. 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.