Strategic Thoughts

bannerspacerAbout Me | Mail Me | My Stuffbannerspacer2

February 6, 2002

The following is from a leaked Ministry of Forestry document. It is the government songsheet for explaining its gutting of the Ministry of Forests.

Small Business Program/Timber Sales

Key Messages:

  • The small business program will continue to be a key function of the Forest Service, but under a new mandate, as the Timber Sales Program.
  • The Timber Sales Program has three objectives:
      to provide a credible reference point for costs and pricing of timber harvested
          from public land in B.C.
      to generate the best revenue return possible to the province recognizing the above; and
      to provide an opportunity for customers to purchase timber in an open and competitive market.
  • The objectives of the timber sale program, particularly as a price and cost reference, make it unique and require an independent operating and fiscal environment. The program will continue to contribute to the overall success of the forest service.
  • The changes to the Timber Sales Program are designed to be a key part of implementation of significant changes to the province's forest policy, and particularly its timber pricing policy.
  • As those policies are finalized over the next several months, the timing of implementation, including any transition provisions will be determined.
  • Structure and staffing are key short-term priorities. The Timber Sales Program Transformation Leadership Team will be working closely with the Operations Division Management Team.

Questions and Answers:

A. Government Decisions:

1. The Minister was directed by the Premier to prepare a plan to make the Small Business Program "more effective and put it on a commercial footing". What is ineffective and non-commercial about the existing program?

  • The review found that while the program is striving to be effective and commercial it is limited by both policy and organisational constraints.
  • The program has a large number of formal and informal objectives that are often contradictory. The commercial objectives have often been overridden.
  • The program's performance is limited by a financial and organisational structures that inhibits its effectiveness and ability to behave like a business.

2. Are the proposed new goals purely commercial?
The three goals proposed are all commercial in nature. They are balanced to achieve a set of public policy outcomes important to the overall health and competitiveness of the forest sector.

This does not mean that the timber sales program will ignore social and environmental interests. To the contrary, all effective and sustainable commercial enterprises understand the importance of a sound "triple bottom line" (economic/social/environmental). The difference will be that decisions will be made on the basis of commercial outcomes.

3. Will the program still play a leadership role in forest stewardship?
The program will look for opportunities to increase the value of its sales through high quality stewardship. British Columbia has very high standards for multiple-values management and the program will have to fully meet both the letter and intent of those standards. Where environmental certification will enhance the program's ability to meet its objectives, the necessary standards of management will be applied.

The program will not be used as an experimental logging program, nor as a tool to operate in areas deferred by forest companies due to conflicts or cost of operation. It will participate in innovative trials and pilot projects in co-operation with other parts of the ministry and with forest companies.

4. Is Section 21 going to be discontinued?
All of the existing sales types, including the Section 21 "bid proposal" sales were created for specific policy reasons. In view of the proposed new objectives for the timber sales program, and the changes being discussed for timber pricing policies, the program will focus on sales awarded solely on price competition.

Transition strategies will be developed for those groups of clients whose involvement in the program will change, including Section 21 clients.

5. Does eliminating focussed apportionments mean we aren't interested in diversity in or growing the Value-Added industry?
No. We are clearly interested in a forest industry that is globally recognised for its productivity and environmental stewardship. To achieve this the industry must be competitive and sustainable. Rather than have the government determine the make-up of the industry, our job is to create a climate of opportunity.

6. Will more volume be sold competitively?
We are starting from the assumption that all of the existing SBFEP apportionment will be sold on a price competitive basis. There is a strong interest in increasing the volume sold through competition, however we will not know the answer to that until decisions are made on a new timber pricing system. The timber sales program will be designed to be able to accommodate increased volume in the event of reapportionment.

7. Is the volume available to the program expected to remain constant? And will the changes affect existing licences?
At this time, planning is based on the current volume allocated to the Small Business Program, which is approximately 13% of the Provincial AAC. No, existing licences will not change.

8. Is the plan to make it a Crown Corporation?
Many of the individuals and groups who provided input to the SBFEP Initiative recommended the program be moved into a Crown Corporation. At this point the recommendation is to establish the program as distinct and separate business unit within the Forest Service.

B. Structure and People

9. Has the impact of the proposed organizational change on the rest of the Forest Service been considered?
Yes. There are clearly some disadvantages as well as advantages to both the program and the rest of the Forest Service by adopting the recommended model. We believe the advantages outweigh the disadvantages.

The entire Ministry will be focusing on its core businesses and setting specific goals and targets that will determine activities and priorities. To achieve those goals and targets effectively and efficiently requires organisational structure(s) designed accordingly. This applies equally to all aspects of the Forest Service mandate.

10. What will the Timber Sales Program structure look like and where will the delivery centers for the Timber Sale Program be located?
The program wil report to the Deputy Minister and will have a small headquarters staff who will do policy and business planning work. The majority of the program will be delivered through business unit offices at several locations throughout the province (we estimate between 10 and 20 locations - analysis on the final locations will be completed in a few weeks). Each business unit will be expected to manage between 400,000 and 1,500,000 m3 of sales volume annually. The program will strive to maintain a strong field presence by having some staff dispersed - putting them closer to their work.

11. How will the number of FTE's that are reassigned to the Timber Sales Program be decided?
A process will be jointly designed jointly between Regional Managers and the Transformation Team Leadership, and approved by the ADMs of Business Initiatives and Operations Division, to identify the positions to be reassigned. While some positions that focus 100 per cent of their time on the current Small Business Program will be reassigned, the reassignment of other positions whose work is split between the Small Business Program and other programs will be the result of more detailed discussions.

12. Who will be in the new Timber Sales Program and how will that be decided?
Positions in locations where Forest Service offices are located will be reassigned to the Timber Sales Program. Some positions in locations where Forest Service offices are being closed will be assigned to the new locations. The collective agreement will apply.

13. Is government contemplating the establishment of separate seniority blocks for Timber Sales Program staff?
Not at this time.


14. When will the new structure be implemented?
We are announcing the changes now in order to allow time for an orderly transition. The new structure will be implemented in stages over the coming months. We need to coordinate the implementation with other changes in the Ministry, as well as with the timelines eventually determined for implementation of the new pricing policy.

C. Policy Decisions

15. Who will be eligible to bid?
In the immediate term, existing eligible bidders. Eligibility may be broadened in the future if more volume is auctioned.

16. Will there still be opportunities for small operators?
Yes. In order to achieve all three of the programs recommended goals it will be necessary to provide a range of sizes and types of sales.

17. Will log yards be part of the new program?
No policy decision has been made specific to log yards. The program will continue to sell some logs in the course of normal operations, such as road building. Stand alone log yards can best be operated by the private sector. The Program must focus on auctioning fully developed standing timber to support our objective for a credible pricing benchmark.

18. What will happen to small scale salvage?
The timber sale program will be expected to address forest health and salvage issues within its operating areas on a commercial basis. It will be necessary to considerably streamline the planning and administration functions if a significant amount of small scale salvage is to continue in some areas. The program is not intended to be the salvage vehicle within the chart areas of major licensees.

19. How will timber to First Nations be managed?
The Timber Sales Program welcomes First Nations involvement in the competitive nature of the program.

20. How will changes fit into future tenure reform discussions?
Discussions on changes to the tenure system are in the very early stages. None of the changes proposed for the timber sales program are expected to conflict with tenure policy developments.

21. Will anything be done about the bid deposit and surrender issues?
Yes. These have been identified as important amongst the operational policy issues requiring attention. Some work is already underway to bring a greater level of consistency and fairness to the application of contract and deposit requirements. Fairness in a competitive environment will be a guiding principle for policy.


22. Will the program have more financial independence?

In order to measure effectiveness and encourage the program to be more commercial, the full range of costs and benefits must be well understood and taken into account when capital or operating decisions are made. In order to achieve its recommended goals the program must have both flexibility and accountability for financial decisions. We are working with Treasury Board on how best to accomplish this.

23. Will the program still pursue certification?
Yes. There are many advantages to third party validation of high standards. Not only does certification provide a performance benchmark for operational excellence, it can be an advantage in the marketplace, both for the program and its customers .It is important to remember that the field of certification is very dynamic and therefore the program will likely have to constantly adapt. The current timing in which the program is implementing its EMS program and seeks certification may be adjusted simply to allow the highest short-term transformation priorities to be met.

24. What are the transition provisions for policy changes?
A transition period for policy changes that impact businesses directly is envisioned. In the meantime, business will continue as usual.

25. Is the Timber Sales Transformation project linked with the other projects?
Yes. A member of the Timber Sales Leadership Team already participates in or has been assigned to link with each other project group that is appropriate given the Timber Sales project scope and Program goals.

E. Opportunities for involvement

26. What opportunities are there for interested staff to become involved in the transformation groups?
It is anticipated that additional resources will be required as we move through transition. The Transformation Leadership Team will work with ODMT and Branch Directors to include staff.

27. What opportunities for input will be provided to staff and managers?
High level decisions are being made by Government and the Executive. Staff and managers that are part of Timber Sales Program Transformation Teams will be directly involved in the design of implementation of those decisions. Consultation will occur with various managers throughout the province. Further, at key milestones, focus-testing of Business Unit makeup, etc., will be offered.

The team has members from across the province. Managers and staff can provide input through these staff or directly.

 

About Me | Mail Me | Navigation | Top
© 2002 David D. Schreck. All Rights Reserved.