Forestry Governance and Policy Summary

Market Failures in Forestry:

• External Costs:
• Harmful impact on essential forest services:
  • Wildlife habitat
  • Hydrologic services
  • Scenic amenities
  • Biodiversity losses
  • Climate change effects
• Government Market Failures:
• Incentives for deforestation:
  • Subsidized credit
  • Tax concessions for agricultural development (e.g., Brazil)
  • Infrastructure subsidies
• Poorly Defined Property Rights:
• Limited conservation incentives for timber contractors
• Restricted rights on public land

Forest Policy - Federal:

• Provinces manage forest resources under the Constitution Act
• Federal roles include:
• Conducting research
• Being involved in international negotiations
• Coordinating national strategies for reforestation
• Promoting Canadian forest products abroad

Forest Policy - Provincial:

• Annual Allowable Cut (AAC):
• Maximum logging rate defined by provinces.
• Criteria for setting AAC often vague.
• New Legislation:
• Addressing ecosystem concerns due to past practices (clear-cutting, etc.).

Forest Tenure Types:

• Volume-based Tenure:
• Right to harvest a certain timber volume in a large area.
• Shorter duration (1-15 years).
• Area-based Tenure:
• Right to harvest in a strictly defined area.
• Longer duration (20-25 years) with management obligations.

Forest Certification:

• Third-party systems ensure sustainability of forest products:
• Canadian Standards Association (CSA)
• Forest Stewardship Council (FSC)
• Sustainable Forestry Initiative (SFI)
• Benefits include boosting consumer confidence and potential premium prices.

Fire Management Policies:

• Recognizing the ecological role of fire, while preventing extreme damage.
• Different zoning:
• Full Response Zones: Near communities & high timber value areas are extinguished.
• Modified & Observation Zones: Allowing some fires based on values vs costs.