. by Sitsphanie Wiobe This week: oday, we begin our dis- nucs. ; Most often all we hear about are Stumipage rates, or fees, and we are _ therefore led to believe that this is - the only source of revenue. And from these stumpage fees, the government must pay all the costs of management, reforestation, building roads, and whatever else they do in our forests. This, however, is far from the truth. There are numerous sources of revenue generated by our forests. Among them are things like corporate and property taxes, wages earned and the resultant taxes levied on those dollars for the privilege of earning and spend- ' ing them, and the 15 percent levy we imposed on ourselves to get rid of the 15 percent U.S. import tariff on our softwood lumber products. All kinds of dollars. filter. down from our foresis from a number of The editor of this newspaper phoned me the other day, wondering which version of our computer program I use to write . this column. It seems he was having problems running my columns through his computer "Spell-check" program. He’ll never know how much he upset me. J bristle at the idea of having my spelling questioned. I. HATE it. It.brings me right back into Grade 4, where I was the greatest speller in the world until I was knocked off my pedestal and put back down with: the’ . commion folk. At that point, I was a bit of a geeky child, a little too skinny with these huge lips-and thick glasses. I didn’t have blond curis. like Rachel did, I couldn’t run fast like Tammy could, but boy, | ’ Tsure could spell. The way "t-j-o-n” sounded like "shun" ‘made perfect sense to me. I always, knew when "ch" meant - "ssh", or when it meant "k" — sounds, While other kids might stumble:over Grade 4 words like "embarrassment", I had no trouble with the sixth. grade spelling list — yep, even the hard "stuff, like “indubitably", Ah, the world is just so good when you're on top. — ‘Then came my downfall. Some sadistically competitive teacher | cussion on forest reve-. What are the’: “sources of forest-related- dollars?. And ultimately, where do they go? Welcome to the appraisal system different sources, but few are ever considered as direct revenue, and far fewer are ever re-invested in the future of the resource, But we'll get back to on those topics in coming weeks. First,. _ we're going to give you an over-- view of. Our current appraisal BY8- . tém. ‘Even though this revenve _Source in only a small part of the ‘bigger picture, it is important to understand how this system works: and how it affects the forest in- dustry. p until Sept. 30, 1987, the Minisiry of Forests used an appraisal method called the Rothery System. Basically, this system determined Stumpage rates by dividing the selling price of an end product by the sum of a built in "profit and risk" factor, and then subtracting the estimated total costs of har- vesting, transporting and milling the timber. As is the case with any bureau- cratically. imposed system, the decided to hold an old-fashioned school spelling-bee, and I was chosen to represent my fourth grade class. Was I nervous? No. Confident? Yes. Cocky? You're "darned right I was cocky. And . why shouldn’t I be? I could even spell "supercalifragilisticexpiali- ” docigus", the word of the year . from Disney’s “Mary Poppins". We lined up in the gym, the spelling elite, cheered on by the pride of our classmates, As they called out the words to those _ Nervous kids before. me, I scoffed * at their simple mistakes. "Mississippi" - hah!-I could spell . that one blindfolded. "Forgotten". How, could anyone mess that one up? Even the seventh graders ‘were quickly dwindling in number. They were dropping like bugs in formaldehyde. I was in my glory. Those kids never had a chance — they were dealing with a nine-year-old pro. When my turn came, the principal called out a simple word, and I spelled it easily, Like a finely-tuned athlete, I whizzed through the first few rounds of that spelling bee without the slightest effort. 1 had visions of national awards, ribbons and trophies. Newspaper headlines would scream "WHIZ KID OUTSPELLS WEBSTER’S _ DICTIONARY". Crowds would fall at my feet, begging me to spell for them. Suddenly, the tension grew thick. We were into the final rounds of spelling, with only a few spellers left standing. The “words were geiting tougher: "committee", "autonomy" and "thinoceros", My classmates were _-behind me, we knew we had this by Tod Strachan, ih consultation with Rod Arnold. and a Doug Davies Rothery System had it’s fair share of opponents, and over the years, politicians came and: went with betier ideas of how the system should work. But it wasn’t ‘until Oct. 1, 1987, that Minister of Forests Dave Parker actually put a hew system into effect. This sys- tem .was called "Comparative - - Value Timber Pricing"; and is still in effect today. Comparative Value Timber Pric- ing defies a straightforward ex- planation. It.is based on a series of estimates, predictions, . averages and statistical facts, But we’re going to try to explain it anyway because its effect on our forests is profound and far-reaching. Our source of information is the Minis- try of Forests’ "Stumpage appraisal one in our hand. It was s my turn again, ‘and the principal looked me in the eye.and said, "Spell "tongue’." Tongue: a simple - _ word, one that I’ll never forget how'to spell, but at that moment in 1965, 1 really didn’t know. My gift had: neyer failed me before, | so ] quickly answered: *T-0-u-n- g =f, " oot The entire. fourth grade groaned in disappointed unison. In one ego-bruising instant I had fallen from international spelling fame _ and worldwide adoration, to just another fourth grade toser. I wanted to shrink into.a dark- comer of the gym and die in the dust, To make matters worse, the next word that won: the contest for my opponent wag "audible", 2 word I could: spelt si since birth. After. ihat day, Iwas not the same person, All: through grade ’ five and six, I'doubted-myself, . . consulted. the dictionary ona. _ regular basis, and was never so cocky again, Years later, J _ emigrated from the U.S. into Canada, where so Many words . " are spelled differently: cheque, centre, cofour...J could never be sure about anything, I became confused about the spelling of words I’d never thought about ‘before — even spelling my own - last name, I'd hesitate. It’s been a speller’s nightmare ever since. And now | find out my editor is checking my spelling with a computer program — will it never end? Except, in this particular column, there’s one word that no computer program — will include: supercalifragilistic- expialidocious. Sorry, you'll just have to take my word for it. information paper No. 1° entitied "Comparative Value Timber Pric- ing". An important note: We don’t expect anyone to remember all the material presented here, only gain an insight into what the Compara- ‘tive Value system is all about. ccording to information A paper No. 1: "Compara- tive Value pricing is a means of charging specific prices according to the relative value of each stand of timber being sold. Comparative Value prices are established so that the average rate _ Charged will approximate a target ‘rate per cubic metre." Remember the term "target rate". These two little words have great Significance if you happen to be a a logger. More on this next week. In general, however, target rates were set on Oct. 1, 1987, at $10.59 per cubic metre on the coast and $8.59 per cubic meter in the interior. According to paper No. 1, "Those target rates were set in consideration of a number of Pro- _ vincial objectives, the most notable - being the Government's desire to eliminate the federal tax on soft- wood lumber exported to the United States." Stumpage fees under the Com- parative Value system are calcu- lated for timber harvested under Tree Farm Licences, Forest Licences, Woodlot Licences, Licences-to-Cut and Timber Sale ‘Licences. Timber sold under the ‘tenure of a Timber Licence is a little different. This timber is charged out at a "royalty" which “averages $5.40 per cubic metre, roughly half the average stumpage rated levied on other forms of tenure, About eight percent of all har- vested Crown land falls under the category of Timber Licences but this figure varies slightly from year to year, -For the other 92 percent of our forested Crown land, stumpage Tales are determined by the follow- ing formula: IR = BR4(MVL- vw. Or, the Indicated Rate equals the. = Base Rate plus the difference . between the Mean Value Index and ” the Value Index. All terms are expressed in dollars per cubic metre - Obviously we’ve wandered into a bit of a swamp here, so in the name of clarity we offer the fol- lowing definitions: Value Index (VI): The Value Index is the relative value of each stand of timber in the province and is the key i in determining the stum- page rate for a particular stand of | rr timber. Basically, the Value Index - is determined ‘by making an esti- - mate o£ the total selling price (SP), _ of the ‘products. which can be se manufactured. from the stand of’, timber, and then subtracting the © .~- various operating costs (OC) of -~ producing them. Thus the formula: *. VI = SP-OC. . The selling price (SP) is a pro- fated estimate.. That: is, it is an estimate of the ‘average selling price in. dollars per cubic metre over. a predetermined period of time (three months) in the future. The basis for determining the selling ‘price of each species of .timber is based on market. value schedules prepared by the minis- _try’s Valuation Branch quarterly. On the coast, these.. log ‘market - values are based on species” and © grade of timber, and in the interior they are based on lumber and by-product chip market values: . Operating costs are also pro-rated estimates and include such costs as -— harvesting, transporting and milling the timber, reforestation and road construction. These costs are esti- mated "according to schedules and formulae contained in the relevant Appraisal _ Manual" which are revised by the ministry "periodi- cally". Base Rate (BR): The Base Rate is the "market-sensitive" factor in the formula, There are two base — Continued on page As — Letter to the Editor — Thanks to all. from the Heritage Park crew - To the Editor; The Terrace Regional. Museum Society board of directors would like to thank all the volunteers. and townspeople who donated their time, artifacts, flowers, displays and talents to make the summer of 1990 at Heritage Park one fo ree. member. | Over 5,000 people visited the ’ park museum, some coming 1 from as far away as Peru, Malaysia, Israel, Saudi Arabia and Barcelona, ‘Spain to enjoy our friendly history lesson. oo Mantic Kerby, . President, . ‘Terrace Regional | -. ‘Museum Society.