The Province is providing a $1-million lift to the Forestry Service Providers Compensation Fund to protect eligible forestry contractors and service providers in the event of licensee insolvency.
The one-time grant was announced today by Minister of Forests, Lands and Natural Resource Operations Steve Thomson at the Interior Logging Association’s 58th annual conference and trade show in Vernon. The grant will enhance the $5-million provincial seed money that established the fund in summer 2012, along with the additional $1-million provincial grant that was already made in 2015.
Half of the new funding will be allocated to the general fund, while the other $500,000 will be allocated to a new sub-account that will be available to the silviculture contracting sector whose activities make a permanent and non-reversible improvement to Crown land. Further work is required to define the specific silviculture services eligible for compensation, along with amendments to the Forestry Service Providers Compensation Regulation and Forestry Service Providers Compensation Fund Administrative Agreement. The Province will work with the Western Silvicultural Contractors’ Association to determine silviculture service eligibility, with anticipated regulation recommendations to be completed in fall 2016.
The Forestry Service Providers Compensation Fund was established to give relief to eligible forestry contractors that were not paid for forestry service that they provided because the licensee that received the services became insolvent. It is administered by an arm’s length authority, who is guided by a five-member advisory board, consisting of representatives from:
- Coastal logging contractors
- Interior logging contractors
- Major coastal licensees
- Major Interior licensees
- The Ministry of Forests, Lands and Natural Resource Operations
- The Forestry Service Providers Protection Act was passed in spring 2010 to protect the financial interests of timber harvesting contractors who have provided logging and related services to licensees. It includes two components: a lien and a compensation fund.
- The compensation fund was established in summer 2012, with the provincial government contributing $5 million and appointing a fund manager.
- In March 2015, the Province of British Columbia made a grant of $1 million to the compensation fund.
- As of March 31, 2016, the fund has provided $484,742 in distributions related to three small insolvencies since inception and, with the 2016 grant, approximately $7 million remains available.
- Examples of silviculture contractors who make permanent and non-reversible improvements to Crown land include contractors that plant trees, space, brush and perform site preparation.