Economics

The management of private forests provides numerous socio-economic benefits by supporting a range of industries. Management activities support silvicultural workers and businesses across rural Canada, while steady roundwood supplies support the regional economic activity generated by the forest industry.

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The Economics of Private Forests

Although private forest land represents only 6% of Canada’s forest, roughly 15% of all roundwood is harvested from these forests. In 2018, the National Forestry Database estimated that nearly 24 million cubic meters were harvested from private lands. However, the full economic potential of private forests is far from being reached.

Generally, the low profitability of forest activities on small forest holdings have prevented many woodlot owners from deploying sufficient management activities in their forests. Governments are encouraged to help Canadian forest owners to fulfill their potentials through various measures.

By helping forest owners, the government increases the supplies of forest products, the regional economic activity as well as the environmental services expected by Canadian society.

CFFO commits to help Canadian forest owners increase the economic benefits generated by their private forestlands. As such, it advocates at a federal level on a number of issues.

Personal Silvicultural Savings & Investment Plan for Canadian Woodlot Owners

Canada’s private family woodlots belong to 450,000 Canadian families. The management of these private family forests provides numerous socio-economic benefits by supporting a range of industries, and generates environmental benefits by protecting biodiversity as well the quality of water and air.

Various factors, including the low profitability of forest management activities on smaller forest areas, have discouraged many woodlot owners from actively managing their woodlots. The Government has a number of tools available to encourage woodlot owners to more intensively manage their woodlots. Historically, direct subsidies were the favoured means. Today, income tax measures can be used as an additional tool to encourage active management by greater numbers of woodlot owners and increase supplies of forest products as well as the environmental services expected by Canadian society.

While intensive management of woodlots provides these major benefits to society, the lack of adequate support will prevent private woodlots from reaching their potential since most woodlot owners will not see sufficient personal benefits to justify pursuit of these activities.

We therefore propose the creation of a Personal Silvicultural Savings and Investment Plan which would allow woodlot owners to place a portion of their forestry revenue in a tax shelter for the purpose of future investments in silviculture and other forms of forest management.

Forest owners live in rural areas in Canada, meet 15% of the raw material needs of Canada’s forest industries, manage an exceptional land base in terms of biodiversity, contribute to air and water quality across rural Canada, and provide leisure areas near urban centres.

Consult CFFO’s brief on the Personal Silvicultural Savings & Investment Plan.

The Softwood Lumber Dispute

CFFO seeks an exemption for roundwood from private forests be included in any future softwood lumber agreement between Canada and the United States.

Canada’s private forests are similar to private forests in the United States in almost all aspects. Woodlot owners on both sides of the border have similar motivations, benefit from financial assistance to perform the silvicultural operations required by their respective societies and operate in an analogous commercial environment in which they have to negotiate satisfactory terms of sale for their roundwood.

Even though it is the Canadian public forest model that has been denounced by U.S. pressure groups, Canadian forest owners have suffered from collateral damage in this long lasting conflict over softwood lumber.

If Canadian woodlot owners were granted an exemption for their roundwood, the free market in wood from private forests would play a much bigger role in supplying Canadian sawmills. This corresponds to the objective sought by the U.S., since it is the existing American model.

Since government management of a large percentage of Canadian forests has been a historical irritant in trade relations between the United States and Canada, it makes no sense that trade agreements do not encourage the private ownership of forests by singling out this source of supply to sawmills.

This is why Canadian lumber made from roundwood from private forests and with demonstrated traceability must be granted an exemption from countervailing duties and quotas.

Consult CFFO’s newsletter, brief and presentation on the Softwood Lumber Dispute.


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