Timber is allocated to large forest companies and small forestry businesses where there are sound business plans for forest utilization in place. The right to harvest is acquired by a licence pursuant to The Forest Resources Management Act. There are various types of licences available to government to ensure the commercial use of the forest is sustainable.
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 a term of 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, but it provides long term security for the company.
Shorter-term area-based licences are granted through area-based term supply licences (TSLs). Area-based TSLs are typically issued for a term of 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 in FMA and Area-based term supply licence areas. These two licences are granted and mainly geared toward small business forestry ventures.
The specific areas solely managed through volume-based TSLs or by 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 (the Canwood, Nisbet, Fort-a-la-Corne and Torch River Provincial Forests) is an exception where the government prepares overarching plans to ensure the Island Forests are managed sustainably for multiple forest values.
Why it matters
Since forest management agreements provide the greatest assurance of sustainable forest management – requiring forest management plans, which undergo environmental impact assessments, plus renewal obligations – the long-term goal is to move area-based term supply licences to 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, cabin owners and forestry companies. All licence types require engagement and consultation on proposed forestry activities during the planning process. This 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 interested parties to give input and help guide the direction on how to balance environmental, economic and social benefits.
Forest licences outline the legislative requirements, codes and standards to be followed by the licensees in order that sustainable forest management is practiced.
The licence allocation process 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.