Earlier this month, the Alberta government announced that it had signed a new forest management agreement.
The 20-year agreement gives Crowsnest Forest Products Ltd. the ability to extract timber from forests within a 3,500 square kilometre area known as Forest Management Unit C5 (shown in purple below), located in the Rockies of southwestern Alberta.
According to the announcement, the agreement prohibits Crowsnest Forest Products from extracting forest timber from Castle Provincial Park.
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This is the first forest management agreement the provincial government has signed in over 20 years. Prior to this signing, the most recent agreement was signed in 2009 with Weyerhaeuser Company Limited.
The announcement reported that the agreement will result in $32 million to the provincial government through the collection of timber dues, as well as holding and protection charge payments, from the company extracting the forest timber.
Keep in mind, however, that the $32 million is for the 20-year period, which averages out to $1.6 million a year in additional revenue. For reference, the government brought in $11.3 billion in total revenue last year, not just forest-related revenue.
In other words, this new agreement will increase provincial revenue by 0.014% a year.
Another claim the government made in the announcement was that the agreement would add $225 million to Alberta’s GDP. Again, that’s over 20 years, so the per-year average would actually be about $11.25 million.
Alberta’s GDP in both 2018 and 2019 was a little more than $334 billion. That means this agreement will boost Alberta’s GDP by 0.0034% a year.
Finally, the announcement stated that the agreement would mean “reliable, well-paying jobs for hundreds of hard-working Albertans”. What it doesn’t state is how many of those are new jobs. After all, how many of these hundreds of jobs already existed?
Prior to signing the agreement, Crowsnest Forest Products was already extracting timber from forests with C%. In fact, as of June 2020, their allowable cut was 92,613 cubic metres of timber annually.
There was no word on how those amounts will change under the new agreement.
That timber quota, however, expired just this past April. During the 4.2 years the quota ran for, they were allowed potentially a total harvest of just under 390,000 cubic metres of forest timber.
So, if they’ve been extracting forest timber in the area all this time anyhow (at least until this past April), then how many of these “hundreds of jobs” will be new ones?
If you made it this far, check out my story from last week on the forestry industry over the last 30 years in Alberta.