Fisheries and Land Resources
August 30, 2018

Measures Scheduled for New Year Aimed at Increasing Timber Allocations and Harvest Levels

To advance commitments to increase timber allocations and harvest levels by 20 per cent by 2020 as outlined in The Way Forward, the Provincial Government’s Commercial Cutting Permit Allocation policy will come into effect January 1, 2019.

The policy – first announced in March 2018 – is designed to increase resource usage and the amount of commercial volume harvested, and to provide more opportunities to promote forest industry growth.

Approximately 90 per cent of the province’s commercially available forest resource is allocated every year, yet less than 60 per cent of that allocation is harvested. Under the new policy, traditionally underutilized timber will be available to new entrants and contractors who are able to meet the increased capacity. Fisheries and Land Resources staff will evaluate the previous two years of logging activity to guide recommendations on future permit volumes. This will ensure that allocations are matched with a company’s ability to harvest and market their products.

Other measures aimed at increasing timber allocations and harvest levels announced in March 2018 are already in place, including Timber Sale Agreements (TSA) and Five-year Commercial Cutting Permits.

TSAs provide qualifying businesses with new access to forested Crown land through an open, fair and competitive bidding process. These contractual agreements between government and a business give businesses new access to harvest five per cent of the provincial Annual Allowable Cut. One TSA has been awarded for Red Indian Lake to date. Current TSAs are available in Forest Management Districts 19, 8, 2 and 5. Details are listed on the Department of Fisheries and Land Resources website.

Five-year Commercial Cutting Permits will be issued to permit holders who consistently harvest annual volumes of 5,000 cubic metres to 50,000 cubic metres. Permits will be allocated in Forest Management Districts that have sufficient timber and resource access and granted to existing operators who have demonstrated a history of harvesting their annual commercial cutting permits. This measure provides long-term security and improved resource access to qualifying forest operators, which encourages industry investment and growth. Two five-year permits have been awarded in the Springdale-Baie Verte and Roddickton areas since the policy was announced.

This initiative delivers on commitments in The Way Forward to strengthen the province’s economic foundation. The Way Forward outlines all actions the Provincial Government is taking to achieve a strong, diversified province with a high standard of living, and can be viewed at thewayforward.gov.nl.ca.

Quotes
“The Commercial Cutting Permit Allocation policy was created to ensure more commercial volume is harvested, and to increase business opportunities for new entrants and existing operators within the forest sector. These upcoming changes support our Way Forward commitment to increase harvest levels by 20 per cent by 2020, and will ensure better use of our valuable timber resource when the policy comes into effect in the new year.”
Honourable Gerry Byrne
Minister of Fisheries and Land Resources

“The Newfoundland and Labrador Forest Industry Association looks forward to the implementation of the Commercial Cutting Permit Allocation policy in 2019. This progressive change will ensure our province’s renewable timber resource is utilized in a sustainable, progressive manner that will continue to strengthen Newfoundland and Labrador’s forest economy.”
Bill Dawson, Executive Director
Newfoundland and Labrador Forest Industry Association

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Learn More

Provincial Government Announces New Measures Aimed at Increasing Timber Allocations and Harvest Levels

Timber Sale Agreements

Commercial Cutting Permits

Cutting Permit Allocation Policy

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Media contacts
Linda Skinner
Fisheries and Land Resources
709-637-2284, 632-8167
lindaskinner@gov.nl.ca

Bill Dawson
Newfoundland and Labrador Forest Industry Association
709-640-2485
Bill@nlfia.ca

Backgrounder

Cutting Permit Allocation Policy

  • The Provincial Government will implement new measures under the Cutting Permit Allocation policy effective January 1, 2019.
  • The measures are intended to promote better utilization of the resource, increase commercial volume harvested, promote forest industry growth and provide more forest industry opportunities.
  • The policy direction provides consistent, evidence-based and standardized commercial allocation guidelines.
  • Individual commercial permit allocations will be matched to the operator’s capacity to harvest and sell timber.
  • New applicants will be required to demonstrate the economic and operational viability of their operations. They will be required to provide detailed information on their business, including operational capacity, marketing plan, management structure, potential employment opportunities and finances.
  • The policy will provide further direction to forestry officials when dealing with operators who have harvested less than 75 per cent of their allocated volume in the previous two consecutive years.
  • If an operator’s harvesting activity is below 75 per cent, then their new permit will be issued at a volume equal to the highest volume achieved in the last two calendar years.
  • Any operator who has failed to harvest any volume in the previous two calendar years would be considered a new applicant.
  • As per the Forestry Act section 27. (5.1) (5.2);
    • The issuance of a Commercial Cutting permit does not create the right or expectation for the renewal of a cutting permit; and
    • If a person who has been issued a cutting permit believes they have the right of renewal, they do not have cause for compensation.
  • Timber that has been traditionally underutilized will now be available to new entrants and existing commercial permit holders who are able to meet their operational capacity.

Timber Sale Agreements

  • A Timber Sale Agreement is a contractual agreement between government and a registered company, for the harvest and extraction of timber from forested parcels of Crown land.
  • Government will begin offering tracts of Crown timber through a public tendering process to any registered business that qualifies and has an interest in harvesting these areas.
  • The Provincial Government is seeking candidates to bid on standing timber with the intent to harvest and utilize the fibre.
  • Applications will be assessed and ranked using a predetermined evaluation based on the following criteria:
    • Value of bid;
    • Commercial viability and value of manufacturing;
    • Applicants proximity to Timber Sale Agreement area;
    • Potential employment of the application;
    • Ability to meet regulatory compliance; and
    • Operational capacity.
  • Please visit www.faa.gov.nl.ca/forestry/permits/TSA.html for a list of Timber Sale Agreement’ currently available and for further information on how to submit a bid.

Five-year Commercial Cutting Permits

  • Commercial cutting permits are generally issued throughout the year and unless otherwise stated, expire on December 31.
  • As per Section 27 (4) of the Forestry Act, a commercial cutting permit may be valid for the period set out in it.
  • To that effect, a new five-year commercial cutting permit term has been designated for allocations of 5,000 cubic metres to 50,000 cubic metres.
  • Five-year permit terms are only available to existing operators who have demonstrated a history of harvesting their annual commercial cutting permits.
  • Five-year commercial cutting permits are designed to guarantee established operators access to longer-term fibre supply.
  • Permits will be allocated in Forest Management Districts that have adequate timber supply and resource access constructed.
  • A scan of all commercial permit holders harvesting 5,000 cubic metres to 50,000 cubic metres in the last two years has been undertaken.
  • Five-year commercial cutting permits are being offered to two operators. One is located in District 18 (Roddickton) with a volume of 15,000 cubic metres per year; the other candidate is in District 9 (Springdale) with a volume of 9,500 cubic metres per year.
  • Additional planning and development will be required to support further commercial permit holders in obtaining five-year permits in other areas. Planning and development will continue in 2018 with the goal of having additional areas ready for offer by March 31, 2019.
  • Letters of offer; including permits, conditions and area maps, are available for issuance to the selected candidates.

2018 08 30                              12:30 p.m.