The committee will be conducting public consultations and has been asked to deliver a report by Aug. 15 this year.

The committee’s terms of reference are to specifically consider recommendations that could increase timber supply, including direction on the potential scope of changes to land-use objectives, rate of harvest and conversion of volume-based tenures to area-based tenures. The committee will also consider whether any changes to legislation are required.

In making its recommendations, the committee will need to consider the Province’s commitment to balance the budget and maintain competitive electricity rates; the need to maintain high environmental standards and protect critical wildlife habitat; orderly transition for communities to lower harvest levels; maintain a competitive forest industry; First Nations’ titles and rights; and the softwood lumber agreement and other trade agreements.

The committee is expected to hold its first meeting this week to elect its chair, develop a work plan and a schedule for public consultations.

The members of the Special Committee on Timber Supply are:

•  John Rustad, MLA Nechako Lakes (convenor)
•  Donna Barnett, MLA Cariboo-Chilcotin
•  Eric Foster, MLA Vernon-Monashee
•  Ben Stewart, MLA Westside-Kelowna
•  Harry Bains, MLA Surrey-Newton
•  Norm Macdonald, MLA Columbia River-Revelstoke
•  Bill Routley, MLA Cowichan Valley

The committee will be supported by a technical advisory committee that will include former provincial chief foresters Larry Pedersen and Jim Snetsinger.

Source: Province of British Columbia

New committee formed in British Columbia to examine mid-term timber supply is a post from: ForestTalk.com

Kennedy would not specify who the company was, or where they were from, but he did say that the company is interested in acquiring part of the property to produce wood pellets for home heating.

The Grand Falls-Windsor mill has been closed for 3 years. The province assumed custody and management of the mill after expropriating the timber and water assets from AbitibiBowater.

This is not the first time a company has been interested in the mill. In 2010, Lott Paper from Germany was interested in the mill, but the plan fell apart when Lott Paper declared bankruptcy just days later.

The environmental cleanup of the site has yet to be carried out. The cleanup is estimated to cost more than $100 million. The Supreme Court of Canada will be deciding if the provincial government will be responsible for paying for the cleanup, or if AbitibiBowater will be on the hook for the costs.

Premier Kathy Dunderdale has said a future operator of the mill shouldn’t have to pay for the environmental cleanup. She told the legislature that “the business case, what we are trying to do is encourage another use for that facility in Grand Falls, something hopefully to do with the forestry industry. We are going to make that as attractive as we can based on a cost-benefit analysis to the people, particularly of the central part of the province. At the end of the day we are left with the responsibility, unless the Supreme Court of Canada rules something different, and the site will be cleaned up eventually.”

Source:
Company eyeing former mill site in Grand Falls-Windsor (CBC)

Company interested in producing wood pellets at the old Grand Falls-Windsor mill is a post from: ForestTalk.com

To refresh our memories, the Canadian Boreal Forest Agreement was signed 2 years ago.  21 forest companies, all members of the Forest Products Association of Canada, and 9 environmental organizations signed the agreement.  Through the agreement, the forest companies committed to the highest environmental standards of forest management and conservation, while environmental organizations commit to global recognition and support for the forest companies efforts.

Last year, in April 2011, the signatories of the agreement unveiled a Boreal Business Forum that would be a roundtable for the participants of the Canadian Boreal Forest Agreement, as well as leading corporations and investors that have a strong interest in conserving the boreal forest.

The leading corporations included Axel Springer, Batirente, The Globe and Mail, Hearst Corporation, Indigo Books & Music, Kimberly-Clark, Limited Brands, Lowes, Office Depot, RONA, SHARE, Staples, Time Inc. and VDZ.

Today, the Vice President of Finance for one of these leading corporations dropped ForestTalk an email to ask if the Boreal Business Forum was still active and if any upcoming meetings were scheduled.

Was the historic agreement nothing but a media show?  A feel good, publicity stunt?  Smoke and mirrors?

This week, 3 of the environmental groups who signed the agreement – Canopy, ForestEthics, and Greenpeace – released a joint status report to reveal the Canadian Boreal Forest Agreement has yet to deliver many results.  They indicate that the agreement was broken down into 75 milestones, each with a specific timeline attached.  58 of those milestones are unfilled, and only 10 were delivered on time.

Mark Hubert, vice president of environmental leadership at the Forest Products Association of Canada, said ”It’s a complex agreement but we’re making progress. Do we wish we were moving faster? Absolutely, but . . . there’s an extraordinary amount of work going on by both parties to make sure that we get to the finish line, so to speak.”

Janet Sumner, executive director of conservation group Canadian Parks and Wilderness Society, and a member of the Canadian Boreal Forest Agreement steering committee, said she doesn’t share the assessment of Canopy, ForestEthics, and Greenpeace.  “We’re at the penultimate moment in planning in several regions of the country.” Sumner said they are just weeks away from producing agreements that will protect forests and caribou lands in Quebec’s Lac St-Jean region and northwestern Ontario. Those agreements would then be passed to first nations groups and governments for their input.

So what do you think?
Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Read more including media coverage of the status of the Canadian Boreal Forest Agreement:
Environmental groups decry slow pace of boreal forest protection (The Globe and Mail)
Forest industry says boreal protection goals still on radar (Edmonton Journal)
Environmental groups split over slow pace of forest deal (Canadian Business)
Boreal forest agreement bogged down, environmentalists say (The Star)
Status report reveals lack of results on 2nd anniversary of world’s largest conservation initiative (Canopy & ForestEthics & Greenpeace)

The Canadian Boreal Forest Agreement … what was that again? is a post from: ForestTalk.com

On Monday, the CEP held a pair of emergency union meetings in Corner Brook to discuss the alleged discovery that the negotiated proposal to grant the company a 5 year extension to make up for a deficit in pension plans would change the benefit formula.

Bruce Randell, president of CEP Local 242, said the reduction in pensions of current employees could be as much as 25% in 2014.

The deadline to approve the funding relief measures is Thursday.

The letter, signed by Daniel Archambault, chief operating officer of the Industrial Products Division of Kruger Inc., said “the company never had any intention to renege on its 2005 commitment and it is appalling to hear such declarations after we have helped the mill survive the recent recession and worked relentlessly with the unions to find solutions to secure the Corner Brook operation for the long term.”

Read more from The Western Star: Kruger says it was falsely accused by unions

Kruger denies hiding information about its pension formula is a post from: ForestTalk.com

EACOM Timber is reporting a net income attributable to shareholders of $6.3 million in the first quarter.

During the quarter, the company shipped 128 million board feet of lumber (159 million board feet in the previous quarter and 170 million board feet in the corresponding quarter of 2011) and 120,000 oven-dried metric tons of by-products (129,000 oven-dried metric tons in the previous quarter and 161,000 oven-dried metric tons in the corresponding quarter of 2011).

In the first quarter of 2012, shipments were impacted as the Timmins operations have been interrupted since January 22, 2012 as a result of the fire at the mill site. The first quarter of 2012 results include a gain of $14,283,000 on disposal of property, plant and equipment destroyed by fire.

Pricing has improved in the first quarter of 2012 with benchmark lumber prices averaging US$329/Mfbm for studs and US$360/Mfbm for random lengths delivered Great Lakes, up 8% and 10% from US$304/Mfbm and US$326/Mfbm respectively in the fourth quarter of 2011. Mill realizations were, however, somewhat impacted by a strengthening Canadian dollar with the exchange rate averaging 1.001 in the first quarter of 2012, up 2% against an average of 0.977 in the previous quarter. Pricing for random lengths still remains 6% below the level achieved in the first quarter of 2011, whereas studs are trading at a similar level.

Lumber production for the quarter ended March 31, 2012 was 113 million board feet of lumber, against 111 million board feet in the previous quarter and 166 million board feet in the corresponding quarter of 2011. During the three-month period, the Company operated at 46% of its capacity with two of the eight mills acquired from Domtar idled, Ear Falls in Ontario and Ste-Marie in Quebec (45% during the previous quarter and 65% in the corresponding quarter of 2011 with no change to idled mills). Compared to the previous quarter, the lost capacity at Timmins has been partially mitigated by higher production levels at other mills while production in the fourth quarter was negatively impacted by the six-week closure at Gogama due to a fire at the mill site. Compared to the first quarter of 2011, operations in Val-d’Or and Matagami have been temporarily shut down in the second half of 2011 and the Timmins mill closed on January 22, 2012. These closures have been somewhat offset by the additional production at Elk Lake following the acquisition of the remaining one-third interest in the mill in the third quarter of 2011.

Unit costs improved compared to those experienced in previous quarters as a result of the higher cost mills taking market-related downtime. The positive impact of lower unit costs was, however, offset by the fixed costs incurred in respect of those mills that are either idled or shut down.

Read EACOM Timber’s full release

EACOM Timber reports net loss of $7.8 million in first quarter, 2012 is a post from: ForestTalk.com

12 homes were evacuated yesterday when the wind direction changed for the Bonneyville fire. Bonnyville declared a local state of emergency on Tuesday, which allows officials to call in the RCMP to secure roads and homes, if necessary. The Bonneyville fire grew to about 800 ha yesterday.

The fire near Grassland is still out of control and measures about 1,000 ha.

The fire near Lodgepole is currently being held.

Alberta has issued a fire ban for most of the forested areas of the province.

Yesterday marked the 1 year anniversary of the devastating wildfire that destroyed nearly one third of Slave Lake.

Manitoba

Fires in southeastern Manitoba are continuing to grow under fierce wind conditions.

British Columbia sent 41 firefighting personnel to Manitoba yesterday to help Manitoba’s crews. two water bombers have arrived from Quebec. Two other water bombers have arrived from Minnesota.

Because of an increase in the number of fires and fire activity, the Province of Manitoba is requesting additional resources through the Canadian Interagency Fire Fighting Centre. The centre allows for the mutual sharing of resources between B.C. and other jurisdictions.

Campfires have been banned in all provincial parks in Manitoba’s southeast. Back country travel is restricted to permit holders only.

Ontario

Many new fires have started across northern Ontario this week.

“So far this season, we’ve had very dry conditions and today we’ve had almost double the fires we had last year at this time,” says Lindsay Marks, Ontario Ministry of Natural Resources northeast fire information officer. “We had an earlier spring this year. The snow melted so fast and it ran off rather than infiltrated into the ground. So the ground was that much drier. And we’re experienced little precipitation.”

The Northeast Fire Region is now a restricted fire zone due to extreme fire hazard.

Nova Scotia

In Nova Scotia a brush fire near Stewiacke led to one evacuated house, and a couple more on standby yesterday.  Two helicopters attacked the fire from the air while crews made progress from the ground.  60 volunteer firefighters helped contain the fire.  There is no word yet on the cause of the fire.

Sources:
Alberta wildfire prompts evacuation of 12 homes (CBC)
B.C. crews to assist Manitoba’s firefighting efforts (Government of British Columbia)
Home evacuated in Colchester County brush fire (CBC)
Fire crews watch for flare-ups near Stewiacke (CBC)
Situation Report – May 15, 2012 (CIFFC)
Forest fire threatens homes near Bonnyville (Calgary Herald)
Fire Update May 15, 2012 (Government of Manitoba)
Short winter might translate into long forest fire season — official (The Sault Star)
Fire fight gets backup help (Winnipeg Free Press)

Forest fires continue to grow across the country is a post from: ForestTalk.com

Catalyst Paper has amended its proposed Plan of Arrangement under the Companies’ Creditors Arrangement Act. The Plan as so amended will be considered by Catalyst Paper’s secured and unsecured creditors at the meetings scheduled for May 23, 2012.

“We’re pleased that over the past weeks, the various stakeholders, advisors and the company have worked diligently to craft an agreement that sizably reduces the company’s debt level,” said Kevin J. Clarke, President and Chief Executive Officer. “This agreement, with the support of creditors at the meetings on May 23, 2012, will enable Catalyst to emerge from creditor protection with improved liquidity and the capacity to return and sustain normal trade terms for the foreseeable period.”

The court-appointed monitor is recommending that creditors vote in favour of the Amended Plan at the Meetings. Catalyst Paper’s Board of Directors is unanimously recommending that all holders of First Lien Notes, Unsecured Notes and General Unsecured Claims vote in favour of the Amended Plan at the Meetings.

The principal changes to the Plan include:

• A reduction of US$120 million in the amount of notes to be issued under the Amended Plan so that the total debt reduction under the Amended Plan will be US$435 million (rather than the US$315 million reduction under the Plan);
• the reduction of the principal amount of New First Lien Notes to be issued under the Plan from US$325 million to US$250 million; and
• the elimination of the New First Lien Coupon Notes to be issued under the Plan (approximately US$45 million);
• the distribution of 50% of the net proceeds (PREI Proceeds Pool) from the sale of Catalyst Paper’s interest in Powell River Energy Inc. and Powell River Energy Limited Partnership (PREI Interest) to Unsecured Creditors who do not receive a Convenience Cash Amount or elect to receive equity;
• 100% of the New Common Shares to be issued to holders of the First Lien Notes subject to the ability for Unsecured Creditors to elect (Equity Election) to acquire up to 600,000 New Common Shares (4%) rather than receive cash from the PREI Proceeds Pool or the Maximum Convenience Claims Pool; and
• the elimination of the issuance of the Warrants under the Plan.

There were no changes to the provisions of the Plan relating to the payment of Convenience Cash Amounts.

The Amended Plan

Specifically, the Amended Plan treats each of the creditor classes as follows:

11% Senior Secured Notes due 2016 (First Lien Notes)

• Pursuant to the Amended Plan, Catalyst Paper’s US$390.4 million aggregate principal amount of outstanding First Lien Notes will be exchanged for:
• US$250 million aggregate principal amount of 11% first lien notes due November 1, 2017 (New First Lien Notes) allocated as to US$182 million on account of the Class A Notes and US$68 million on account of the Class B Notes; and
• 14.4 million New Common Shares of Catalyst Paper (being 100% of the outstanding common shares of Catalyst Paper subject to dilution from the issuance of common shares to Unsecured Creditors who make the Equity Election described below and under any Management Incentive Plan), 10,502,352 New Common Shares on account of the Class A Notes and 3,897,648 New Common Shares on account of the Class B Notes.

Prior to this amendment, the Plan provided that the outstanding First Lien Notes would be exchanged for (a) US$325 million aggregate principal amount of New First Lien Notes (b) 80% of Catalyst Paper’s New Common Shares and (c) New First Lien Coupon Notes in a principal amount equal to accrued and unpaid interest on the New First Lien Notes as of the Effective Date.

7 3/8% Senior Notes Due 2014 (Unsecured Notes)

• Pursuant to the Amended Plan, Catalyst Paper’s US$250 million aggregate principal amount of outstanding Unsecured Notes will be exchanged as follows:
• unless the holder of Unsecured Notes has made an Equity Election, such holder will receive its pro rata share (calculated by reference to the aggregate amount of all claims of Unsecured Creditors allowed under the Plan) of the PREI Proceeds Pool; and
• each holder of Unsecured Notes may elect (the Equity Election) to receive its pro rata share (calculated by reference to the aggregate amount of all claims of Unsecured Creditors allowed under the Plan) of 600,000 New Common Shares of Catalyst Paper rather than participate in the PREI Proceeds Pool. An Equity Election Form and information on how to make such election will be provided to Unsecured Creditors following the Sanction Order.

General Unsecured Claims

• Pursuant to the Amended Plan, in exchange for all General Unsecured Claims, each holder of an allowed General Unsecured Claim shall receive:
• Unless the holder of such General Unsecured Claim has made an Equity Election or a Cash Election or is a Convenience Creditor, such holder will receive its pro rata share (calculated by reference to the aggregate amount of all claims of Unsecured Creditors allowed under the Plan) of the PREI Proceeds Pool;
• Each holder of an allowed General Unsecured Claim who has not made a Cash Election may elect by way of the Equity Election to receive its pro rata share (calculated by reference to the aggregate amount of all claims of Unsecured Creditors allowed under the Plan) of 600,000 New Common Shares of Catalyst Paper rather than receive such holder’s pro rata share of the PREI Proceeds Pool or Convenience Cash Amount. Holders of General Unsecured Claims who have filed a Cash Election under the prior Plan and who wish to file an Equity Election under the Amended Plan must revoke their prior Cash Election prior to the date of the meetings. See “Revoking a Cash Election” below; and
• Each holder of a General Unsecured Claim equal to or less than C$10,000 (unless such holder makes an Equity Election) and holders of General Unsecured Claims in an amount over C$10,000 who validly file a Cash Election (pursuant to which the allowed amount of such holder’s General Unsecured Claim will be reduced to C$10,000), will receive cash in an amount equal to 50% of such holder’s allowed General Unsecured Claim, provided that the aggregate amount of cash payable to all such holders shall not exceed C$2.5 million.

Prior to this amendment, the Plan provided that the outstanding Unsecured Notes and General Unsecured Claims would be exchanged for (a) 20% of Catalyst Paper’s New Common Shares (b) Warrants exercisable, on a cashless basis, to acquire up to 15% of the fully diluted New Common Shares of Catalyst Paper for up to four years from the effective date of the Plan and (c) in respect of holders of General Unsecured Claims in an amount equal to or less than C$10,000 (or who agreed to reduce their claim to such amount), cash in an amount equal to up to 50 percent of such holder’s General Unsecured Claims (unless they elected to receive the New Common Shares and Warrants referred to above), provided that the aggregate amount of cash payable to such holders would not exceed C$2.5 million.

PREI Proceeds Pool

Under the Amended Plan, Catalyst has agreed to use commercially reasonable efforts to sell all of its right, title and interest in Powell River Energy Inc. and the Powell River Energy Limited Partnership (PRELP) comprising 50,001 common shares in Powell River Energy Inc., long term subordinated debt of $20.8 million owed by Powell River Energy Inc. to Catalyst Paper Energy Holdings Inc. and a 49.95% limited partnership interest in PRELP. The PREI Proceeds Pool shall consist of an amount equal to 50% of the net proceeds received by Catalyst on account of the sale of the PREI Interest. The sale shall be conducted pursuant to an amended sale and investor solicitation process, which would likely not include a stalking horse bid, to be established and approved by the Supreme Court of British Columbia (Court) following obtainment of the Sanction Order for the Plan and is subject to the terms of a contractual right of first refusal in favour of Catalyst’s joint venture partner.

Power River Energy Inc. owns two hydroelectric dams near the Powell River mill, with a combined generating capacity of 83 megawatts. Pursuant to a power purchase agreement between Catalyst Paper and Power River Energy Inc., Power River Energy Inc. provides the power generated by its facilities to Catalyst Paper at a fixed rate approximating current British Columbia Hydro and Power Authority rates. Power River Energy Inc.’s hydroelectric facilities supply approximately 40% of the annual power needs of the Powell River mill, although this amount varies depending on hydrological conditions. The power purchase agreement will continue following the sale.

New First Lien Notes

• There are no material changes to the terms of the New Notes under the Amended Plan other than as described above and other than:
• the Priority Lien Debt Cap will be reduced from US$400 million to US$325 million;
• the definition of Threshold PIK Notes will be revised to refer to New Notes outstanding, if any, in excess of US$250 million (as opposed to US$325 million), excluding any New Notes issued after the issue date (other than any PIK notes); and
• the maturity date of the New Notes will be November 1, 2017 rather than October 30, 2017.

Required Approvals

Implementation of the Amended Plan will be subject to the requisite approval by Catalyst Paper’s secured and unsecured creditors at the Meetings to be held on May 23, 2012, the approval of the Court and, to the extent applicable, the approval of the United States Bankruptcy Court for the District of Delaware. In the event the Amended Plan is not approved at the Meetings, Catalyst Paper will commence a sale transaction in accordance with certain agreed and Court-approved sale and investor solicitation procedures.

Read full release from Catalyst Paper

Catalyst Paper’s amendments to Plan of Arrangement is a post from: ForestTalk.com

The workers are drawing attention to the number of contractors Kruger is employing after laying off several dozen unionized workers.

While the main gate was the site of the demonstration, some workers also gathered at the east gate that is most often used by contractors. The workers didn’t disrupt the traffic flow.

The demonstration, which started at 6:30am was over before the end of the shift change at 8am.

Source:
Mill workers protest use of contractors

Protest at shift change in Corner Brook this morning is a post from: ForestTalk.com

Should lumber prices continue to rise or remain firm in the next few weeks, that lower tax level will be maintained or could drop even further.

North American dimension lumber prices have been firming steadily in the past several weeks, according to trade journal Madison’s Lumber Reporter. Benchmark WSPF KD 2×4 #2&Btr reached US$304 per thousand board feet last week, a 28.3% increase over one year ago when the price was US$218, and a 9.6% increase over one month ago when that price was US$275 mfbm.

The softwood lumber export tax was reduced only one other time since the signing of the SLA in mid-summer 2006. In June 2010, the US$355 per thousand board feet trigger was achieved and the tax became zero. Canadian lumber producers, particularly in British Columbia, shipped so much wood to the US in that time frame, to take advantage of the reduced rate, that lumber prices immediately crashed and by August the tax was back to full. Where it has stayed every since.

Steady demand from the US and continued restricted lumber production together with tight inventories are responsible for the price uptick. The latest figures out of the US Census Bureau and the USDA Foreign Agriculture Service (FAS) indicate growing imports of Canadian forest products by the US for the first three months of this year compared to previous years.

The value of Canadian forest products imported into the US for January to March 2012 rose to US$1.33 billion, according to the USDA FAS. That compares to US$1.26 billion and US$1.29 billion for the same period in 2011 and 2012 respectively, and to US$1.02 billion for 2009.

The quantity of softwood lumber imported by the US from Canada for January to March 2012 reached 1.83 billion board feet, according to the US Census Bureau. This compared to 1.74 billion and 1.81 billion for those months in 2011 and 2010 respectively. In 2009 the US imported only 1.75 billion board feet of softwood lumber from Canada.

Source: Madison’s Lumber Reporter

Softwood lumber export tax to be reduced on June 1 is a post from: ForestTalk.com

In both investigations, the ignition sources appear to have been located at the conveyor level, where electrical and/or mechanical equipment was in operation in areas contained by walls and equipment. These areas are at the basement or lower level of both of the mills under investigation.

Under the directive order that was issued to all sawmill employers on April 26, 2012, WorkSafeBC’s officers have been ensuring that sawmill employers are in compliance as outlined in that order.

The order and the compliance of industry to date is posted on WorkSafeBC’s website along with other information related to sawmill inspections and the investigations.

In their initial visits officers are conducting walk-through inspections of all sawmills and all associated site facilities.

In their follow-up inspections, officers will be assessing the hazard identification and risk assessments that employers must have; they will be reviewing the compliance plans that have been developed along with any interim measures to address immediate safety concerns.

Officers will be paying particular, but not exclusive, attention to areas similar to those identified in the Babine Forest Products and Lakeland Mills investigations.

Five elements are required for an explosion: fuel, ignition, dispersion, oxygen, and containment.

Source: WorkSafeBC

Investigators find similarities between Burns Lake and Prince George sawmill explosions is a post from: ForestTalk.com