w i t h o u t s a c r i f i c e t o immediate y i e l d . 6. S l o a n , 1956, p.226 - $k -I t was w i d e l y r e c o g n i z e d t h a t an improved i n v e n t o r y was needed f o r a s a t i s f a c t o r y l e v e l o f i n f o r -m a t i o n about the f o r e s t c o n d i t i o n s , c o n d i t i o n s w h i c h i n c l u d e d c o m b i n a t i o n s o f mature and immature s t a n d s , d i f f e r e n t s i t e c o n d i t i o n s e t c . Y e t a l t h o u g h t h e y l a c k e d p r e c i s i o n i n a p p l i c a t i o n i n e v i t a b l e from a s c a n t y know-l e d g e o f the f o r e s t s , t h e r e were f o r m u l a e a v a i l a b l e d e v e l o p e d p a r t i c u l a r l y from European e x p e r i e n c e t o a s s i s t t hose i n t e n t upon i n t r o d u c i n g s u s t a i n e d - y i e l d p r i n c i p l e s t o t h e i r f o r e s t management. I n f a c t a c t u a l s t a r t s had been made and, where t h e y had, the o p e r a t i v e management l i c e n c e s were f u r t h e r advanced toward s u s t a i n e d - y i e l d aims t h a n were p u b l i c f o r e s t a r e a s . B u t , whether o r not a s u s t a i n e d - y i e l d p o l i c y was a good one f o r B r i t i s h C olumbia, was not a q u e s t i o n a t the 1955 R o y a l Commission. The p o l i c y had been w i d e l y a c c e p t e d by b o t h government and i n d u s t r y . R a t h e r , the i s s u e was, whether or not l o g g i n g had r e a c h e d a l e v e l t h a t endangered the f u t u r e s u p p l y o f wood f o r t h e i n d u s t r i e s o f the P r o v i n c e . I t was c l e a r t h a t some areas were under-rcut, eg., the P r i n c e Rupert Coast D i s t r i c t and the I n t e r i o r . V/ith r e s p e c t t o the Vancouver D i s t r i c t , however the q u e s t i o n o f o v e r - c u t t i n g was the one d e b a t e d a t c o n s i d e r a b l e l e n g t h . - 55 -The F o r e s t S e r v i c e argued t h a t , i n a s u s t a i n e d - y i e l d u n i t w i t h a normal growing s t o c k , the a n n u a l c u t i s b a l a n c e d by the a n n u a l i n c r e m e n t . I t c l a i m e d t h i s b a l a n c e was n o t , i n f a c t , b e i n g a c h i e v e d i n the Vancouver F o r e s t D i s t r i c t and, t h e r e f o r e , the D i s t r i c t was b e i n g o v e r - c u t . The f i r s t premise was g e n e r a l l y t a k e n t o h o l d t r u e , a l t h o u g h the D i s t r i c t d i d not have a n o r m al s e r i e s of a g e - c l a s s e s t o comply c o m p l e t e l y w i t h the c o n d i t i o n s f o r c l a s s i f i c a t i o n as a s u s t a i n e d - y i e l d u n i t . The d i s -agreement between the S e r v i c e and i n d u s t r y c e n t r e d around: (a) Which c a l c u l a t i o n o f a l l o w a b l e c u t i s most a c c u r a t e , r e a s o n a b l e and a p p r o p r i a t e f o r the D i s t r i c t ? and, (b) I s i t i m p e r a t i v e o r even d e s i r a b l e t h a t c u t and i n c r e m e n t s h o u l d b a l a n c e d u r i n g the p e r i o d o f c o n v e r s i o n t o s u s t a i n e d - y i e l d management? The same f o r m u l a , the H a n z l i k f o r m u l a , was used by t h e F o r e s t S e r v i c e and a l s o by those who c h a l l e n g e d . Never-t h e l e s s , as a l l t h e o r e t i c a l methods o f c a l c u l a t i n g the a l l o w a b l e c u t f o r s u s t a i n e d - y i e l d are i n e v i t a b l y sub-j e c t e d t o c o n s i d e r a b l e m o d i f i c a t i o n s when a p p l i e d t o p a r t i c u l a r f o r e s t s , t h e r e was p l e n t y of scope f o r sub-j e c t i v i t y and p e r s o n a l o p i n i o n s t o e n t e r t h e s e i m p o r t a n t a s p e c t s o f p o l i c y a d m i n i s t r a t i o n . - 56 -In calculations of annual cut the terms 'annual increment', 'current increment' and 'mean annual increment' are used with the following definitions: Annual Increment - is the increase i n wood volume added each year to a tree, an acre, or a forest by natural growth; i t may or may not be of any immediately merchant-able value, depending on the size of the trees. Current Increment - is the volume added by growth during the present year or, for simpler calculation the average of a short period 5 - 1 0 years. Mean Annual Increment - i s the average per annum through the l i f e of the tree or stand. Current increment rises rapidly during the early l i f e of the tree, reaches a maximum and then gradually f a l l s to zero. It f a l l s to zero long before a l l the trees die because the diminishing increment in the trees that live is equalled or surpassed by the death of other trees. The mean annual increment reaches i t s maximum at the precise moment when i t i s equal to the current annual increment. That is the time for logging i f the object of management is the greatest production of volume. The age at the time of logging, with the addition i f necessary, of a few years to allow for reforestation, i s rotation. - 57 -I n t h e Vancouver F o r e s t D i s t r i c t the F o r e s t S e r v i c e i n 1955 e s t i m a t e d 29,627 m i l l i o n c u b i c f e e t o f mature t i m b e r , 10,170,000 a c r e s o f l a n d c a p a b l e of p r o -d u c i n g commercial t i m b e r and, 2,520,000 a c r e s o f immature s t a n d s a d d i n g i n c r e m e n t a t v a r i o u s r a t e s a c c o r d i n g t o t h e i r age and t h e q u a l i t y o f the l a n d . The mean a n n u a l i n c r e m e n t e s t i m a t e d by t h e F o r e s t S e r v i c e , a l e v e l t h a t can o n l y be re a c h e d when the s t a n d s r e a c h t h e i r r o t a t i o n age, was t o average 75 c u b i c f e e t p e r a c r e ; the average r o t a t i o n was t o be 90 y e a r s . The f a v o u r a b l e range o f a g e - c l a s s e s o f t h e immature s t o c k would enable t h i s t o be i n c r e a s e d t o 540 m i l l i o n f e e t p e r annum. Other f o r e s t e r s p r e s e n t e d d i f f e r e n t f i g u r e s from c a l c u l a t i o n s b a s e d on t h e i r own e s t i m a t e s . A l t h o u g h t h e y u sed the same f o r e s t i n v e n t o r y f i g u r e s o f mature volume and areas o f immature s t a n d s , the d i f f e r e n c e s arose t h r o u g h use o f d i f f e r e n t r o t a t i o n s and in c r e m e n t and, t h r o u g h i n t e r p r e t a t i o n s and a d j u s t m e n t s made i n mature volumes, based on e a c h man's e x p e r i e n c e and judgement. The i n d u s t -r i a l f o r e s t e r s ' p o s i t i o n was e x p l a i n e d by T. G. W r i g h t , f o r example. He i n d i c a t e d t h a t t h e i r e s t i m a t e s were f o r m u l a t e d u s i n g i d e n t i c a l m a t e r i a l t o t h a t used by t h e F o r e s t S e r v i c e but he added a s i g n i f i c a n t q u a l i f i c a t i o n . " I t i s a l l p u b l i c - 58 -i n f o r m a t i o n and we've used the same i n f o r m a t i o n , except t h a t we have supplemented t h e F o r e s t S e r v i c e e s t i m a t e s w i t h our many y e a r s o f p r a c t i c a l e x p e r i e n c e i n c r u i s i n g and i n l o g g i n g , and p a r t i c u l a r l y we have t a k e n an i n t e r e s t 7 i n volumes p e r a c r e r e c o v e r e d i n l o g g i n g . " On l o o k i n g i n t o the reaso n s f o r t h e d i s p a r i t y Commissioner S l o a n r e p o r t e d t h a t the F o r e s t S e r v i c e had not i n c l u d e d i n t h e i r s u s t a i n e d - y i e l d c a l c u l a t i o n s p r o -d u c t i o n from p a r t l y s t o c k e d a r e a s t h a t c o u l d be a n t i c i -p a t e d under normal c i r c u m s t a n c e s . A l s o , d e d u c t i o n s made by the S e r v i c e f o r e s t e r s f o r breakage and waste were c o n s i d e r a b l y h i g h e r than a " r e a s o n a b l e " assessment d e r i v e d from r e c o v e r y l e v e l s t a t i s t i c s g a t h e r e d d u r i n g the p r e v i o u s t e n y e a r s o r s o . Moreover, t h e r e were two o t h e r i m p o r t a n t f a c t o r s w h i c h a f f e c t e d the a l l o w a b l e c u t i n the Vancouver D i s t r i c t and over w h i c h t h e r e was c o n s i d e r a b l e d i s a g r e e m e n t . These were r o t a t i o n and r a t e o f i n c r e m e n t . C o n f l i c t i n g v i e w s on the im p o r t a n c e o f r o t a t i o n i n c a l c u l a t i n g the s u s t a i n e d - y i e l d c a p a c i t i e s o f f o r e s t s h a v i n g a l a r g e s u r p l u s o f mature t i m b e r (the s i t u a t i o n on the Coast) a l s o came t o the s u r f a c e . N i n e t y y e a r s a re 7. S l o a n , 1956, T a b l e s 53 and 51+, pp. 233-235 - 59 -necessary to grow timber for sawmills but that "rotation doesn't come into effect for so long a time into the future that ... whether you adopt the eighty-year rotation or the ninety-year rotation isn't going to make much d i f -ference now", was how H. R. MacMillan expressed his attitude 8 to the problem. The Forest Service was of the opinion that a logical approach was one that made some allowance for continued improvement i n u t i l i z a t i o n of small logs for both pulp and saw timber. Therefore, an average rotation of as low as seventy years was sensible and only for stands then classed as immature was i t necessary to assume a ro-tation age of ninety years. After considering the relevant evidence i t was Sloan's unequivocal belief that the annual cut in the Vancouver Forest District should not be restricted to the volume of annual increment during the period of con-version to sustained-yield management. His view was based on the reasoning that, as the proportion of productive land actually producing increment is so small, a paramount consideration in management must be to increase this area as rapidly as possible. The f u l l increment possible for a d i s t r i c t can be obtained only after a proper arrangement 8 ibid, p.236. - 60 -of age-classes has been established. Any estimates of l i k e l y productive capacity after virgin forests have been cut are simply guesses and, although interesting, are of no value i n determining and regulating the annual cut. Therefore, he argued, in the Vancouver District the pro-ductive capacity of the forest land is of l i t t l e relevance to the calculations of volume to be harvested. He thought the main objective should be "to establish f u l l increment on a l l the forest lands and arrange a proper gradation of age-classes."^ In summary, the stand taken by Sloan was that an estimate of cut in an area such as the Vancouver Forest District i f of value only in so far as i t might be useful i n guiding policies and administrative regulations. Once the sustained-yield policy was established, however, allowable cuts could be determined and used as guidelines or standards for controlling the u t i l i z a t i o n of the forest resource. Sloan considered comparative data on the organized and unorganized forest areas in the District and analyzed i t in the following terms. The organized forests, with I4.I per cent of the productive forest area and I4.8.2 per cent of the mature timber volume, were being managed to produce only 9 i b i d . , p.237. - 61 -3 8 . 9 p e r cen t o f the a l l o w a b l e c u t o f the Vancouver D i s t r i c t . T h i s was the s i t u a t i o n d e s p i t e the f a c t , o r r a t h e r , the commonly h e l d v i e w , t h a t the o r g a n i z e d f o r e s t s , p a r t i c u l a r l y the f o r e s t management l i c e n c e s , i n c l u d e d the cream o f the D i s t r i c t ' s t i m b e r s t a n d s . The f o r e s t manage-ment l i c e n c e s a l o n e , c o n t a i n i n g a t the t i m e 2 2 . 5 p e r cent of the p r o d u c t i v e a r e a and 28.2 p e r cen t o f t r e e t i m b e r volume, were r e s t r i c t e d by c o n t r a c t t o produce 21].. 1 p e r cent of the D i s t r i c t y i e l d . The c u t t i n g p e r i o d d u r i n g w h i c h o l d t i m b e r was h a r v e s t e d was f i f t y - f i v e y e a r s , a f t e r w h i c h im-mature st a n d s were t o be read y t o take o v e r . The o l d t i m b e r was p l a n n e d t o l a s t s i x t y - f o u r y e a r s i n the f o r e s t management a r e a s and s e v e n t y - f o u r y e a r s i n p u b l i c w o r k i n g c i r c l e s . Some 5 1.8 p e r cen t o f the D i s t r i c t ' s t i m b e r was s t i l l u n o r g a n i z e d and, i n c l u d i n g b o t h p u b l i c and p r i v a t e o w n e r s h i p , would have t o be c u t o f f i n f o r t y - s i x y e a r s t o m a i n t a i n the D i s t r i c t a l l o w a b l e c u t . " I am d r i v e n t o c o n c l u d e " , he w r o t e , " t h a t the c a u t i o n w h i c h was a d m i t t e d i n c a l c u l a t i n g the D i s t r i c t ' s s u s t a i n e d - y i e l d c a p a c i t y has been e x e r c i s e d t o an extreme degree i n the p r e p a r a t i o n and a p p r o v a l o f w o r k i n g p l a n s f o r ar e a s w i t h i n s u s t a i n e d - y i e l d u n i t s , p u b l i c and p r i v a t e . " ^ 1 0 . i b i d , p. 2I4.O. - 62 -A t the t i m e , the average net r e c o v e r a b l e volume p e r a c r e i n the D i s t r i c t was e s t i m a t e d by the F o r e s t S e r -v i c e t o be 5,01+5 c u b i c f e e t , o r 30,200 fbm. The r e a l o r a c t u a l average f o r a r e a s w i t h i n management l i c e n c e s was 5,620 c u b i c f e e t or a p p r o x i m a t e l y 33,700 fbm. p e r a c r e i n 1955, from a l l t e n u r e s and s i t e q u a l i t i e s . W i t h no more t h a n a p a s s i n g g l a n c e a t t h e s e f i g u r e s , one must co n c l u d e w i t h S l o a n t h a t the F o r e s t S e r v i c e e s t i m a t e s were u n r e a s o n a b l y c o n s e r v a t i v e . T h i s i s e s p e c i a l l y so w i t h w o r k i n g p l a n s b e i n g s i m p l y b l u e p r i n t s made f o r s h o r t p e r i o d s o f some f i v e t o t e n y e a r s d u r a t i o n . I t appears t h a t much o f t h e o v e r c a u t i o n was i n d u c e d by the u n a v a i l -a b i l i t y of complete i n f o r m a t i o n n e c e s s a r y f o r c o n s t r u c t i o n o f w o r k i n g p l a n s . One outcome from the a p p l i c a t i o n o f t h e s e e s t i m a t e s , was an apparent u n d e r c u t t i n g i n b o t h p r i v a t e and p u b l i c u n i t s . I f t h e p r a c t i c e were t o c o n t i n u e , an e x c e s s o f growing s t o c k would be b u i l t up i n t h o s e u n i t s a t the expense of p r o d u c t i o n from o u t s i d e a r e a s j l a t e r , i t w ould be a t the expense of i n d u s t r y at l a r g e . T h i s s i t u a -t i o n would p r o b a b l y c o n t i n u e u n t i l b e t t e r s u r v e y s and e s t i m a t e s c o u l d be made a v a i l a b l e , ones w h i c h would p r o v e , i n a l l l i k e l i h o o d , t h a t a g r e a t e r y i e l d c o u l d be o b t a i n e d . I n r e m a r k i n g on the e x t e n t and impact the low e s t i m a t e s might have had, S l o a n r e c o r d e d t h a t he f e l t t h a t m e r e l y - 63 -e x c e s s i v e s a f e t y f a c t o r s had been a p p l i e d t o the i n v e n t o r y volumes when used f o r management p l a n s . He conceded i t was u n l i k e l y t h a t i m p o r t a n t e r r o r s had been made and n o t e d t h a t the d i s c r e p a n c i e s were p r i m a r i l y from i n t e r p r e t a t i o n , S l o a n r e c o r d e d i n the Commission's r e p o r t t h a t the r a t e of c u t t i n g o l d g r o w t h - t i m b e r s h o u l d be r e l a t e d t o two o b j e c t i v e s , " F i r s t i t s h o u l d be d e s i g n e d t o produce an e v e n l y g r a d a t e d s e r i e s o f a g e - c l a s s e s i n the r e f o r e s t e d l a n d s ; s econd, i t s h o u l d remove the o l d t i m b e r soon enough t o p r e v e n t d i s a s t -r o u s l o s s e s by i n s e c t s and f u n g i ... That t h e r e w i l l be a s a t -i s f a c t o r y p r o d u c t i o n from t h e m a t u r i n g second growth by the time the l a s t of t h e o l d has been d i s p o s e d o f i s a c o r o l l a r y o f the f i r s t o b j e c t i v e . 1 1 H i s c o n s i d e r a t i o n s o f the outcome o f u n d e r c u t t i n g l e d him t o comment t h a t the l o s s e s i n v o l v e d " s h o u l d n o t be u n d e r e s t i m a t e d i n the d e s i r e t o get immediate r e g u l a t i o n t h r o u g h u l t r a c o n s e r v a t i v e p l a n n i n g . R e g u l a t i o n o f the c u t s h o u l d n o t be a l l o w e d t o put s i l v i c u l t u r e i n a s t r a i t j a c k e t . I n any c a s e , i n f l e x i b l e c o n t r o l f o r an u n v a r y i n g a n n u a l p r o d u c t i o n w i l l p r o b a b l y be i m p o s s i b l e . " The damage done i n u s i n g w o r k i n g p l a n s t h a t produce o v e r - s t o c k i n g m ight even be s u f f i c i e n t t o wreck the o r d e r l y i n t r o d u c t i o n o f s u s t a i n e d - y i e l d management 12 t o t h e P r o v i n c e . 11. i b i d , p. 21+1 12. i b i d , p. 21+3 - 6 i | -Prom the d i s c u s s i o n above i t c a n be seen t h a t a s u s t a i n e d - y i e l d p o l i c y a l t h o u g h m u t u a l l y agreed upon has not been an easy p o l i c y t o put i n t o e f f e c t i n B r i t i s h Columbia. A major problem n o t e d i n the c h a p t e r came w i t h t h e need t o determine s u i t a b l e a d m i n i s t r a t i v e d e f i n i t i o n s f o r terms e s s e n t i a l t o s u s t a i n e d - y i e l d management. There were s e v e r a l m a j or r e v i e w s of t h e f o r e s t r e s o u r c e i n B r i t i s h Columbia t h a t c l o s e l y l o o k e d i n t o the way the s u s t a i n e d - y i e l d management programme was conducted and many of the recommendations o f thes e r e v i e w s p a r t i c u l a r l y from t h e R o y a l Commissions o f 1 9 4 5 and 1 9 5 6 have been implemented. I t i s i n t h i s way t h a t the a d m i n i s t r a t i v e p r o c e s s has been more t h a n s i m p l y an i n s t r u m e n t i n i n t r o d u c i n g s u s t a i n e d - y i e l d p o l i c i e s t o the P r o v i n c e , The a d m i n i s t r a t i v e p r o c e s s has a c t u a l l y g i v e n f u n c t i o n a l d e f i n i t i o n t o t h i s a s p e c t o f f o r e s t r e s o u r c e use p o l i c y i n B r i t i s h Columbia, When the recommendations have not been implemented i t has been l a r g e l y f o r t e c h n o l o g i c a l r e a s o n s . F o r example, mature t i m b e r has n o t been removed from some o f the more remote t r a c t s o f f o r e s t l a n d and w i l l n o t be u n t i l i t i s t e c h n o l o g i c a l l y f e a s i b l e and,to : a c e r t a i n e x t e n t , e c o n o m i c a l l y d e s i r a b l e t o do s o . A l s o , i n some o f t h e s e areas a g r e a t d i v e r s i t y o f s p e c i e s e x i s t s so t h a t i t i s d i f f i c u l t t o make up a s a t i s f a c t o r y i n v e n t o r y f o r a c c u r a t e c a l c u l a t i o n s . IV THE ADMINISTRATION OF ROYALTY AMD STUMPAGE Earliest alienations of timber lands carried with them almost no terms or conditions controlling or restricting harvesting. However within a few years the tenures were limited and charges, such as rental fees, renewal fees and royalty payments were required from lessees and licensees. These were monetary charges to be made in recognition of the value of the timber resource i t s e l f and on the understanding that a proportion of i t s worth should accrue to the public purse. Since these levies were f i r s t introduced there has been considerable legislative activity stemming from attempts to create an appropriate system for the assessment of dues. Apparently there has been l i t t l e doubt about the purposes or policy principles underlying royalty and stump-age payments for timber from Provincial forests even from the time they were f i r s t introduced. However the need to design an administrative system to function within the context of fluctuating market conditions and technological developments i n the forest and forest products industries has been a matter demanding continued attention. A feasible administrative system that w i l l bring a reasonable return to - 66 -the P r o v i n c i a l T r e a s u r y w h i l e a t the same time s p r e a d i n g the burden o f payment e q u i t a b l y amongst f o r e s t r e s o u r c e u s e r s has been the i d e a l somewhat d i f f i c u l t t o a t t a i n . The d i s c u s s i o n i n the f o l l o w i n g pages i s i n t e n d e d t o show how the a d m i n i s t r a t i v e p r o c e s s does not always g i v e p a r -amount importance t o the p o l i c y o b j e c t i v e s i t was meant t o p u r s u e . I t i s b e l i e v e d t h a t i n t h i s way and a l s o by d e l a y s i n making a d j u s t m e n t s t o s c h e d u l e s the a d m i n i s t r -a t i v e p r o c e s s has a f f e c t e d f o r e s t r e s o u r c e use p o l i c y i n B r i t i s h Columbia d u r i n g the p a s t s e v e n t y - f i v e y e a r s . The terms r o y a l t y and stumpage t e n d t o be used i n t e r c h a g e a b l y t o d a y . A l t h o u g h t h e i r o r i g i n s d i f f e r b o t h have been i n v o k e d i n B r i t i s h Columbia as methods o f ap-p r o p r i a t i n g t o t h e Crown i t s f a i r s h a r e o f t h e c u r r e n t v a l u e o f h a r v e s t e d t i m b e r . The concept o f r o y a l t y o r i g -i n a t e d i n B r i t i s h l a w , r e f e r r i n g t o the share o f n a t u r a l r e s o u r c e s r e s e r v e d f o r and by the s o v e r e i g n upon t h e i r e x p l o i t a t i o n . More r e c e n t l y , r o y a l t y has come t o mean a v a r i e t y o f Crown l e v i e s on b o t h p u b l i c l y and p r i v a t e l y owned n a t u r a l r e s o u r c e s . R o y a l t y payments a r e a l s o the method by w h i c h pr.ivate owners o f o t h e r t h i n g s - m i n e r a l d e p o s i t s , l i t e r a t u r e and a r t , p a t e n t s , e t c . - r e s e r v e f o r themselves a s h a r e i n the v a l u e o f t h e i r a s s e t s . I n - 67 -Canada Crown r o y a l t i e s on n a t u r a l r e s o u r c e s are u s u a l l y s p e c i f i e d i n d o l l a r s and are l e v i e s on u n i t s o f r e s o u r c e e x p l o i t e d ( a l t h o u g h f o r o i l and gas i t i s u s u a l l y a f i x e d p r o p o r t i o n o f t h e g r o s s v a l u e ) . 1 The term stumpage i s a l o o s e one n o r m a l l y used when r e f e r r i n g t o s t a n d i n g t i m b e r . "Stumpage v a l u e " i s the g r o s s v a l u e o f t h e t i m b e r , w h i l e "stumpage assessments" 2 ( i n B r i t i s h Columbia) r e f e r t o the a p p r a i s e d p r i c e . A l l Crown t i m b e r a l i e n a t e d s i n c e 1912 has been a p p r a i s e d by the B r i t i s h Columbia F o r e s t S e r v i c e so as t o e s t a b l i s h a minimum "stumpage p r i c e " p e r u n i t o f wood t h a t the g o v e r n -ment w i l l a c c e p t f o r e a ch major s p e c i e s . The a c t u a l p r o -cedures used today are d e s i g n e d t o e s t a b l i s h the net v a l u e o f t r a c t s of t i m b e r t o be h a r v e s t e d , by s u b t r a c t i n g from the e s t i m a t e d v a l u e o f the p r o d u c t s t h a t can be r e c o v e r e d from i t , the c o s t s n e c e s s a r y t o r e a l i z e those v a l u e s , i n -c l u d i n g a f a i r r e t u r n t o the o p e r a t o r . The p r i c e i s thus a r e s i d u a l v a l u e o r , pure economic r e n t , a l t h o u g h the a t t i t u d e o f l o g g e r s i s t o r e g a r d i t as a c o s t . T h e o r e t i c a l l y a p p r a i s a l s are i n t e n d e d t o e s t a b l i s h o n l y the minimum p r i c e , 1. P e a r s e , Crown Charges f o r E a r l y Timber R i g h t s , pp. 17-18. 2. i b i d , p.21. - 6 8 -above which competing logging operators might tender bids. In fact, however, public competition in Br i t i s h 3 Columbia is rare. The System of Royalty Payments The f i r s t royalties imposed on timber resources in British Columbia were introduced by the Land Act of 1 8 8 8 . Then a royalty of 5 0 cents per M fbm. was reserved on a l l timber lands sold subsequent to April 2 8 , 1 8 8 8 and, patented lands sold after April 7, I887. ^ Later in 1 9 0 1 , i t was ruled that royalty should not be considered as tax-ation i n connection with railway lands and therefore such lands, previously granted, were subject to the same royalty charges. In 1 9 0 3 a tax was imposed on a l l timber cut from lands on which royalty was not already reserved although, except for one per cent of i t , i t was rebated i f the timber was manufactured in the Province. Taxes were also paid on the assessed value of the land but, i f the land was clas-s i f i e d as wild land, ie, land carrying less than 5 fbm. per acre, i t was four per cent, wereas on land carrying more than 5 fbm, per acre the tax was two per cent of the assessed value of the land. 3 . Whitford and Craig, p .8 3 ; Pearse, Timber Appraisal, p. 1 5 1 . it. Whitford and Craig, p.81i. 5. ibid, p.85. - 6 9 -Timber l e a s e s a u t h o r i z e d by the 1 8 8 8 Land A c t were f o r terms not e x c e e d i n g t h i r t y y e a r s , a t a f i x e d r e n t a l of 1 0 c e n t s p e r a c r e and a r o y a l t y o f 5 0 c e n t s p e r M fbm. R o y a l t y was imposed on a l l l e a s e s g r a n t e d subsequent t o 1 8 7 9 and a 2 5 c e n t p e r M fbm. r e b a t e was a l l o w e d on a l l s p a r s , p i l e s , s h i n g l e s and m a n u f a c t u r e d lumber t h a t was e x p o r t e d , the same as i t was on the t i m b e r t a k e n from p r i v a t e l y owned l a n d . S u b s e q u e n t l y the term f o r l e a s e s was reduced t o twenty-one y e a r s and t h e n , i n 1 8 9 5 , the r o y a l t y s t i p u l a t i o n s were a l t e r e d t o the r e q u i r e m e n t t h a t 5 0 c e n t s p e r M fbm. be p a i d b u t , i f r e n t a l and r o y a l t y combined i n one y e a r d i d not e q u a l 5 0 c e n t s p e r a c r e , t h e l e s s e e must make up t h e d i f f e r e n c e . The 1 9 0 1 Land A c t a l l o w e d r e n e w a l of the o r d i n a r y twenty -one y e a r l e a s e s f o r c o n s e c u t i v e p e r i o d s w i t h the p r o v i s o , however, t h a t a l l l e a s e s and re n e w a l s were s u b j e c t t o the c o n d i t i o n s , r e g u l a t i o n s , r o y a l t i e s and r e n t a l t h a t might be i n e x i s t e n c e a t the t i m e . A l l t h i r t y - y e a r l e a s e s a l s o came under t h i s r u l i n g a l t h o u g h t h e o r i g i n a l terms of r o y a l t y , r e n t a l e t c . , a p p l i e d u n t i l t h e e x p i r a t i o n o f the f i r s t l e a s e . On p u l p l e a s e s , i n t r o d u c e d i n 1 9 0 1 , i t was i n i t i a l l y r e q u i r e d t h a t a l l p u l p be manu f a c t u r e d i n the P r o v i n c e and, any t i m b e r not used f o r p u l p was s u b j e c t t o - 70 -6 the same r o y a l t y as t h a t from l i c e n c e s and l e a s e s . The p i c t u r e a t t h i s s tage o f B r i t i s h Columbia's economic h i s t o r y i s one t h a t shows the Government d e c l a r i n g i t s r i g h t t o a r e t u r n on the P r o v i n c e ' s n a t u r a l r e s o u r c e s ; the r e t u r n s v a r y i n g as d i d t h e p r i c e s t o o p e r a t o r s . There i s a l s o apparent a tendency f o r the Government t o i n c r e a s -i n g l y r e s t r i c t the a c t i v i t i e s o f those who h e l d t e n u r e s f o r a l i e n a t e d t i m b e r l a n d s . At f i r s t r o y a l t y payments were a f i x e d amount but the p r i v i l e g e o f a d j u s t i n g the terms and c o n d i t i o n s , as t h e y saw f i t , was l a t e r assumed by the l e g i s l a t u r e and the M i n i s t e r . The P u l t o n Commission f a v o u r -a b l y r e p o r t e d the p r i n c i p l e o f the Government r e t a i n i n g f o r t h e p e o p l e a s h a r e o f the v a l u e o f s t a n d i n g t i m b e r as i t s h o u l d a c c r u e as b e i n g an " e n t i r e l y new" one. They were somewhat c o n c e r n e d , however, a t t h e degree o f u n c e r t a i n t y t h a t was a s s o c i a t e d w i t h the way i t was a d m i n i s t e r e d . I t was not p r o v i n g c o n d u c i v e t o i n d u s t r i a l development and 7 i n v e s t m e n t . As a r e s u l t of the Commission's d e l i b e r a t i o n s and a l s o the g e n e r a l v i e w s o f i n d u s t r y , d r a f t p r o p o s a l s f o r c e r t a i n f i x e d i n c r e a s e s t o accompany p r i c e r i s e s , were g i v e n s e r i o u s c o n s i d e r a t i o n . 6 . 7 . i b i d , pp. 8 6 - 8 9 . P u l t o n , p. DLj.6• - 7 1 -I n 191i|. The Timber R o y a l t y A c t was passed i n an attempt t o " d e f i n e t h e terms o f p a r t n e r s h i p " between the Crown and l i c e n s e e s as they s h a r e d t h e g r o s s stumpage v a l u e o f the P r o v i n c i a l t i m b e r r e s o u r c e s . The A c t took i n t o account the f a c t t h a t s e c u r i t y o f t e n u r e was e s s e n -t i a l f o r development o f the lumber i n d u s t r y . Moreover, as f u t u r e r a t e s c o u l d o n l y be guessed a t , a s l i d i n g s c a l e was d e v i s e d and i n c l u d e d so t h a t " the stumpage o b t a i n e d by the Government, i n time t o come, might r e f l e c t any changes i n t i m b e r v a l u e s " e i t h e r up o r down. The p r i n -c i p l e was i m p o r t a n t b u t , so t o o , was a degree o f p r a c -t i c a b i l i t y . Thus, the s l i d i n g s c a l e was not based on an ex a c t d e t e r m i n a t i o n o f the d i f f e r e n c e between s e l l i n g p r i c e and c o s t o f l o g g i n g and manufature but i n s t e a d , the average s e l l i n g p r i c e was us e d as the barometer f o r c a l c u l a t i n g stumpage v a l u e . An i n i t i a l i n c r e a s e i n stumpage too k p l a c e a t the end o f 1 9 1 4 and no f u r t h e r i n c r e a s e s were t o be made u n t i l t h e s e l l i n g p r i c e o f lumber pas s e d the $ 1 8 , 0 0 l e v e l . The A c t at t e m p t e d t o account f o r v a r i a t i o n s i n t i m b e r s t a n d s by e s t a b l i s h i n g 9 s t a t u t o r y r o y a l t i e s by s p e c i e s , grades and r e g i o n s . 8 . 9 . A n n u a l R e p o r t , 1 9 l 4 > P« 1 ° . A n n u a l R e p o r t , 1 9 l 4 > p, I . 6 - 72 -I t was c l a i m e d by t h e C h i e f F o r e s t e r i n 191it-» t h a t the A c t made i t p o s s i b l e f o r the Government t o g i v e s t a b i l i t y o f employment t o lumbermen w i t h o u t i n j u r y t o the p u b l i c i n t e r e s t . 1 0 N e v e r t h e l e s s , t h e Timber R o y a l t y  A c t brought w i t h i t p roblems. I t a t t e m p t e d t o e s t a b l i s h r a t e s f o r f o r t y y e a r s ; the s c h e d u l e of l e v i e s b e i n g r e v i s e d e v e r y f i v e y e a r s as the p r i c e s o f lumber changed. B u t , the p r i c e i n f l a t i o n d u r i n g W o r l d War 1 was so d r a -m a t i c t h a t the s i g n i f i c a n t i n c r e a s e s i n lumber p r i c e s t h r e a t e n e d t o b r i n g about the same i n c r e a s e s i n r o y a l t y payments. A more c a r e f u l e x a m i n a t i o n of the s i t u a t i o n , however, i n d i c a t e s t h a t the p r i c e i n c r e a s e s were p r i -m a r i l y the r e s u l t o f a d e c l i n i n g v a l u e of the c u r r e n c y on the i n t e r n a t i o n a l market. The t h r e a t e n e d i n c r e a s e s i n r o y a l t y c o u l d w e l l have made t i m b e r o p e r a t i o n s i n the P r o v i n c e uneconomic b u t , t h e Timber R o y a l t y A c t was am-mended and r o y a l t y payments were once a g a i n f i x e d by s t a t u t e . 1 1 I n t h e i r s t u d y o f t h e B r i t i s h Columbia f o r e s t r e s o u r c e , W h i t f o r d and C r a i g saw t h r e e f u n damental p r i n -c i p l e s I n c o r p o r a t e d i n the s c h e d u l e as i t was w r i t t e n 1 0 . op. c i t . 1 1 . P e a r s e , Crown charges f o r E a r l y Timber R i g h t s , p. 2 0 . ' - 73 -i n the Timber R o y a l t y A c t , These t h e y r e c o r d e d a s : (a) The p u b l i c i s e n t i t l e d t o a sh a r e i n the unearned inc r e m e n t due t o t h e i n c r e a s e i n t i m b e r v a l u e s ; (b) I t i s unwise t o impose a change w h i c h i s l i a b l e t o f o r c e the e x p l o i t a t i o n o f f o r e s t r e s o u r c e s beyond market r e q u i r e m e n t s ; and, (c) S e c u r i t y o f t i t l e i s e s s e n t i a l t o c a r r y out l a r g e -s c a l e b u s i n e s s operations."*"^ The approach used i n X91i+ i s p r i n c i p a l l y t he one used t o d a y . A l t h o u g h c o n s i d e r a b l e m o d i f i c a t i o n s have been i n t r o d u c e d from t i m e t o t i m e , t h e system i s n o t as s o -p h i s t i c a t e d as the a p p r a i s a l system used t o a s s e s s the stumpage o f Crown t i m b e r made a v a i l a b l e f o r h a r v e s t i n g . Today r o y a l t y i s ch a r g e d on t i m b e r h a r v e s t e d on o l d t e n u r e s , a c c o r d i n g t o the s c h e d u l e s e t out i n the F o r e s t A c t . On pre-empted l a n d s or g r a n t s made subsequent t o March 1914, r o y a l t y i s p a i d a t the time o f s c a l i n g , r e g a r d l e s s o f the time o f c u t t i n g . Where t i m b e r has not been s c a l e d by a l i c e n s e d s c a l e r o r O f f i c i a l S c a l e r , r o y a l t y i s charge d a t the h i g h e s t r a t e a p p l i c a b l e u n l e s s t h e r e i s s u f f i c i e n t e v i d e n c e f o r the M i n i s t e r t o e x e r c i s e 12. W h i t f o r d and C r a i g , p. 92 - 7k ~ h i s d i s c r e t i o n and a d j u s t the r a t e a c c o r d i n g l y . I f v a r i o u s r a t e s are a p p l i c a b l e , a p r o - r a t a assessment i s made and, t h e r a t e can be r e d u c e d i f the wood i s damaged by f i r e , f o r example. Even w i t h c u r r e n t r e f i n e m e n t s , however, the f i x e d r o y a l t y s c h e d u l e cannot t a k e i n t o account the wide v a r i a t i o n s t h a t o c c u r i n t i m b e r s t a n d s h a r v e s t e d from d i f f e r e n t t r a c t s i n the n a t u r a l f o r e s t a r e a s of t h e P r o v i n c e . The l e v y i n e v i t a b l y e x t r a c t s an i n c o n s i s t e n t f r a c t i o n o f the n e t v a l u e o f t i m b e r . As the Task F o r c e p o i n t e d out i n 1 9 7 4 : "Even i f r o y a l t y r a t e s were f i x e d at l e v e l s t h a t would e x t r a c t the f u l l n e t v a l u e o f h a r -v e s t e d t i m b e r i n a g i v e n c a t e g o r y on the a v e r a g e , a l l t h e t i m b e r o f above average v a l u e would be under p r i c e d and o p e r a t o r s would i n c u r a l o s s on t h e o t h e r h a l f (and hence have no f i n a n c i a l i n c e n t i v e t o remove i t ) ... A p a r t from i t s o b v i o u s i m p l i c a t i o n s f o r e f f i c i e n t f o r e s t u t i l i z a t i o n , the system c r e a t e s i n e q u a l i t i e s among o p e r a t o r s on f o r e s t s t a n d s o f d i f f e r e n t quality."' 1"-* Any r e f i n e m e n t s made t o t h e r o y a l t y s c h e d u l e m e r e l y t a k e i n t o account v a r i a t i o n s i n t h e g r o s s v a l u e o f the t i m b e r but not the 1 3 . P e a r s e , Crown Charges f o r E a r l y Timber R i g h t s , pp. 1 8 - 2 0 . - 75 -cost of harvesting i t . Royalt ies f i x e d i n do l l a r s per uni t harvested also suffer from inconsistency through t ime, for costs and prices both change r a p i d l y and dramat ica l ly . Only continuous readjustments can reduce the inconsis tencies to a minimal l e v e l . This has meant tha t , when economic changes occur the need ar ises to make changes i n the relevant s ta tutes . These changes i n statutes take place at i r r e g u l a r i n t e r v a l s . A more de-s i rab le system would be one designed to respond to changes i n the economy without the need for statute changes as i t i s w e l l known that i n s t i t u t i o n a l arrange-ments can make the process of statute changing a slow and cumbersome one i n modern s o c i e t i e s . A system w i t h th i s feature was recommended by the Pulton Commission i n 1910 when i t suggested that r o y a l t i e s be f ixed for no longer than one year at a t ime. An a l t e rna t ive system to the one provided for i n the Forest Act would involve the competitive sale of timber w i t h the government accepting the highest b id as the going p r i c e . A b r i e f glance at the h i s t o r y of timber disposal i n B r i t i s h Columbia, however, reveals tha t , although a recurr ing theme, competitive sales have not developed i n - 76 -p r a c t i c e . Furthermore, no owners of old temporary tenures i n good standing would include timber from the tenures i n such a system. Another alternative i s a system that requires separate appraisal of each tract of Crown timber made available f o r harvesting. The unique timber inventory, transportation conditions and costs of harvesting and development etc., could be taken into account. Then an approximation of the price the timber would y i e l d i n a competitive market could be made. The exigencies that existed i n the early decades of the century, ones which forced the general royalty concept to be used, on grounds of p r a c t i c a b i l i t y , are no longer s u f f i c i e n t reason f o r f a i l u r e to implement an accurate appraisal system. More-over, the Forest Service has wide experience that could be used i f t h i s design were implemented; i t i s the method already used to assess stumpage rates for timber disposal from Crown timber lands. The 1974 Task Force concluded that a system of appraisals offered "a f a r more equitable and consistent means of ascribing value to Crown timber and determining the public's equity i n i t " than the standard levy system. - 77 -In addition, " ... the adoption of appraised values for future royalties on old temporary tenures, as on Crown timber, would remove the financial uncertainty now faced by holders of these tenures by eliminating the prospect of statutory changes from time to time. ... In short ... royalties fixed by statute constitute an anachronism in a modern forest policy ... n 1^ The major d i f f i c u l t i e s they saw to implementing the system were, the existing def-iciency of forest inventory data on some of the old alienations necessary for the appraisal calculations and, the limited capacity of the Forest Service to accommodate a large number of new appraisals in a short period. 1^ Even so, they recommended that the appraisal system be intro-duced for levies on old temporary tenures. The System of Appraisal for Stumpage Basically the stumpage appraisal system requires data on selling price, operating costs and operators' profits. Each major species is evaluated separately. The Forest Service practice is to find the highest value of the end product at the earliest stage of processing where the timber quality is reflected. On the Coast the selling lij.. Pearse, Crown Charges for Early Timber Rights, pp. 21-23 15. ibid, pp. 36-38. I - 78 -price i s taken from the prices at the Vancouver Log 16 Market, i n cunits; i n the I n t e r i o r , the prices of the main conversion products, lumber and pulp chips are used i n the appraisal formula. Operating costs r e f l e c t the costs of 'an operator of average e f f i c i e n c y ' and the figure includes a wide range of expenses. Some of the costs are taken from actual operating expenditures of p a r t i c u l a r licensees, f o r example, costs of c r u i s i n g , s i t e treatments and re f o r e s t a t i o n ; others are compiled fo r the whole Forest D i s t r i c t or zone. P r o f i t i s a f r a c -t i o n of the combined operating and upset p r i c e . The basic rate applied to the Coast i s 10 per cent and, i n the I n t e r i o r 20 per cent; any d i f f e r e n t i a l i s meant to r e f l e c t the r i s k s involved i n a p a r t i c u l a r operation. By subtracting p r o f i t allowance from the conversion r e -turn, the appraised price i s calculated. I f there are no higher bids for the timber, this i s the amount, per cunit, that the licensee must pay i n stumpage charges to the Forest Service when the timber i s harvested. Later adjustments may be made. For example, the appraisal price i s adjusted whenever the products price for a p a r t i c u l a r species increases or decreases by at least $3*00 per cunit 16. See l i s t of abbreviations - 79 -of logs on the Coast or $5*00 per M fbm. i n the I n t e r i o r . Timber i s not permitted to be harvested at zero pr ice or l e s s . Maxima and minima have been set from time to time but the pract ice i s c r i t i c i z e d on the grounds i t d i s -criminates against the marginal operators when minima are used and, gives spec ia l advantage to the harvesters 17 of high q u a l i t y timber when maxima are used. Appraisa ls were f i r s t introduced i n 1910 fo l lowing methods already used i n the United States , Today, 85 per cent of the wood harvested i n B r i t i s h Columbia i s appraised. Forest Service personnel i n the f i e l d administer the system wi th assistance from s t a f f of the Technical Service Div-i s i o n located at headquarters i n V i c t o r i a , The f i e l d workers, under the general supervis ion of D i s t r i c t For-esters and wi th guidance from a Manual published by the Forest Serv ice , provide f i r s t hand information to supple-ment that of the Service on cost estimates and appropriate r i s k allowances for the pecu l i a r conditions of the part of the D i s t r i c t i n which they are working. D i s t r i c t appra i sa l o f f i ce r s are normally the more junior foresters and forest engineers who aspire to greater heights i n t h e i r fores t ry careers . They have no formal t r a i n i n g or p a r t i c u l a r 17. Pearse, Timber A p p r a i s a l , chapters 1 and 2 - 80 -experience when appointed and the turn over rate i s high. The appraisal system i s intended to bring about a s i t u a t i o n where the Crown and licensees share the f l u c -tuations i n market values of forest resource products. In a general sense the system works, e s p e c i a l l y when prices are good and a r t i f i c i a l l y f i x e d maxima and minima are not necessary. There are, however, fundamental weaknesses i n i t s administration which tend to cause discord between organizations within the forest industry as well as be-tween the Crown and the Forest industry as a-whole. The Forest Service, i n p r a c t i c e , gives appraisals a low p r i o r i t y even though the function i s an e s s e n t i a l one. It i s a task upon which other administrative functions depend. Also, i t i s one that plays a s i g n i f i c a n t part i n determining the f i n a n c i a l s i t u a t i o n of a large portion of the i n d u s t r i a l community of the Province and i t determines the amount returned to the public purse. For the system to work ef-f i c i e n t l y and e f f e c t i v e l y , appraisal o f f i c e r s need to perform with expertise. Their job requires judgment as appraisals are at best approximations and t h e i r accurate 18. i b i d , pp. llfij. - II4.6. - 8 1 -formation demands informed d i s c r e t i o n . The Forest Service, on the other hand, requires or offers no formal t r a i n i n g and there i s no career reward f o r those who excel. Further-more, the o f f i c e r often works with poor tools as c r u i s i n g techniques are not always s u f f i c i e n t l y precise and sensitive to produce es s e n t i a l information on decay, species com-pos i t i o n , volume etc. An additional weakness i n the system, one with p a r t i c u l a r relevance to stumpage price calculations on Coastal timber, i s the use of the Vancouver Log Market to determine the price of timber. The data are c o l l e c t e d and c o l l a t e d by the Council of Forest Industries which re-quires reports on prices paid at log sales. However, not a l l firms necessarily report a l l sales and, when they do, the prices are recorded i n cubic feet of timber. These data are then used by the Forest Service i n stumpage c a l -culations. The 1 9 7 4 Task Force recommended that the system would work rather better i f the Forest Service c o l -l ected the f i g u r e s , made i t compulsory f o r a l l prices to be reported by species and grade and, recorded i n standard 19 measures used i n industry. 7 1 9 . i b i d , pp. 3 3 - 3 4 - 82 -A somewhat more s o p h i s t i c a t e d system than the one j u s t d e s c r i b e d , i s c u r r e n t l y w o r k i n g i n the I n t e r i o r . I t r e p l a c e d t h e o l d system t h a t was r e s t r i c t e d t o t h e i n t e r m e d i a t e u t i l i z a t i o n p o r t i o n of t i m b e r . The c h i e f problem w i t h the o l d system was t h a t i t f o r c e d a l l e s t i m a t e s - s a l e s v a l u e s , c o s t s , p r o f i t s - t o be b a s e d on l o g g i n g and s a w m i l l i n g p r a c t i c e s t h a t are no l o n g e r p r e v a l e n t . The r e v i s e d a p p r a i s a l system has been d e s i g n e d t o p r o v i d e a r a t i o n a l method of e s t a b l i s h i n g the t r u e v a l u e o f t h e P r o v i n c i a l t i m b e r s t a n d s by making a p p r a i s a l s r e a l i s t i c , r e l a t i n g t o the f u l l volume e x p e c t e d t o be h a r v e s t e d from s p e c i f i c a r e a s . A l l s p e c i e s a r e a p p r a i s e d on t h e i r own m e r i t s , except f o r minor s p e c i e s f o r w h i c h r e a l i s t i c market v a l u e s cannot be e s t a b l i s h e d . P r o d u c t s c o n s i d e r e d are ones t h a t r e f l e c t the i n d u s t r y ; t h e y i n c l u d e sawlogs and p u l p l o g s , f o r example. L o g g i n g c o s t s i n c o r p o r a t e d i n the a p p r a i s a l are the F o r e s t S e r v i c e ' s b e s t e s t i m a t e o f a c t u a l c o s t s , t o the s t a n d a r d of u t i l i z a t i o n s p e c i f i e d i n the c u t t i n g t e n u r e , but t h e y are s t i l l based on the " r e a s o n a b l y e f f i c i e n t " c o n c e p t . F o r example, an approved c o s t o f main o r system r o a d c o n s t r u c -t i o n by the l i c e n s e e i s a l l o w e d by the stumpage o f f s e t method i e . , t h e l i c e n s e e i s not r e q u i r e d t o pay any stumpage u n t i l t he approved c o s t s a r e o f f s e t a g a i n s t t h e time i n the r e l e v a n t - 83 -20 licence. The discussion in this chapter has centred on ad-ministrative attempts to ensure that, the government gets a f a i r return from exploitation of the Provincial forest resource. Royalty and stumpage payment systems have been established to bring about this major policy objective but policy also requires that the burden of payments be equitably spread and that i t be reasonable and f a i r so that industry w i l l continue to operate. It has been largely the limited capability of the administrative system to deal with its environment that has hampered i t s attempt to meet policy demands. In the chapter i t is noted especially that schedules for payments have not kept abreast of dramatic and frequent changes i n market conditions. It i s noted also that significant developments i n forest industry technology often have meant the use of inappropriate methods of assessing costs, profits and prices. However the administrators have not given a high priority to the job of appraising causing the ad-ministrative process to function at less than an optimum level for the purpose of achieving policy objectives. Considerable changes have been made to methods of assessing royalty and stumpage payments in recent years and more changes are imminent. The changes have been introduced with the expectation that the administrative process can function in such a manner as to more nearly bring about stated policy objectives. 20. B. C. Forest Service, Information Paper on the Revised Appraisal System for the B. C. Interior, Sept. 1973* chapters 3 & 4« V CONCLUSION I n the i n t r o d u c t i o n t o t h i s paper i t was o bserved t h a t the p r i n c i p l e s s e t t i n g out t h e g e n e r a l d i r e c t i o n o f f o r e s t r e s o u r c e use p o l i c y i n B r i t i s h Columbia have been w e l l e s t a b l i s h e d and c l e a r l y s t a t e d as b e i n g : ( i ) p u b l i c ownership of f o r e s t l a n d s ; ( i i ) a r e t u r n t o the P r o v i n c i a l T r e a s u r y o f t h e w e a l t h of the f o r e s t s as i t a c c r u e s ; and, ( i i i ) e x t e n s i o n o f the u s e f u l l i f e o f the f o r e s t s f o r the b e n e f i t of f u t u r e g e n e r a t i o n s . Such s t a t e m e n t s of p o l i c y p r i n c i p l e s and p o l i c y o b j e c t i v e s are f o r m u l a t e d i n the most g e n e r a l sense on a b a s i s o f p o l i t i c a l i d e o l o g y and p o l i t i c a l pragmatism. However when att e m p t s a r e made t o put p o l i c y p r i n c i p l e s i n t o e f f e c t more t a n g i b l e c o n s t r a i n t s can m o d i f y , perhaps q u i t e e x t e n s i v e l y , the o r i g i n a l p o l i c y f o r m u l a t i o n s . A s t u d y of the a d m i n i s -t r a t i v e p r o c e s s o f t e n makes e v i d e n t some o f the more t a n -g i b l e c o n s t r a i n t s . W i t h t h i s i n mind t h e q u e s t i o n was r a i s e d a t the o u t s e t o f t h i s t h e s i s : I n what ways and t o what e x t e n t does the a d m i n i s t r a t i v e p r o c e s s a f f e c t f o r e s t r e s o u r c e use p o l i c y i n B r i t i s h Columbia? Three a s p e c t s o f f o r e s t r e s o u r c e use p o l i c y were i d e n t i f i e d as s a l i e n t and - 85 -have been d i s c u s s e d i n Chapters Two, Three and P o u r . The s t u d y as a whole c o n f i r m s the a s s u m p t i o n t h a t t h e a d m i n i s t r a t i v e p r o c e s s m o d i f i e s p o l i c y f o r m u l a t i o n s . Each c h a p t e r shows how t h i s o c c u r s and t h e e x t e n t t o w h i c h i t o c c u r s i n the r e s p e c t i v e a r e a of f o r e s t r e s o u r c e use p o l i c y a d m i n i s t r a t i o n i t c o v e r s . 1 The s t u d y of r e l e v a n t e a r l y l a n d t e n u r e deve-lopments i l l u s t r a t e s t h e p r i m a r y r o l e o f l a n d ownership i n f o r e s t r e s o u r c e u t i l i z a t i o n and e x p l o i t a t i o n i n B r i t i s h Columbia. O r i g i n a l l y Crown G r a n t s were i n t e n d e d s i m p l y t o complement o t h e r development p o l i c i e s w h i l e l e a s e s and l i c e n c e s were c o n s i s t e n t l y made s u b j e c t t o con-d i t i o n s t h a t would encourage i n d u s t r i a l e x p a n s i o n i n t h e P r o v i n c e . One s uch c o n d i t i o n o f t e n i n c l u d e d was the r e -quirement of an a p p u r t e n a n t m i l l . L a t e r , l a n d was c l a s s -i f i e d so t h a t a g r i c u l t u r a l s e t t l e m e n t r e q u i r e m e n t s c o u l d be met and t h e s e needs were g i v e n p r i o r i t y o v e r p u r e l y f o r e s t r e s o u r c e needs. The a s s u m p t i o n was t h a t f o r e s t l a n d s were v i r t u a l l y u n l i m i t e d . Once i t was a c c e p t e d t h a t f o r e s t l a n d was i n d e e d l i m i t e d and the v a l u a b l e t i m b e r r e s o u r c e might one day be i n s h o r t s u p p l y i t became e s t a b l i s h e d p o l i c y t h a t t h e r e s h o u l d be p u b l i c ownership o f f o r e s t l a n d . There was some d i f f i c u l t y i n d e t e r m i n i n g what c o n s t i t u t e d f o r e s t - 86 -l a n d . What c o n s t i t u t e s f o r e s t l a n d i n f a c t has been dependent upon the s t a t e o f the economy as w e l l as upon somewhat sub-j e c t i v e a d m i n i s t r a t i v e n o t i o n s o f the s t a t e of the f o r e s t s and e s t i m a t e s o f the w o r t h o f c o m m e r c i a l l y a v a i l a b l e t i m b e r . A more s i g n i f i c a n t r e a s o n as t o why the a d m i n i s t r a t i v e p r o c e s s has not a c h i e v e d f u l l y i t s s t a t e d p o l i c y o b j e c t i v e s ' i s t h a t a v e r y complex s e t of c o n d i t i o n s and r e g u l a t i o n s has been d e v e l o p e d by the a d m i n i s t r a t i v e p r o c e s s f o r c o n t r o l l i n g f o r e s t l a n d s . These have become s u c h a b e w i l d e r i n g mosaic t h a t t h e a d m i n i s t r a t i v e p r o c e s s a c t u a l l y has produced unde-s i r a b l e outcomes. F o r example, l a r g e - s c a l e o p e r a t o r s have been g i v e n f a v o u r a b l e t r e a t m e n t l e a v i n g s m a l l independent l o g g e r s i n a v u l n e r a b l e p o s i t i o n . A l s o much o f the f o r e s t l a n d r e t a i n e d by the Crown has been l e f t i n s u c h a c o n d i t i o n a f t e r l o g g i n g t h a t the f o r e s t r e s o u r c e w i l l not p e r p e t u a t e i t s e l f f o r the f u t u r e g e n e r a t i o n s o f t h e P r o v i n c e . S u s t a i n e d - y i e l d management of P r o v i n c i a l f o r e s t s was w i d e l y a c c e p t e d as a m a t t e r o f p o l i c y i n B r i t i s h Columbia f o r some time p r i o r t o t h e e x p l i c i t commitment t o i t s a d m i n i s t -r a t i v e p r a c t i c e . The a c t u a l i n t r o d u c t i o n o f a programme - 87 -f o r s u s t a i n e d - y i e l d management o f f o r e s t s was r e g a r d e d as b e i n g f o r t h e g e n e r a l g o o d o f t h e P r o v i n c e i n t h a t i t was t h o u g h t t o be p r u d e n t t o e n s u r e a n a t u r a l f o r e s t r e s o u r c e f o r s u c c e e d i n g g e n e r a t i o n s . E v e n i n t h e e a r l y s t a g e s s u p p o r t f o r t h e programme came f r o m b o t h government and i n d u s t r y . The government saw i n i t t h e means o f e s t -a b l i s h i n g a g u a r a n t e e d s o u r c e o f income w h i l e f o r i n d u s t r y i t g u a r a n t e e d a s u p p l y o f raw m a t e r i a l s f o r m i l l s . B o t h s e c t o r s a n t i c i p a t e d a n i n c r e a s e i n i n d u s t r i a l a c t i v i t y t o r e s u l t f r o m the a c t i o n . C h a p t e r T h r e e shows c l e a r l y t h a t t h e i n i t i a l p o l i c y f o r m u l a t i o n s were on t h e w h o l e v e r y g e n e r a l s t a t e m e n t s p r e s e n t e d i n c o n c e p t u a l t e r m s . B o t h government and i n d u s t r y a g r e e d t o e s t a b l i s h i n g a s u s t a i n e d - y i e l d programme b u t e a c h xtfith i t s own u n d e r s t a n d i n g o f how t h e p o l i c y w o u l d f u n c t i o n . Once e f f o r t s were made t o a d -m i n i s t e r the programme i t was f o u n d t h a t t e r m s u s e d i n the i n i t i a l p o l i c y f o r m u l a t i o n s were n o t s u i t a b l e f o r i m m e d i a t e a p p l i c a t i o n i n t h e a d m i n i s t r a t i o n o f ' t h e p o l i c y programme. C o n f l i c t s a r o s e be tween government and i n d u s t r y and w i t h i n i n d u s t r y as t h e d i f f e r e n t p a r t i e s a c t e d u p o n t h e i r own i n t e r p r e t a t i o n s o f t e rms e s s e n t i a l t o s u s t a i n e d - y i e l d man-agement . F o r the a d m i n i s t r a t i v e p r o c e s s t o f u n c t i o n and f o r the programme t o be s u c c e s s f u l l y p u r s u e d i t was f o u n d - 88 -n e c e s s a r y t o c l a r i f y terms such as a l l o w a b l e a n n u a l c u t , i n c r e m e n t b a l a n c e and r o t a t i o n and a l s o t o e s t a b l i s h f o r m u l a e a p p r o p r i a t e t o the c o n d i t i o n s i n B r i t i s h Columbia's f o r e s t s . The a d m i n i s t r a t i v e p r o c e s s thus p r o v i d e d admin-i s t r a t i v e d e f i n i t i o n s f o r f o r e s t r e s o u r c e use p o l i c y o b j e c t i v e s . Chapter Pour i s a d i s c u s s i o n o f the a f f e c t the a d m i n i s t r a t i v e p r o c e s s has on f o r e s t p o l i c y o b j e c t i v e s w i t h r e s p e c t t o r o y a l t y and stumpage payments. D u r i n g the p a s t s e v e n t y - f i v e y e a r s the P r o v i n c i a l Government has f o r m a l l y a c c e p t e d the p r i n c i p l e t h a t the P r o v i n c e i s en-t i t l e d t o a share o f the r e t u r n p r i v a t e o p e r a t o r s e a r n from t h e i r e x p l o i t a t i o n o f P r o v i n c i a l f o r e s t s . However t h e r e have been r e c u r r i n g problems i n a d m i n i s t e r i n g the p o l i c y and a l t h o u g h t o d a y . t h e r e i s a complex machine i n o p e r a t i o n f o r the assessment and c o l l e c t i o n o f r o y a l t y and stumpage payments the system i s thought t o be not adequate, not even the optimum a v a i l a b l e , f o r the a t -tainment o f p o l i c y o b j e c t i v e s . I t was w e l l u n d e r s t o o d from the b e g i n n i n g by b o t h government and i n d u s t r y t h a t f a i r and e q u i t a b l e assessments were t o be made and t h a t r e a s o n a b l e r e t u r n s were t o a c c r u e to the P r o v i n c i a l T r e a s u r y . B u t , the a t t a i n m e n t o f p o l i c y o b j e c t i v e s has - 8 9 -bean hampered by the l i m i t e d c a p a b i l i t y o f the admin-i s t r a t i v e s y s t e m t o d e a l w i t h i t s environment. S p e c i -f i c a l l y Chapter Pour shows t h a t r o y a l t y and stumpage payment systems a c t u a l l y put i n t o e f f e c t i n B r i t i s h Columbia have o f t e n r e s u l t e d i n i n c o n s i s t e n c i e s i n the e x t r a c t i o n o f the n e t v a l u e o f t i m b e r from o p e r a t o r s . T h i s has meant t h a t some of the l a r g e r o p e r a t o r s have been g i v e n f a v o u r e d t r e a t m e n t and the p o l i c y r e q u i r e -ments t h a t assessments be f a i r and e q u i t a b l e have not been adhered t o . I n a d d i t i o n t h e r e have been f l u c t u -a t i o n s i n lumber p r i c e s t h a t have c r e a t e d t h e need f o r c o n s t a n t l y changing s c h e d u l e s . These c o n d i t i o n s have f o s t e r e d d i s c o n t e n t amongst o p e r a t o r s so r e d u c i n g t h e i r w i l l i n g n e s s t o c o o p e r a t e w i t h a d m i n i s t r a t o r s . They have, t o g e t h e r w i t h s i g n i f i c a n t changes i n f o r e s t r y t e c h n o l o g y , put c o n s i d e r a b l e demands on the a d m i n i s t r a t i v e system. The o v e r a l l a f f e c t has been t o l i m i t the e f f e c t i v e n e s s o f the a d m i n i s t r a t i v e p r o c e s s i n i t s aim t o b r i n g about d e s i r e d p o l i c y outcomes. Prom time t o time a l t e r n a t i v e systems t o improve the e f f e c t i v e n e s s of the a d m i n i s t r a t i v e p r o c e s s have been c o n s i d e r e d . However, a l t h o u g h many of them appear s a t i s f a c t o r y i n the a b s t r a c t t hey u s u a l l y have drawbacks t h a t make them i n a p p l i c a b l e t o r e a l w o r l d c o n d i t i o n s . - 90 -, A further point in Chapter Pour needs to be noted here as further evidence of how even apparently minor features of the administrative process can modify the outcome of forest resource use policy. In the chapter particular reference is made to the low priority given the job of appraising when in fact the task i s one essential to this aspect of forest policy administration and'one requiring considerable s k i l l . By giving greater recog-nition to the responsibilities of the job and also to the value of experience and training i n task performance, the functioning of the administrative process could be improved and forest resource use policy objectives more nearly attained. To conclude this thesis several statements can be made in answer to the question: In what ways and to what extent does the administrative process affect forest resource use policies i n British Columbia? The three central chapters confirm that there is an affect; each illustrates how policy principles and policy objectives are modified by the administrative process established for the purpose of putting the policies into action. What types of affect are there? In the f i r s t place as seen in Chapter Two, the administrative control procedures can - 91 -become complex t o the e x t e n t t h a t p o l i c y o b j e c t i v e s not f u l l y a t t a i n e d and a l s o u n d e s i r a b l e consequences are b r o u g h t a b o u t . S e c o n d l y , i n d e v e l o p i n g a d m i n i s t r a t i v e d e f i n i t i o n s o f terms the a d m i n i s t r a t i v e p r o c e s s m o d i f i e s i n i t i a l f o r m u l a t i o n s o f f o r e s t p o l i c y o b j e c t i v e s . F i n a l l y , t h e r e are l i m i t s t o the c a p a b i l i t y o f the a d m i n i s t r a t i v e m a c h i n e r y i t s e l f . These cause the outcomes of t h e a d m i n i s -t r a t i v e p r o c e s s t o be m o d i f i e d v e r s i o n s o f i n i t i a l s t a t e m e n t s o f p o l i c y p r i n c i p l e s and o b j e c t i v e s . What i s the e x t e n t o f the e f f e c t ? The t e x t does not p r o v i d e an e m p i r i c a l answer t o the q u e s t i o n . What i t does i n d i c a t e however, i s t h a t the a f f e c t i s w i d e s p r e a d . The t h r e e major a s p e c t s of f o r e s t r e s o u r c e use p o l i c y a d m i n i s t r a t i o n i n B r i t i s h Columbia t h a t are c o n s i d e r e d are q u i t e d i v e r s e i n n a t u r e w h i l e the impact t h e y make i s f e l t by a l l u s e r s o f the r e s o u r c e . The t h e s i s shows how the a d m i n i s t r a t i v e p r o c e s s i s t h e i n s t r u m e n t t h r o u g h w h i c h p o l i c y p r i n c i p l e s and o b j e c t i v e s d e r i v e a f u n c t i o n a l f o r m a t . I t i s r e a s o n a b l e t o c o n c l u d e from t h i s s t u d y t h a t i n p r o v i d i n g f u n c t i o n a l meaning f o r f o r e s t r e s o u r c e use p o l i c i e s i n B r i t i s h Columbia the a d m i n i s t r a t i v e p r o c e s s has l e f t an i n d e l i b l e mark on the p o l i c i e s t h e m s e l v e s . BIBILIOGRAPHY Lowell BESLEY, "Taxation of Crown-Granted Timberlands i n B r i t i s h Columbia", Forestry B u l l e t i n , No. 1, February 1 9 5 1 . B r i t i s h Columbia Forest Service, Information Paper on the  Revised Appraisal System for the B. C. I n t e r i o r , September, 1973. B r i t i s h Columbia Forest Service, Basic Course i n Forest  Administration, (Queen's Printer; V i c t o r i a , ) 1974. B r i t i s h Columbia Forest Service, Annual Report, 1912-1974* ( f i r s t known as the Forest Branch! Paul E. BRUITS, Applied Forest Management, (Edwards Bros.: Ann Arbor, Michigan) 1954. W. A. CARROTHERS, "Forest Industries of B r i t i s h Columbia" i n A. R. M. Lower,-North American Assault on the Canadian  Forest, (Greenwood: N.Y.) 196b ( o r i g . 1930). Samuel T. DANA, Forest and Range Policy, (McGraw H i l l : N.Y.) 1 9 5 6 . . " Y. DROR, Public Policymaking Re-examined, (Chandler: Scranton, Perm.) i 9 6 0 . Michael FROME, The Forest Service, (Praeger: N.Y.) 1971. Luther H. GULICK, American Forest Policy, (Duell, Sloan and Pearce; N.Y.) 1951. J . A. GUTHRIE and G. R. ARMSTRONG, Western Forest Industry  and Economic Outlook, (John Hopkins! Baltimore) 1961. W. G. HARDWICK, The Geography of the Forest Industry of  Coastal B r i t i s h Columbia, (U.B.C: Vancouver) 1963. Thomas A. HEBERLEIN, The Land Ethic Realized: Some So c i a l Psychological Explanations f o r Changing Environmental Attitudes, Journal of So c i a l Issues, 28, J+, 1972, 79-87. Herbert KAUFMAN, The Forest Ranger: a study i n administrative  behavior, (John Hopkins: Baltimore) 1967. - 9 3 -P a u l R. LAWRENCE & J a y W. LORSCH, O r g a n i z a t i o n and E n v i r o n -ment, ( R i c h a r d I r w i n : Homewood, 111.) 1969. S. M. LIPSET, A g r a r i a n S o c i a l i s m ( U n i v . o f C a l i f o r n i a P r e s s : B e r k e l e y , C a l i f . ) 1950. Joseph P. MARTINO, T e c h n o l o g i c a l F o r e c a s t i n g f o r D e c i s i o n -making , ( E l s e v i e r : N.Y.) 1972. F. D. MULLHOLLAND, The F o r e s t Resources o f B r i t i s h C olumbia, (Department of Lands and F o r e s t s : V i c t o r i a , B. C.) 1937'• C. D. ORCHARD, " P r o p o s a l s f o r R e h a b i l i t a t i o n Employment i n F o r e s t r y i n B. C." i n , The Canadian F o r e s t r y S i t u a t i o n , R e p o r t s and papers p r e s e n t e d t o the 36th A n n u a l M e e t i n g of the Canadian S o c i e t y of F o r e s t E n g i n e e r s , 19l4lf.. C. D. ORCHARD, F o r e s t A d m i n i s t r a t i o n i n B. C , A b r i e f f o r p r e s e n t a t i o n - t o . the R o y a l Commission, V i c t o r i a , 191+5. F. C. OSMASTON, The Management of F o r e s t s , ( A l l e n & Unwin: London) 1968. G i f f o r d PINCHOT, The F i g h t f o r C o n s e r v a t i o n , ( U n i v e r s i t y o f W a s h i n g t o n P r e s s ! S e a t t l e ) 1967. G i f f o r d PINCHOT, B r e a k i n g New Ground, ( U n i v e r s i t y o f W ashington P r e s : S e a t t l e ) 1972. P r o c e e d i n g s : . F u t u r e o f F o r e s t r y Symposium, F a c u l t y o f F o r e s t r y and Centre f o r C o n t i n u i n g E d u c a t i o n , U.B.C., 1971. H a r o l d M. PROSHANSKY, "The E n v i r o n m e n t a l C r i s i s i n Human D i g n i t y " . J o u r n a l , o f S o c i a l I s s u e s , 29, I+, 1973, 1-20. P r o v i n c e o f B r i t i s h Columbia, C o n s o l i d a t i o n o f F o r e s t r y  S t a t u t e s and. R e g u l a t i o n s , C o n s o l i d a t e d and amended, December, 1974. F.L.C. REED & A s s o c i a t e s , The B r i t i s h Columbia F o r e s t  I n d u s t r y : . i t s d i r e c t and i n d i r e c t impact on the economy, b e i n g a r e p o r t p r e p a r e d f o r the P r o v i n c i a l Department of Lands, F o r e s t s and Water R e s o u r c e s , 1973. - 94 -R o y a l Commission, 1909-1910, P i n a l R e p o r t , F r e d P u l t o n ( c h a i r m a n ) , K i n g ' s P r i n t e r , V i c t o r i a , B. C , 1910. R o y a l Commission, 1945, Gordon McG. S l o a n ( c h a i r m a n ) , K i n g ' s P r i n t e r , V i c t o r i a , B. C , 1945 • R o y a l Commission, 1955-57, Gordon McG. S l o a n ( c h a i r m a n ) , Queen's P r i n t e r , V i c t o r i a , B. C., 1957• R o y a l Commission on F o r e s t r y Resources 1955-57, s u b m i s s i o n o f the Canadian P u l p and Paper A s s o c i a t i o n . P. E. SELZNICK, T.V.A. and t h e Gra s s Roots ( U n i v . o f C a l i f . B e r k e l e y , C a l i f . ) 1949. J . H a r r y G. SMITH, "Wood s u p p l y i n B r i t i s h Columbia -P r e s e n t and P o t e n t i a l " i n , B r i t i s h Columbia's F u t u r e i n F o r e s t P r o d u c t s T r a d e - i n A s i a and the P a c i f i c A r e a , U.B.C, T 9 5 F . — : : ~ I r a SHARKANSKY, P o l i c y A n a l y s i s , i n P o l i t i c a l S c i e n c e , (Markham: Chicago) 1970. H. A. SIMON, A d m i n i s t r a t i v e B e h a v i o r , (Free P r e s s : N.Y.) 1957. Task F o r c e on Crown Timber D i s p o s a l , Crown Charges f o r E a r l y . T i m b e r R i g h t s , . P . H. P e a r s e , ( c h a i r m a n ) , V i c t o r i a , B. C.,.February 1974. Task F o r c e on Crown Timber D i s p o s a l , Timber A p p r a i s a l , P. H. Pearse ( c h a i r m a n ) , V i c t o r i a , B.C. September, 1974* Task F o r c e on Crown Timber D i s p o s a l , F o r e s t Tenures i n B r i t i s h Columbia, P..H. Pearse ( c h a i r m a n ) , V i c t o r i a , B.C. December, 1974* H. N. WHITFORD & R. D. CRAIG, F o r e s t s o f B r i t i s h Columbia, f o r the Dominion Commission on C o n s e r v a t i o n , Ottawa, 1918. A l b e r t C. WORRELL, P r i n c i p l e s o f F o r e s t P o l i c y , (McGraw H i l l : N.Y.) 1970. 

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