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- This week: week:

Tenure has one primary purpose:
to spur investment by offering
forest companies a guaranteed
wood supply. In other words, the

- forest company uses a guaranteed

supply of raw materials as security
to borrow the money they need to
set up shop. With this money, they
build or upgrade an existing mill
and buy the various pieces of
sundry equipment they need from
time to time in order to manufac-
ture lumber or pulp. For the forest

' industry, tenure is simple. Tenure

is the economic catalyst that keeps
their industry humming along.

Few members of the public really

understand the term tenure, how-
ever. Most people recognize it as
something big and powerful but at
the same time see it as something
shrouded in mystery. For most
people, tenure is something for
politicians, bureaucrats, Company
executives and financial wizards to
dabble in; not something for the
common man to ponder.

Tenure is complex. There are
several different types; each with

‘its own set of rules. Is this really

necessary?
Tenure is confusing. Not every-

he mystery
of tenure

one qualifies for a particular type
of tenure. On the surface, it almost
appears to be selective by com-
pany status. Is this really true?

Tenure is mysterious. No other
industry in the western world
needs a guaranteed, supply of raw
materials in order to operate. Why
the forest industry? Money lenders
don’t ask Alcan, for example, to
put up a bauxite mine as security
for a loan. Alcan’s security, as is
common in our economic world, is
a quality product and an estab-
lished market.

It’s the same for a local retailer.
His security is the product be has

to sell and the potential market he
has to sell it to. A furniture store
doesn’t need to own the factory.
The owner buys and sells on the
open market.

For some reason, though, when
the forest industry was establishing
itself in our province, it was decid-
ed that in order for the forest in-
dustry to operate they had to own
the resource they wished to use in
the manufacture of their product.
This was a problem, though — the

Tesource was sitting on public land

and a way had to be devised to

Letter to the Editor
Sad reflections on rail travel

Open letter to:

VIA RAIL CANADA INC.
P.O. Box $116

Station A

Montreal, Quebec

H3C 3N3

All my life I’ve been a great rail
fan. I think train travel is the best
mode of transportation and am
very sad at the current cut-backs in
Canada.

Having said this, 1 must tell you
about a recent trip | had that may
put some humour in your life
today, as it was really a joke.

I boarded the "Skeena’ train at
Burns Lake, B.C. At least I think it
was Burns Lake. The station was
boarded up, glass was strewn all
over the platform with a few wine
bottles still intact, and the area was

totally in darkness. At 4:09 in the »

morning a morgue would be live-
lier. The conductor later said he

- was embarrassed to let passengers

off there.

‘Anyway, the train did stop and
pick me up, but the conductor said
he could not sell me a ticket to my
destination, Terrace, but only to
Smithers, which was where his
territory ended. The fare from
Burns Lake to Terrace is $25, but
buying a ticket to Smithers and
then another to Terrace would cost
me $6 more. After about an hour
of contemplating what to do, he
suggested I just wait and buy a
ticket in Smithers from the atten-
dant there. On arrival in Smithers,
the lady in the waiting room said
she didn’t work for VIA but rather
for CN, and the station didn’t sell

tickets anyway. I would have to
buy my ticket from the new con-
ductor.

Well, I finally did buy my ticket,
not from the conductor, but from
the baggage man, who seemed to
be in charge of this important

matier. The previous conductor
obviously didn’t know this. 1
always thought the conductor was
the chief of the train, but I guess
times have changed.

It was very nice to see better
equipment on the ’Skeena’ includ-
ing a dome car, but why were all
the seats facing backwards? |
suppose someone forgot to turn the
car around, but later I discovered
this happens quite regularly, even
though I understand there are
facilities in Prince Rupert and
Jasper to do this. I guess VIA feels
it’s more fun to see where you've
been rather than where you're
going. The railway has been going
backwards for the last few years
anyway. .

I wonder why no one cleans the
windows? Oh well, what can you
do. At least this train is still oper-
ating, for now.

In the dining car, where by the
way, the staff were very pleasant
and the food surprisingly good,
conversation got around to why
VIA didn't promote the *Skeena’
train service in towns and cities:
along the route as it certainly is a
pleasant way to travel. Is there a
marketing and promotion team in
the VIA management? Most
people in the area don’t know the
train is still running, but I guess

. Terrace Review — Wednesday, August 8, 1990 A7

by Tod Strachan, in consultation with Rod Amold and Doug Davies

rent or offer ownership of that
resource. The end. result was a
form of lease called- tenure.

It must have made sense at the
time but in retrospect the arrange-
ment seems a little strange. How
can you use something you don’t
own as security? How can you
offer as security something you

tenure, along with what might be
one of it’s biggest flaws. Basically,
we (the government) rent our trees
to a forest company, which cuts
them down and turns them into a
product worth moncy. The trees, in
most cases, are supposed to be
replaced, and from this we get the
idea of “Forests Forever". Once

lease or rent, and have your banker
believe he will own it if you don’t
pay off your loan? Isn’t this a little
like leasing a truck and then using
it as collateral to borrow the
money you need to buy your own?
Ask your banker if this option for
personal development is available
to you.

In the past couple of weeks
we've introduced the idea of

PE ill a”

the easiest way to get rid of the
service is to not tell anyone about
it.

One rumour I heard perked me
up, though, and that was about
Amtrak bidding for the rights to
operate a train from Seattle to
Prince Rupert via Vancouver and
the tracks of B.C. Rail to Prince
George. What a marvelous idea to
connect mainland U.S.A. to Alaska
by rail and the Alaska Marine
Ferry system. ,

Isn’t it strange to you that the
*Skeena’ only goes from Prince
Rupert to Jasper? Anyone going in
this ‘direction wants to at least go
as far as Edmonton. To complete
the journey to Edmonton you must
wait eight hours in Jasper until the
’Canadian’ transcontinental comes
by. Going west, it’s a little better.
Only a six-hour wait. 1 guess the
businesses of Jasper are happy.
What else can you do for eight
hours in Jasper? You would think
the timetable planners could have
done a little better job. Maybe they
own a restaurant across from the
VIA station in Jasper. What other
explanation is there?

All over the world, railways are
exploring and making train travel
an important part of their transpor-
tation system, including Australia.

When are we going to wake up? .

Maybe our politicians should ride

‘backwards to work in the dome

car. It's the only way they seem to
look.

Robert Q. Smith

. A great rail fan

‘Terrace.

this new crop grows up we can
rent them again to the same or a
different company, and so the
process goes.

The basic problem we pointed
out last week, however, is that
we’re renting the trees and not the
land. We have no way of knowing
if the first tenant is harming the

land in such a way as to render it
useless, We have no guarantee that

the ‘next°crop of trees will even

grow.

Over the next two weeks we're
going to take a cursory look at the
basic forms of forest tenure, and in
subsequent weeks look at each in
greater detail.

To begin with, there are seven
basic forms of tenure, only four of
which really offer any kind of long
term security. The four are the
Tree Farm Licence (TPL), the
Forest Licence (FL), the Timber
Licence (TL), and Crown Grants.
The. other three, which take a
slightly different form, are the Pulp
Harvesting Area (PHA), the Tim-
ber Sale Licence (ISL), and the
Wood Lot Licence. Today, we'll
look at the Tree Farm Licence and
the Forest Licence.

The Tree Farm Licence, one of
the biggest forms of tenure, is land
based, In other words, it has
defined boundaries. The term of
this form of tenure is 21 years, and
it can be renewed every five years.
This means that the forest com-
pany holding a TFL never has less
than a 16 year supply of timber.

The licensee is responsible for

John Pifer —

Continued from page AG

Parting Thought: ‘Highlight’ of
the week at the Parliament Build-
ings was the visit of a New York
TV crew from the slick’n’sensa-
tionalizing ‘tabloid news’ pro-:
gram A Current Affair. And
yes, they were here to do the
Bud Smith and Margot Sinclair
saga. Can you imagine the kind
of ’topspin’ they will put on that
one?! I’m told the segment will
alr within the next (wo weeks.

basic silviculture. He must take
care of the seedlings he plants until
they are considered to be free
growing. Free growing is the point
where a tree is considered to have:
matured sufficiently to survive
competition from other species of
plants or trees.

The owner of a TFL isn’t given
a wholesale licence to cut every-
thing in sight. He is restricted to
some degree by an Annual Allow-
able Cut (AAC), calculated on the
total volume of timber available
within the TFL. This AAC deter-
mines exactly how many trees the
licensee can cut each year, and,
according to theory, means that by
the time he reaches the opposite
end of his TFL the point where he
began will be ready to harvest
again.

For rent, the holder of a TFL
pays 45 cents per cubic metre
based on the AAC, not the total
volume of timber in the licence
‘area, -In- addition. to: this, the licen-
see pays 15 cents per cubic metre
when he signs his first contract.
This amounts to a performance
bond which insures silviculture
work will be done and full stum-
page fees will be paid.

A Forest Licence differs from a
TFL in the length of contract, cost,
and the fact that it is volume-based
rather than land-based. A Forest
Licence offers a 15 year term,
renewable every five years, and the
rent is set at 25 cents per cubic
meter based on the AAC. There is
a first-time 15 cents per cubic
metre fee for the performance
bond.

Under this form of tenure, the
licensee is assured a specific
volume of timber in a Timber
Supply Area (TSA) but ail the
timber won't necessarily be in the
same geographical location. Over
the entire TSA, however, he is
offered a guaranteed AAC.

The licensee surveys the TSA,
finds an area of timber he wants tO
cut, and asks the Ministry of
Forests’ permission to do so. As
long as the licensee is below his
AAC, however, there is an obliga-
tion on the part of the Ministry to
grant permission.

Forest Licences sometimes cause
a little disagreement between com-
peting forest companies. On occa-
sion, more than one company
expresses a desire to cut the same
stand of timber. When this happens
the Ministry has a “hands off"
policy. It’s up to the forest com-
panies involved to come to a
mutual agreement on ‘their own.

Next week, we'll look at the

Temaining five forms of . forest

tenure before examining the pros
and cons of each in gteater detail.