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Forest licence allocation

People completing forms

Timber is allocated to large forest companies and small forestry businesses where there are sound business plans in place for timber use. The right to harvest is acquired by a licence pursuant to The Forest Resources Management Act. There are various types of licences available to encourage and maintain commercial and sustainable use of the forest.

What's happening

What's happening - Forest licence allocation

What we are doing

The Ministry of Environment uses different forms of licensing arrangements to secure economic benefits from the public forest resource. Sixty-one per cent of the province's commercial forest has long-term licensing arrangements with forest management agreements in place. Forest management agreements grant the licensee the right to harvest crown timber within a defined licence area for 20 years, with the possibility to extend the term every five years if all obligations are being met. This type of licence is the most comprehensive and requires a forest management plan to be in place for the timber supply area. This agreement provides long term security for the forest company.

Shorter-term area-based licences are granted through area-based term supply licences (TSLs) for some timber supply areas. Area-based TSLs are typically issued for five years, with the possibility of being reissued at the end of the term. This licence must have a trust fund into which forest management fees are paid, which is intended to cover the costs associated with subsequent forest management activities, such as reforestation. About 28 per cent of the commercial forest is licensed under area-based TSLs.

A volume-based term supply licence is another type of short-term licence and is one step above an annual commercial forest product permit (FPP). Volume-based TSLs are issued for two to five years. Both volume-based TSLs and FPPs can overlap timber supply areas that have FMA and area-based term supply licences. These two licences can be granted to small and large business forestry ventures.

The specific timber supply areas solely managed through volume-based TSLs and by commercial forest product permit holders (i.e. where there is no area based licence holder) covers 11 per cent of the commercial forest. These types of licences require the individual or small company to prepare an operating plan. The Island Forests comprised of the Canwood, Nisbet, Fort-a-la-Corne and Torch River Provincial Forests is an example of such an area.

Forest management agreement areas map and chart

Why it matters

Since forest management agreements provide the greatest assurance of sustainable forest management – requiring forest management plans, which are equivalent to environmental impact assessments, plus renewal obligations – the long-term goal is to have all timber supply areas covered by forest management agreements.

Whether it is for timber or non-timber products, aesthetics or wildlife, the boreal forest is valued by Indigenous peoples and a variety of stakeholders including hikers, hunters, outfitters, cabin owners and forestry companies. All licensed operations require engagement and Indigenous consultation for proposed forestry activities during the planning processes. Engagement and consultation occurs during the development of a 20-year forest management plan, which applies to the larger and longer term licences and the annual operating plan, which applies to all licensees. This provides an opportunity for all parties to give input and help guide the direction on how to balance environmental, economic and social benefits from the forest.

Forest licences outline the legislative requirements, codes and standards to be followed by the licensees in order that sustainable forest management is practiced.

The timber allocation process associated with the licence provides an opportunity for economic development for businesses of various sizes, allowing for diversity in product manufacturing across the province. Licences encourage co-operation between licensees to fully utilize timber allocations for the best value and product. Allocating timber through licences on Crown land is important to the sustainability of the timber supply while ensuring stability for northern communities that depend on forestry as an economic base.

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