Coast Allowable Annual Cut Verification and Key Driver Review and Analysis ( ) Phase 1 - Coast Allowable Annual Cut Stabilization Project

Transcription

1 Coast Allowable Annual Cut Verification and Key Driver Review and Analysis ( ) Phase 1 - Coast Allowable Annual Cut Stabilization Project Presented to the Coast Operational Issues Forum by the Coast Region FRPA Implementation Team (CRIT) April 24, 2014

2 m3/yr Coast Allowable Annual Cut Verification and Key Driver Review and Analysis ( ) Phase 1 - Coast Allowable Annual Cut Stabilization Project Executive Summary The Coast Region FRPA Implementation Team (CRIT) was tasked by the Coast Operational Issues Forum (OIF) to form a working group and report back on the following; 1) Verify Crown land allowable annual cut (AAC) from 1990 or before through ) Identify the primary (key) AAC drivers (positive and negative) during the period with particular focus on those that remain relevant today and going forward. 3) Quantify the AAC and long-run sustained yield (LRSY) influences of each driver through time. Part A - Confirming Coast Crown land AAC Trend In 1975 the coastal Crown land AAC was 23.6 million m 3 /yr. The AAC peaked at 24.5 million m 3 /yr in 1984 before declining to 17.5 million m 3 /yr in 2012 (29% decline) 1. This trend in AAC determinations is consistent in magnitude with the decline identified in the Issue Paper Coast AAC Decline presented during the February 7, 2013 Coast Operation Issue Forum meeting. (millions) 25 Coast Crown Land AAC Trend Total Crown Land AAC 5 0 Part B Identify and Quantify the Primary or Key Drivers Influencing AAC Trend The review/analysis considered a wide range of factors in identifying primary or key drivers that influence annual allowable cut determinations. 1 Total Crown land AAC does not include approximate 880,000 m3/yr of AAC attributed to private land removed from TFL s starting in i

3 AAC Determination Total (m3/yr) THLB Total (ha.) 1) Contributing Land Base The single largest factor influencing the ability to grow timber is the availability of timber harvesting land base (THLB). Factors that serve to reduce the THLB will in turn reduce the ability to grow timber and subsequent AAC determinations. The review/analysis indicates that there is a close, but not direct, correlation between the THLB and AAC determination, i.e. there may be some factors mitigating the effect of THLB reduction on AAC determinations. Millions AAC/THLB Comparison (TFL/TSA Cumulative Total) Thousands 4,500 4,000 3,500 3, ,500 2,000 1,500 1, AAC THLB The review/analysis identified and was able to quantify the following drivers that have reduced the THLB; Parks and ecological reserves, includes conservancies, ministerial orders, etc. Riparian management areas, Land use order retention areas, e.g. designated reserves, Stand and landscape level biodiversity, includes old growth management areas and wildlife tree retention areas and Wildlife habitat areas. Of this group, reductions associated with parks and ecological reserves, etc. exceed all other area reductions combined by a significant margin. 2) Forest Cover Constraints There are a wide range of forest cover constraints that influence AAC determinations and the number of constraints considered in AAC determinations has been increasing over time. It is difficult to isolate the effects that each additional forest cover constraint has on AAC determinations. Unless there is effort to co-locate management of multiple resource values ii

4 most, if not all, forest covers constraints result in spatial and/or temporal restrictions on harvesting that creates downward pressure on AAC determinations. 3) Growth and Yield Assumptions Growth and yield assumptions that go into timber supply modelling have been shown to have influences on AAC as these assumptions have changed over time. In some cases the influence has been negative (e.g. increased use of partial harvesting), but in many cases the influence is positive, e.g. improved site productivity estimates. The review/analysis was unable to quantify the influence of growth and yield assumptions directly. However, based on the information reviewed and the experience of the working group, updates and improvements to a number of growth and yield assumptions used in the timber supply review (TSR) process normally supports increased AAC determinations. Note: the review/analysis found that fall down was not identified as a contributing factor in more recent timber supply review process (TSR 2 and TSR 3). Part C Anticipated Future AAC Drivers Based on the information reviewed and the experience and expectations of the working group, the following future timber supply factors and relative influence on timber supply has been identified as possible future key drivers. Relative Influence on Timber Supply Negative Negative/Unknown Negative/Neutral Positive/Negative Positive Expected Future Timber Supply Drivers 2 Land use decisions, e.g. Ecosystem based management, Discovery Islands visual management Completion of Identified Wildlife Management Strategy Species at Risk, e.g. Goshawk Silvicultural systems, e.g. yield implications associated with high levels of overstorey retention. Non-recoverable losses, e.g. forest health risks First Nation Reconciliation Policy Utilization standards, e.g. mechanized harvesting, take or pay Reforestation assumptions, e.g. reduced regeneration delay and years to breast height assumptions. Silvicultural treatment, e.g. fertilization, increased planting using high genetic gain seed. Part D - Conclusion The review/analysis results confirm that there is an identifiable decline in the Coast Crown land AAC during the period 1975 to The Crown land AAC declined from a high of 24.5 million m 3 /yr in 1984 to 17.5 million m 3 /yr in 2012, a drop of 7 million m 3 /yr. The results of this review/analysis indicate that the decline is closely correlated to a reduction in the Coast THLB. The reduction in timber harvesting land base was identified as the most significant driver 2 Because we were unable to quantify the influence of these factors, the listed drives are not ranked in any particular order of priority. iii

5 influencing AAC. While not the same magnitude of influence as the reduction in the THLB, an increase in the number of forest cover constraints over time has created an additional downward pressure on AAC determinations. Based on information reviewed, data analysis and experience with the TSR process, the working group concludes that growth and yield gains realized over the recent past have lessened the full impact of THLB reductions and forest cover constraints on AAC s. The review/analysis was able to identify the magnitude of THLB reductions over the review period; however, the working group was not able to quantify the AAC and long run sustained yield influence individually for each of these three driver categories through time. The review/analysis includes information and discussion related to a number of other considerations that go into AAC determinations but were not identified as key drivers. Acknowledgments The working group responsible for this report include; Harry Barrett, International Forest Products Limited Romona Blackwell, Ministry of Forests, Lands and Natural Resource Operations Jim Brown, Ministry of Forests, Lands and Natural Resource Operations Peter Kofoed, Western Forest Products Inc. Mike Landers, International Forest Products Limited Joe LeBlanc, International Forest Products Limited Rick Monchak, TimberWest Forest Limited Chuck Rowan, Ministry of Forests, Lands and Natural Resource Operations Craig Wickland, Ministry of Forests, Lands and Natural Resource Operations Special thanks to; Denise Young, Forest Analysis and Inventory Branch, Ministry of Forests, Lands and Natural Resource Operations for providing access to much of the review information and data. Closing Remarks The Coast Region FRPA Implementation Team supports all efforts to maintain and enhance the Coast AAC. It is hoped that the literature review information, analysis results and summary comments contained in this report may be used to focus discussion and efforts aimed at meeting this goal. For additional information, contact the CRIT co-chairs; Chuck Rowan, Ministry of Forests, Lands and Natural Resource Operations Joe LeBlanc, International Forest Products Limited iv

6 Coast Allowable Annual Cut Verification and Key Driver Review and Analysis ( ) Phase 1 - Coast Allowable Annual Cut Stabilization Project 1) Introduction The goal 3 of the Phase 1 4 review/analysis is to; a) Verify Crown land allowable annual cut (AAC) from 1990 or before through b) Identify the primary (key) AAC drivers (positive and negative) during the period with particular focus on those that remain relevant today and going forward. c) Quantify the AAC and long-run sustained yield (LRSY) influences of each driver through time. 2) Scope The review/analysis area defined as the Coast includes all districts within the Ministry of Forests, Lands and Natural Resource Operations (FLNRO) West Coast and South Coast regions as well as the former North Coast District. The review/analysis focused on AAC determination results associated with tree farm licences (TFLs) and timber supply areas (TSAs) but did consider the implications of other area based timber tenures (including woodlot licences (WL), Community Forest Agreements (CFA), First Nation Woodland Licences (FNWL)) as well as private forest land removed from TFL s. The review/analysis tracked Coast AAC determinations from 1975 through ) Methodology 5 The Coast Region FRPA Implementation Team (CRIT) was tasked to form a working group (WG) of leading timber supply analysts from industry forest tenure holders and the FLNRO and use the WG s expertise and experience to analyse the issue as follows; identify and review available literature, compile and verify timber supply analysis reports, Chief Forester AAC determination rationale and other related information into data base, identify trends/results and quantify results supported by the data base, use the WG to truth the final trends/results and report on trends/results along with related commentary and conclusions as appropriate. Note: To identify and quantify the factors influencing AAC determinations, this review/analysis reviewed and used the same format used in Timber Supply Analysis reports and Chief Forester AAC determination rationales. 4) Results The results of this project are broken into four parts, i.e. A) Confirm Coast AAC Trend B) Identify and Quantify Factors Influencing AAC Trend 1. Contributing Land Base 2. Forest Cover Constraints 3. Growth and Yield and other Timber Supply Modeling Factors 3 Coast Operational Issues Forum (OIF) Delegation Instructions to Sub-group Coast AAC Decline for more details, April 15, Phase 2 of the analysis to be determined by the Coast OIF based on Phase 1 results. 5 CRIT Coast AAC Stabilization Project Work Plan Proposal, August 15,

7 4. Government Social/Economic Objectives C) Anticipate future AAC determination drivers D) Conclusion Caution Because of the complexity and detail involved in this project, the information and data compiled to determine AAC trend results is the best information available to the working group. The reader is reminded to consider the results in terms of trends and to avoid making interpretations based on individual year to year results. Part A - Confirming Coast Crown Land AAC Trend Figure 1 depicts the total Crown land AAC trend from 1975 to Figure 2 shows AAC trend broken down by management unit type. Note; the review/analysis did not consider timber supply available from federal lands, Managed Forests designated prior to 2002 or other private lands used for timber supply. Results In 1975, the Coast Crown land AAC (including North Coast District) was 23,566,752 m 3 /yr. It maintained this level (fluctuating up and down) through It began to rise slowly in 1981 peaking at 24,492,618 m 3 /yr in The AAC remained close to its peak through After 1990, the Coast AAC steadily declined to 17,476,121 m 3 /yr in 2012 (29% decline from the 1984 peak) 6. 6 Total Crown land AAC does not include approximate 880,000 m3/yr of AAC attributed to private land removed from TFL s starting in

8 m3/yr Figure 1. Coast Crown Land AAC Trend (millions) 25 Coast Crown Land AAC Trend Total Crown Land AAC 5 0 Note: Figure 1 includes TFL, TSA, woodlot licence, community forest areas, FN Woodland licences but not private land removed from TFLs starting in 2002 (approximately 880,000 m 3 /yr). Figure 2. Coast Annual Allowable Cut Trend Break-down by Management Unit (m3/yr) 25,000,000 Coast Allowable Annual Cut 20,000,000 PL FNLW 15,000,000 10,000,000 5,000,000 CFA WL TFL TSA 0 3

9 Note: Figure 2 AAC data includes break down by management unit type as well as private land (PL) removed from TFL s starting in Part B Identify and Quantify the Factors Influencing AAC Trend The review/analysis considered a wide range of factors, many of which are inter-related capable of influencing timber supply. To get a sense of the scope of these factors, a sub-set of the timber supply review (TSR) reports (from the nine currently active TSA areas) were reviewed to determine the average number and types of factors considered in the review/analysis and to see if there were any trends associated with any of these factors. Table 1 indicates that the highest average number of factors per TSR process appears to be those associated with identifying the contributing land base, growth and yield (G&Y) assumptions and forest cover constraints used in timber supply modeling. The only trend of note is an increase in the number of forest cover constraints over time. Table 1. AAC Determination Factors AAC Determination Average number of factors per TSA determination Factors TSR 3 ( ) TSR 2 ( ) TSR1 ( ) Contributing Land Base Growth and Yield and Other Timber Supply Modeling Assumptions Silvicultural Treatments Utilization Forest Cover Constraints Social Economic Objectives Alternate Harvest Flow Other Average Total For the purpose of quantifying AAC determination factors, the list of factors in Table 1 was grouped into four broad category that commonly contribute to the AAC determination, i.e. 1) the amount of land base contributing to timber supply, 2) forest cover constraints (spatial and temporal) 3) growth and yield and other modeling assumptions (including silvicultural treatments, utilization and non-recoverable losses), and 4) government social and economic objectives (includes the remaining factors listed in Table 1). 1) Contributing Land Base Typically, information/data used to support an AAC determination will describe the contributing land base in terms of three components, i.e. total area, productive forest land base (PFLB) and timber harvesting land base (THLB). The PFLB and THLB are calculated by deducting various land categories based on their potential to contribute to timber supply. The THLB is an important element in calculating the base case harvest forecast which in turn is used to support the AAC determination. 4

10 Area (ha) (a) Timber Harvesting Land Base Determination To determine contributing land base trends dating back to 1975, the working group attempted to review AAC determination decisions and the associated supporting information over this period. The review found that there were three distinct AAC determination processes used during this period, i.e. the AAC determination process has evolved over time into the current TSR process. While each process includes a determination of total area, PFLB and THLB as a basis for determining AAC, we found that there is inconsistency s in how these areas are reported and identified gaps in available information. Because of this, we were unable to track total area, PFLB and THLB across the Coast all the way back to However, there was sufficient information available to track these areas back to Figure 3 illustrates the change in the contributing land base, as defined by Timber Supply Analysis reports from 1981 to Figure 3. Contributing Land Base Contributing Landbase (TFL/TSA Cumulative Total) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 PFLB THLB 2,000,000 1,000,000 0 Figure 3 shows that the; PFLB has remained steady throughout the reporting period (0.8% increase) From the time the AAC peaked in 1984, the THLB has dropped from 3,959,019 ha. to 2,496,677 ha. (37% reduction) THLB as percentage of PFLB has declined from 60% to 38% Note: Figure 3 trend lines include reduction in contributing land base due to establishment of woodlots, CFA and FNWL and removal of private forest land from TFLs after Note: the total area was not included in the review/analysis because we were unable to track accurate data for total area numbers, i.e. the numbers are represented differently between TFL 5

11 AAC Determination Total (m3/yr) THLB Total (ha.) and TSA management units and they are not reported in a consistent manner between different TSA reports. (b) AAC/THLB Comparison Figure 4 illustrates the relationship between the THLB and AAC determinations specific to TFL and TSA management units. This figure indicates that from the time the TFL/TSA AAC peaked in 1984 at 24,492,618 m 3 /yr, it declined to 16,802,173 m 3 /yr (31% decline), whereas, the associated THLB went from 3,959,019 ha. to 2,496,677 ha. (37% decline) over the same period. Note: because we were unable to accurately track the THLB of WL, CFA, FNWL and private land removed from TFL s, the AAC and THLB cumulative totals in Figure 4 only represents TFL and TSA management units, i.e. AAC in Figure 4 does not match AAC in Figure 1. Figure 4. AAC/THLB Comparison Millions 30 AAC/THLB Comparison (TFL/TSA Cumulative Total) Thousands 4, ,000 3,500 3,000 2,500 2,000 1,500 1, AAC THLB (c) Contributing Land Base Deductions We assessed contributing land base in terms of productive forest land base and timber harvesting land base. Note: land base deductions identified in this review/analysis use the Timber Supply Analysis process to account for overlapping land base constraints, i.e. to avoid double counting. 6

12 Production Forest Land Base (PFLB) For the purpose of the timber supply review process, the PFLB is defined by applying biophysical deductions to the total area. Table 2 lists the deductions from the total area to define the PFLB (from TSR 1 through TSR 3) and quantifies the influence of each; i. Land base deductions increased due to the following factors; area based forest tenure removals, e.g. WL, CFA, FNWL private land/ir removals, e.g. private land removed from TFLs and low site index areas ii. Land base deductions decreased due to the following factors ; non-forest/non-productive forest types inoperable/inaccessible areas 7 environmentally sensitive areas, e.g. terrain non-merchantable or problem forest types, e.g. low volume/value forests iii. There was no change in the PFLB due to the following factors; timber license s (un-reverted) non-commercial brush existing roads, trails and landings Timber Harvesting Land Base (THLB) For the purpose of the timber supply review process, the THLB is defined by applying forest management objectives/decisions deductions to the PFLB. Note: in this review/analysis, THLB is used in the context of analysing timber supply and is not meant to define the operable land base. Table 3 lists the deductions from the productive forest land base used to define the THLB (from TSR 1 through TSR 3) and quantifies the influence of each; i. Land base deductions increased due to the following factors Parks and Ecological reserves, includes conservancies, ministerial orders, etc. Riparian Management Areas Land Use Order retention areas, e.g. designated reserves Stand and Landscape Level Biodiversity, includes OGMA s and WTRAs and Wildlife Habitat Areas ii. There was no change in the influence on the THLB due to the following factors Permanent sample plots Permanent NSR Ungulate Winter Range Recreation Values Cultural heritage resources Water quality Visuals 7 The cyclical nature of wood markets on the Coast tends to make the operable land base expand and contract over time ultimately influencing the PFLB and THLB used in the TSR process. 7

13 Table 2. Coast Productive Forest Land Base (TFL/TSA) Contributing Land Base Considerations TSR 3 (2007-Current) 1 TSR 2 ( ) 2 TSR 1 ( ) 3 Area (ha) Percent of Total Area (%) Area (ha) Percent of Total Area (%) Area (ha) Percent of Total Area (%) Total Area 13,530, % 12,273, % 12,581, % Less: Private Land, Indian Reserves 1,299,890 10% 1,201,805 10% 762,108 6% TFL s, CFA s, Woodlots, Misc Leases, Etc 856,899 6% 770 0% 10,837 0% Timber License s (un-reverted) 5,279 0% 1,612 0% 1,030 0% MU Area (TSA and TFL) 11,368,243 84% 11,069,546 90% 11,807,029 94% Non forest/non-productive forest 5,448,378 40% 5,380,310 44% 5,435,123 43% Non-Commercial Brush 16,664 0% 4,016 0% 8,034 0% Existing Roads, Trails and Landings 48,883 0% 86,356 1% 60,895 0% Forest Land Base 5,854,318 43% 5,598,866 46% 6,302,978 50% Inoperable/Inaccessible 1,935,242 14% 1,518,433 12% 2,196,184 17% Low Productivity Sites 215,777 2% 587,931 5% 124,834 1% Environmentally Sensitive Areas (ESA s) 249,425 2% 503,530 4% 489,829 4% Non-Merchantable or Problem Forest Types 46,407 0% 58,127 0% 305,365 2% Productive Forest Land Base (PFLB) 3,407,467 25% 2,930,845 24% 3,186,766 25% 1 TSR 3 represented by 19 management unit AAC determinations out of total of 27 active management units. 2 TSR 2 represents 20 management unit AAC determinations out of total of 24 active management units. 3 TSR 1 represents 24 management unit AAC determinations out of total of 25 active management units. 8

14 Table 3. Coast Timber Harvesting Land Base (TFL/TSA) Contributing Land Base Considerations TSR 3 (2007-Current) 1 TSR 2 ( ) 2 TSR 1 ( ) 3 Area (ha) Percent of Total PFLB (%) Area (ha) Percent of Total PFLB (%) Area (ha) Percent of Total PFLB (%) Productive Forest Land Base (PFLB) 3,407, % 2,930, % 3,186, % Less: Parks and Ecological Reserves 842,180 25% 69,217 2% 80,290 3% Permanent Sample Plots 4,698 0% 1 0% 2,497 0% Permanent NSR 1,350 0% 978 0% 167 0% Riparian Management Areas 197,416 6% 160,895 5% 65,993 2% Ungulate Winter Range 8,788 0% 13,057 0% 0 0% Recreation Values 13,095 0% 32,450 1% 15,507 0% Stand and Landscape Level Biodiversity 96,638 3% 102,435 3% 35,587 1% Wildlife Habitat Areas 88,023 3% 26,080 1% 25,086 1% Cultural Heritage Resources 4,469 0% 6,602 0% 250 0% Water Quality 2 0% 0 0% 144 0% Visuals 0 0% 0 0% 13,652 0% LUO First Nation Cultural Objectives 33,092 1% 0 0% 0 0% LUO Aquatic Habitat 34,041 1% 6,302 0% 0 0% LUO Biodiversity 25,287 1% 0 0% 0 0% LUO Wildlife 12,829 0% 0 0% 0 0% LUO Forest Reserves 56,532 2% 4,664 0% 0 0% SRMP (Other) 3,934 0% 15,037 1% 64,573 2% Timber Harvesting Land Base (THLB) 1,985,093 58% 2,493,127 85% 2,883,021 90% 1 TSR 3 represented by 19 management unit AAC determinations out of total of 27 active management units. 2 TSR 2 represented by 20 management unit AAC determinations out of total of 24 active management units. 3 TSR 1 represented by 24 management unit AAC determinations out of total of 25 active management units. 9

15 2) Forest Cover Constraints Beyond the direct impact on the contributing land base, the THLB is often, if not always, expected to be managed under an integrated resource management regime, i.e. balance resource management decisions between competing resource management objectives. So while the THLB remains available for timber harvesting, there are often a number of other resource management objectives that influence when, what and how much timber will be harvested at any given time, i.e., forest cover constraints. In most cases, if not all, forest covers constraints result in spatial and/or temporal restrictions on harvesting that creates downward pressure on AAC determinations. In the TSR process, forest cover constraints for specific forest resources objectives are often expressed in terms of maintaining a desired age distribution of forest cover. The TSR modelling process considers how forest management objectives influence the AAC determinations, i.e. base case harvest forecast and associated sensitivity analysis where appropriate. Age to greenup (height and site occupancy) is often used in the TSR modelling process to account for visual, hydrological, wildlife or other resource management objectives. Table 4 below lists a number of forest cover constraints identified within various TSA reports and identifies how often each forest cover constraint was considered in the corresponding TSR process. Table 4. Forest Cover Constraints Influencing TSR Process Forest Cover Constraints 8 TSR 3 ( ) TSR 2 ( ) Visual Quality Landscape Level Biodiversity Water Quality Riparian Management Environmentally Sensitive Areas Recreation Cultural Heritage Resources Higher Level Plans and Land Use Orders Total # AAC Determinations Average # Forest Cover Constraints per AAC Determination TSR 1 ( ) ) Growth and Yield and other Timber Supply Modeling Factors Once the THLB is defined, it is used in a timber supply model to grow and harvest the forest over a specified timeframe as part of the process to model a base case harvest forecast. The base case harvest forecast is the foundation for the AAC determination. The forest modeling results are dependent on a number of growth and yield (G&Y) and other timber supply modeling assumptions/factors. 8 The list is provided as an example of forest management objectives that influence AAC determinations, i.e. it is not an exhaustive list. 10

16 AAC/THLB (m3/yr/ha) In order to help quantify the influence of timber supply modelling assumptions, the working group looked for an indication of the change in relative THLB productivity over time. Figure 5 shows the relationship between THLB and the associated AAC determinations. The figure indicates an increase in the productivity capacity of the THLB from 1981 to 1996 then holds somewhat steady from 1996 onward. Note: The magnitude of this relationship (6-7 m 3 /yr/ha) is consistent with results from the Sunshine Coast TSA TSR 4 analysis. Note: this result should be used with caution as it ignores the interrelated influences of changes to the contributing land base and changes in government social/economic objectives that occurred over this period. Figure 5. AAC/THLB Comparison AAC/THLB (TFL/TSA) AAC/THLB (a) Growth and Yield Assumptions Table 5 below lists the factors typically used as inputs to model timber supply to determine the base case harvest forecast as well as factors that the working group understood to be identifiable AAC drivers. While it is difficult to quantify the influence of each of these factors, the working group identified the relative influence of each of the factors on timber supply based on experience with the TSR process. 11

17 Table 5. Growth and Yield Factors Growth and Yield Factor Details Influence on timber supply Existing Forest Inventory Updated stand volume estimates Positive/negative Updated harvest depletion reporting Positive/negative Updated taper loss factor Positive/negative Expected Rate of Updated site productivity estimates Positive Growth Updated minimum harvest age Positive/negative Regeneration delay Reduced regeneration delay period Positive Reduced years to breast height Positive Reduction in NSR area Positive Silviculture treatments Increased use of partial cutting impact Negative Increased genetic gain in seed and Positive stock Increased fertilization applications Positive Increased management to density and Positive/negative species targets Standard of timber Utilization Standards Positive/negative utilization Decay, Waste, Breakage Positive/negative Unsalvaged losses Positive/negative (b) Operational Adjustment Factors Operational adjustment factors (OAF) are applied to managed stand growth and yield estimates to account for various non-spatial factors that result in managed stands producing less than their full potential yields. Two different OAF s are typically used on the Coast. OAF 1 is used to represent gaps in stocking that result from non-productive areas within stands, disease and insects and non-commercial cover. OAF 2 is used to represent decay, waste, and breakage losses. OAF 1 is a constant reduction factor that shifts the yield curve down where as the influence of OAF 2 increases with age and changes the shape of the yield curve. Based on a random sample of a limited number of AAC determinations it was found that the application of OAF s typically reduced managed stands yields by 1) OAF 1-15% and 2) OAF 2-5%. OAF 2 is normally increased to 12% when applied to Douglas-fir leading stands. It appears that the OAF has not changed appreciably since the introduction of the TSR process, i.e. there is no evidence correlating OAF s with the Coast AAC decline. (c) Forest Estate Models Forest estate models are used in the TSR process to develop the base case harvest forecast. The review found that a number of different models have been used (14 different models) through the current TSR 1 to TSR 3 period. These models are continually being updated and improved over time. While we are gaining more experience in forest estate modeling, there is no evidence available to us that correlates updated models to the Coast AAC decline. 12

18 (d) Timber Supply Analysis Approach The base case harvest forecast is subject to data input uncertainty. The TSR process uses a number of guiding principles to manage uncertainty which in turn influences the AAC determination including; Minimize risk, i.e. look for assurances that the AAC is not overly optimistic Re-determining AAC s frequently and as needed to reflect new and changing factors Look for and incorporate demonstrated performance to substantiate operability and forest management factors/assumptions Use sensitivity analysis to test the strength of the base case harvest forecast Utilize base case harvest forecast as starting point for testing the influence of social, cultural and economic factors relevant to forest management factors/assumptions Avoid speculating on timber supply impacts that may eventually result from land-use decisions not yet finalized by government Utilize other information that relates to the capacity of the area to produce timber There is an argument to be made that these principles do influence the final AAC determination but again, there is no evidence available to us to determine what influence, if any, they may have on AAC determinations. (e) Management Unit Amalgamation/Fragmentation The size and number of management units (MUs) analysed makes a difference to cumulative timber supply, i.e. that combining multiple MUs or blocks into a single unit will in some cases yield a higher, short-term (modelled) timber supply than the sum of individual MUs. The 2012 timber supply analysis for Haida Gwaii explored the question of whether three MUs (TSA 25, TFL 60 and TFL 58) modelled as a single unit could sustain more harvest than the sum of the three MUs forecasts. In that case, managing as a single unit allowed the timber supply model additional flexibility to fill a gap in available timber within one MU with volume from another MU. The results indicate that the initial harvest level (over four decades) from the single-unit forecast was 10.3% greater than the sum of individual MUs and was 5.1% greater over the second four-decade period. The long term timber supply was unchanged. More recently, an addendum to the TSA report for TFL 47 9 compared modelling results between a base case harvest forecast for the entire TFL versus modelling three different partitioned units within the TFL separately (assuming an even flow harvest levels). In this example, the sum of partitioned modelled harvest level is (8.4%) less than the even-flow harvest level for the TFL modelled as a single unit. This reduction in harvest forecast is a consequence of the loss of operating flexibility that comes from treating partitioned units as a sustained-yield unit and applying an even-flow requirement to the harvest levels. Subsequently, any tenure that is subdivided will suffer some loss of even-flow harvest volume. The magnitude of the loss depends on the underlying timber supply dynamics age class distribution and other scheduling constraints. Over the period examined in this study ( ) there have been a number of MU s (both TFL and TSA) that have amalgamated creating an opportunity to increase the sustainable timber 9 TFL 47 Timber Supply Analysis, Addendum #3, TimberWest Forest Corp. Ltd., 7 February

19 supply. Conversely, the working group noted examples of land use order partition decisions and various business and policy decisions (TFL private land withdrawals, BC Timber Sales, woodlots, CFA, FNWL programs) that have resulted timber supply analysis being applied to more and smaller MUs. While we have some good examples of the effects of amalgamation/fragmentation on AAC, there is no information/data available that correlates changes in MU area with the Coast AAC decline. f) Falldown Effect The concept of fall down effect was identified in the 1976 Pearse Report and fall down effects were referenced in subsequent Chief Forester s AAC determinations and in the 1980 and 1984 Forest and Range Resource Analysis reports. However, as our understanding of forest inventory and growth and yield assumptions improve with time, and we progress towards increased establishment of managed stands, the fall down effect appears to have little, if any, influence on more current AAC determinations, i.e. fall down was not identified as a contributing factor in more recent timber supply review process (TSR 2 and TSR 3). 4) Government Social/Economic Objectives (a) Minister s Letters and Ministry TSR Policy The Chief Forester is guided in his/her AAC determination by Minister s letters as updated from time to time. Table 6 below lists the Minister letters dating back to the beginning of the TSR process. These letters are often the source of various TSR process policies, direction, guidance etc. 14

20 Table 6. Minister s Letters Date Summary of Minister Letter Direction July 28, 1994 Emphasize importance of continued availability of good forest jobs and the long term stability of communities. February 26, Economic and social objectives regarding visual resources 1996 Ensure an appropriate balance within TSA and TFL areas between protecting visual resources and minimizing the impact of such protection measures on timber supplies. Consider modified policy on management of scenic landscapes. September 17, Social and economic objectives of the Crown in the Clayoquot Sound area 1996 Management of areas to be carried out in accordance with both the Forest Practices Code of BC Act and the recommendations of the Scientific Panel for Sustainable Forest Practices in Clayoquot Sound. July 4, 2006 Consider the importance of a stable timber supply in maintaining a competitive and sustainable forest industry, while being mindful of other forest values. Consider the nature of timber supply that can contribute to a sustainable Coast forest industry, while reflecting decisions made in land and resource management plans. Consider important local social and economic objectives expressed by the public during the TSR process... as well as any relevant information received from First Nations. (b) Ministry TSR Policy and Harvest Flow Considerations The Ministry has developed various policy, direction, guidance, etc. to help guide the TSR process, i.e. harvest flow considerations. Below are some key guiding principles used in the TSR process that have the potential to influence the AAC determination; Goal to provide a managed and gradual transition from short term to medium and long term harvest levels and avoid large and abrupt disruptions in timber supply. Attempt to achieve the current AAC for as long as possible without causing severe and abrupt disruptions in timber supply. Set AAC to avoid, and if not possible, minimize drop in midterm harvest level below long term harvest level (LTHL). When necessary, reduce timber supply at a controlled rate, with the decline normally limited to a maximum of 10 percent per decade. A medium-term drop below the LTHL may be contemplated only when necessary to maintain short-term timber supply levels and when the medium-term level is at least as high as the long-term productivity associated with unmanaged stands. The drop below the LTHL may be justified given the expectation that active forest management will increase long-term productivity above levels expected from unmanaged stands. In general and on average, managed stands demonstrate productivity from 20 to 35 percent higher than unmanaged natural stands. Site index adjustments may make the difference larger. Nevertheless, the smooth transition between the short, medium and long terms is preferable. 15

21 A medium-term drop below the LTHL should last the minimum length of time, and the LTHL should be reached by the time harvests are forecast to come primarily from managed, regenerated stands. The LTHL should be close as possible to the maximum sustainable level given land base productivity and forest management requirements, and ensure that total growing stock on the THLB remains at reasonably constant level. Long-term timber supply should not be reduced to allow for higher levels in the short or medium term. Harvest flow considerations used in Coast AAC determinations are commonly used to manage the transition from short-term to long-term timber supply in order to avoid abrupt changes in timber supply and mitigate anticipated mid-term AAC reductions. However, there is no evidence available to correlate the effect of harvest flow considerations on the Coast AAC decline. (c) Legislated AAC Determination Requirement The AAC determination process is directed by legislation, i.e. section 8 of the Forest Act, (section 7 under earlier versions of the Forest Act). The legislation provides authority to make an AAC determination and it provides direction as to what must be considered in the AAC determination. The list of factors included in the legislation has remained largely the same over time (more recent legislation amendments direct aggregate AAC determinations covering Haida Gwaii). The legislation includes authority to partition an AAC determination. While the use of partitions in AAC determination has the potential to create downward pressure on AAC, there doesn t appear to be a wide scale use of this authority, i.e. there is insufficient evidence to correlate the use of AAC partitions to the Coast AAC decline. (d) Government First Nations Policy The TSR process is responsive to governments First Nation (FN) Reconciliation Objective and the AAC determination is subject to government s constitutional obligation to consult with FN. i. First Nation Reconciliation Objective Government reconciliation objectives have resulted in a number of land use decisions that influence AAC determination, e.g., treaty, reconciliation agreements, interim measures agreements, and government to government land use decisions, etc. The TSR process considers these objectives in terms of contributing land base deductions and forest cover constraints associated with these reconciliation objectives. ii. First Nation Consultation and Accommodation The AAC determination is subject to FN consultation and accommodation review process. The Chief Forester normally recognizes and responds to all FN consultation input in documented rationale. In the review of the AAC determination rationale documents, it was found that much of this input had already been identified and addressed in the review/analysis or it was not within context of AAC determination. We found very few instances where FN accommodation requirement directly impact the AAC determination. 16

22 (e) Local Objectives The AAC determination is informed by a public review and comment process. The Chief Forester normally recognizes and responds to local issues in his/her rationale. In the review of the AAC determination rationale documents, it was found that much of this input had already been identified and addressed in the review/analysis or it was not within context of AAC determination, i.e. there were very few instances where local objectives directly impact AAC determination. (f) Chief Forester Considerations The role of the Chief Forester is to consider the degree to which all the assumptions made in generating the TSR process base case harvest forecast are realistic and current, and the degree to which resulting predictions of timber supply must be adjusted to more properly reflect the current and foreseeable situation. The AAC determination itself is not simply a calculation, i.e. it is a synthesis of judgment and analysis in which numerous risks and uncertainties are weighed. To determine the level of influence that Chief Forester considerations have on the AAC, the working group compared the TSA base case harvest forecast to the final AAC determinations. Table 7 below shows the results of this comparison. Based on these results, there is no strong correlation linking the results of Chief Forester consideration to the declining AAC trend. Table 7. Chief Forester (CF) Base Case Harvest Forecast Adjustment Factors CF Base Case Harvest Forecast Adjustment Factors TSR 3 ( ) TSR 2 ( ) TSR 1 ( ) # of AAC Determinations Positive Adjustment Negative Adjustment Neutral Adjustment Average CF AAC Adjustment -2.4% 0.8% 1.1% Part C Anticipated Future AAC Drivers 1) Projecting Future AAC The TSR process establishes a base case harvest forecast for the current as well as mid and long term projections. A review of this information suggests that the Coast AAC will continue to decline bottoming out in roughly 6 decades before rebounding to long term harvest level in approximately 14 decades. These results assume that there will be no further decline in the THLB, all conditions will remain the same and that we have sufficient information to accurately predict the future. The reality is that timber supply is modelled based on a wide range of assumptions and surrogate information and conditions constantly change. Predictions about the future are based on the best available information at the time of the analysis. Given the degree of change in contributing land base, forest cover constraints, growth and yield and other timber supply modelling assumptions and government social and economic objectives experienced in the recent past, the working group views any attempt to predict future AAC determinations with caution. The expectation is that the future is likely to include additional land use and forest 17

23 cover constraints creating additional downward pressure on timber supply. This downward pressure is likely to be mitigated, to some extent, through the application of growth and yield gains realized through updated inventory and research efforts. 2) Identify Factors Influencing Future AAC Determinations This review/analysis attempted to identify factors that are expected to influence future AAC determinations based on the following inputs. (a) Chief Forester AAC Determination Rationale - Mid and Long Term Factors As part of the TSR process, the Chief Forester will often identify mid and long term factors, indicating whether they have a positive, negative or neutral influence on the mid and long term harvest forecast and if possible, identifies how much the factor modifies the base case harvest forecast (in term of percentage of the base case harvest forecast, i.e. m 3 /yr). Table 8 summarizes mid and long term factors identified within AAC determination rationale documents (for TSR 3). While not a comprehensive list, these factors provide a starting point for understanding what will drive future AAC determinations. Table 8. TSR 3 Base Case Harvest Forecast (Mid and Long term) Modification Factors Mid and Long Term Timber Supply Factors Detail Description of Mid and Long Term Factors Timber Harvesting Land Base and Forest Cover Constraints Inoperable/Inaccessible Updated operability mapping Land base Administration Impact of establishing additional WL, CFA and FNWL areas Roads, trails, landings Harvest Performance Confirming harvest performance in marginal stands Conservancies Pending designations Identified Wildlife Management Strategy Additional WHA s not accounted for Land Use Decisions EBM and Wild Spirit Places impacts Cultural heritage resources FN cultural and archaeological values Visual Quality Objectives Unaccounted for Scenic Areas and differences between visual inventory and VQO IRM General Underestimation of Spotted Owl habitat requirements Growth and Yield Estimated Stand Volume Managed stand, OAF, dead potential Harvest depletions Undercut Forest Inventory Timber quality uncertainty Site productivity Site index under estimated Partial cutting impact Impact on regeneration performance Genetic gains Use of select seed 18

24 (b) Chief Forester AAC Determination Rationale - Implementation Instructions As part of his/her AAC Determination Rationale, the Chief Forester often includes Implementation Instructions designed to prepare for and inform the next AAC determination. Table 9 summarizes Chief Forester implementation instructions identified within AAC Determination Rationale document (for TSR 3). While not a comprehensive list, these instructions identified by the Chief Forester provide a starting point for understanding what will drive future AAC determinations. 19

25 Table 19. TSR 3 Chief Forester Implementation Instructions Implementation Instruction Comments Timber Harvesting Land Base and Forest Cover Constraints Inoperable/Inaccessible Review economic feasibility of marginal stands Environmentally sensitive areas Assess appropriate contribution of ESA terrain areas Non-Merchantable or Problem Estimate deciduous volume Forest Types Land base Administration Discrepancies in TSA boundaries, potential for area based AAC management Roads, trails, landings Harvest Performance Including species profile, non-conventional, marginal economic operability, Identified Wildlife Management Strategy Complete IWMS, monitor results, develop habitat management plans Biodiversity Refine OGMAs, finalize LU planning Land Use Decisions Monitor impact of EBM on timber supply, field practices, THLB, silvicultural systems, and G&Y Riparian Management Area Refine assumptions, quantify reserves, monitor buffering results Cultural heritage resources Monitor impact on timber supply of maintain access to Cw, managing CHR s Visual Quality Objectives Monitor impact Recreation Values Account for recreation sites and trails IRM General Manage land base deductions for multiple values Growth and Yield and other timber supply modeling factors Estimated Stand Volume Vegetation Resource Inventory Harvest depletions Update inventory Forest Inventory Including VRI, TEM, SIBEC, etc. Harvest profile Yc decline, Cw/Yc harvest profile, Cw strategy Dead potential volume Update volume estimate, track utilization Harvest flow Transition to second growth harvesting TS forecast planning tools Monitor inventory uplift potential Site productivity Confirm/improve site productivity estimates Minimum harvest age Define minimum harvest age Growth and yield Estimates from managed stands Operational adjustment factors Develop more accurate values Partial cutting impact Monitor retention level and impact on regeneration Genetic gains Quantify use of select seed, improve genetic gain Silvicultural systems Monitor use of partial cutting Silvicultural treatments Monitor use of fertilization Un-salvaged losses Quantify amount of un-salvaged losses Decay, Waste and Breakage Monitor losses 20

26 (c) Expected Future Timber Supply Factors Based on the review information obtained and the expertise and experience of the working group, Table 10 summarizes a number of factors likely to influence future AAC determinations. Table 10. Expected Future Timber Supply Factors Relative Influence Expected Future Timber Supply Factors on timber supply Negative Land use decisions, e.g. Ecosystem based management, Discovery Islands ecotourism Completion of Identified Wildlife Management Strategy Species at Risk, e.g. Goshawk Increased stand level retention, e.g. partial harvest, intermediate cutting Negative/Unknown Non-recoverable losses, e.g. forest health risks Negative/Neutral First Nation Reconciliation Policy Positive/Negative Utilization standards, e.g. mechanized harvesting, take or pay Positive Reforestation assumptions, e.g. reduced regeneration delay and years to breast height Silvicultural treatment, e.g. fertilization, increased planting using genetically improved seed. Part D - Conclusion The review/analysis results confirm that there is an identifiable decline in the Coast Crown land AAC during the period 1975 to The Crown land AAC declined from a high of 24.5 million m 3 /yr in 1984 to 17.5 million m 3 /yr in 2012, a drop of 7 million m 3 /yr. The results of this review/analysis indicate that the decline is closely correlated to a reduction in the Coast THLB. The reduction in land base was identified as the most significant driver influencing AAC. While not the same magnitude of influence as the reduction in the THLB, an increase in the number of forest cover constraints over time has created an additional downward pressure on AAC determinations. Based on review information, data analysis and experience with the TSR process, the working group concludes that growth and yield gains realized over the recent past have lessened the full impact of timber harvesting land base reductions and forest cover constraints on AAC s. The review/analysis was able to identify the magnitude of THLB reductions over the review period; however, the working group was not able to quantify the AAC and long run sustained yield influence individually for each of these three driver categories through time. 21