YEAR IN REVIEW

Sustainable management of our forests continued to head the list of priorities for Canada in 2004-2005. The effects of climate change, carbon accounting and greenhouse gas reduction figured strongly in research and technology. Consultation and cooperation are flourishing. Across the country, forest managers, industries, governments, researchers and environmentalists are working together to balance environmental, economic and cultural interests. Aboriginal people are participating in forest industries, collaborating in forest management and lending expertise. Governments, industry and researchers are fighting to reduce the risks of insects and fires and to salvage damaged trees. Many provinces this year added to their conservation areas, and more at-risk species were protected. Educational efforts on good forest management continued, and Canada worked with other countries to promote forest products.

Forest Management

During 2004-2005, several provinces directed their efforts towards forest management to foster the social, environmental and economic well-being of Canadians.

We begin our review in the west. Saskatchewan completed a new land use plan for its northeast area in April 2004. The Amisk-Atik Land Use Plan will provide direction for anticipated forestry developments on the area's land and resources. The plan will be reviewed annually and updated every five years to meet the changing needs of the area.

Our Sustainable Future was released by the Ontario Ministry of Natural Resources in June 2004. This new strategic directions document will help guide the Ministry of Natural Resources and ensure sustainable development of natural resources and economic prosperity, especially in northern Ontario. It will also strengthen commitment to conserving biodiversity and green space with special emphasis on southern Ontario. The document establishes a dual focus, supporting sustainable resource development and maintaining a strong emphasis on protect ing the natural environment. This focus will be supported through stronger policy development and enhanced science, information, assessment and reporting.

Also in June 2004, the Ontario Ministry of Natural Resources released the Forest Management Planning Manual (2004). This updated and revised manual provides direction for all aspects of forest management plans scheduled for renewal after March 2007; this applies to management units designated under the Crown Forest Sustainability Act.

The Province of Ontario released its new Provincial Wood Supply Strategy in June 2004. The strategy identifies critical wood supply issues and provides recommendations for addressing them. Its aim is to sustain a continuous, predictable, long-term wood supply necessary for industrial processing facilities and to increase the level of long-term available wood supply.

The Commission for the Study of Public Forest Management in Quebec released its report on December 14, 2004. The report, based on numerous public consultations and including technical reports and assessments by consultants, contains 81 recommendations. The Commission's priorities include a focus on ecosystem-based management and the completion of the protected areas network; the method of evaluating the availability of timber for harvest; more highly targeted silviculture; diversification of the wood processing industry; and integrated, supervised, decentralized and transparent management. The Coulombe Commission, as it is known, has recommended that Quebec adopt management plans for 2008 in keeping with the new management and land use directions. The Quebec government has appointed an associate deputy minister to implement the recommendations of the commission.

On March 22, 2005, the Quebec National Assembly adopted Bill 71. In response to the recommendations of the Coulombe Commission, the bill postpones the effective date of the next general forest management plans to April 1, 2008. It also reduces the allowable softwood cut for the next three years by 20 percent. For the area covered by chapter 3 of the Paix des Braves agreement, a 25 percent reduction is mandated.

During 2004-2005, New Brunswickers have continued their discussion and debate about forest policy. In June 2004, the New Brunswick government released the Forest Management Manual for New Brunswick Crown Land (interim manual). The Minister has also formally established a Senior Forest Steering Committee, composed of senior department and industry members.

Forest Information

Governments and organizations were busy implementing initiatives and communicating information to help achieve sustainable forest management.

The Foothills Model Forest Grizzly Bear Research Program completed its first five-year phase of research. The final report for the first phase was published in 2004. The study looks at grizzly bear habits, health and movements—information that is helping companies identify where to operate within their tenure areas. The findings led to the development of important new management tools such as utilizing remote sensing in the creation of grizzly bear habitat maps for large-scale landscape areas in Alberta.

As there are 450 000 private woodland owners in Canada that collectively manage approximately 20 million hectares of land, the Canadian Model Forest Network (CMFN) continues to recognize the importance of this group to sustainable forest management. In September 2004, the CMFN published Private Woodland Owners—Meeting the Stewardship Challenge. The publication highlights woodlot-owner contributions to stewardship across Canada and provides background information for further discussion within the woodlot community on current and future challenges.

Forest 2020 Plantation Demonstration and Assessment is part of the federal government's Climate Change Plan for Canada. Through this initiative, a network of plantation demonstration sites has been established across Canada. These are designed to improve plantation information and demonstrate the contribution from fast-growing trees to achieving our Kyoto Protocol greenhouse-gas-emission reduction targets. During the spring and fall of 2004, over 3 000 hectares were planted with fast-growing species (such as hybrid poplar, larch, red pine, Norway spruce). These trees remove carbon dioxide from the atmosphere and store it for many years. Over the past year, a wide range of new information was collected, which will help researchers determine the potential economic and carbon benefits from such plantations. A national economic model has been developed and was used in 2004 to do a nation-wide assessment of the cost and benefits of fast-growing plantations on private lands in Canada. These research results will help Canada evaluate whether to invest in fast-growing plantations for carbon and other benefits, and how best to encourage investment by the private sector.

In July 2004, the National Roundtable on Environment and the Economy (NRTEE) released Boreal Canada: State of the Ecosystem, State of Industry, Emerging Issues and Projections. This background paper, prepared by Global Forest Watch Canada, describes the state of the boreal ecosystem, including key aspects of its ecology, key threats, and its state of health. It also discusses emerging issues, the relative importance of industry, and future projections. Findings of the paper are being incorporated into an upcoming State of the Debate report by the NRTEE on "Securing Canada's Natural Capital in the Boreal Forest," due to be released in the fall of 2005.

International Forest Resources released Global Environmental Forest Policies: Canada as a Constant Case Comparison of Select Forest Practice Regulations on July 16, 2004. The Forest Products Association of Canada and the BC Market Outreach Network commissioned Yale University Professor Ben Cashore to undertake an independent comparison of forest policies in 20 countries around the world. The study emphasizes the importance of further systematic analysis and monitoring of policy implementation, as well as the need for measuring the effectiveness of policies in preventing environmental deterioration.

A Cut Above: A Look at Alternatives to Clearcutting in Canada's Boreal Forest was released in February 2005. The report, authored by a forestry professor of the University of Winnipeg and others on behalf of the Wildlands League (a chapter of the Canadian Parks and Wilderness Society), explores ways in which alternatives to traditional clearcut harvesting can support wildlife conservation goals in the boreal forest.

Building on its effort to convene a diverse group of companies, Aboriginal peoples and conservationists to find boreal conservation solutions, the Canadian Boreal Initiative released The Boreal in the Balance: Securing the Future of Canada's Boreal Region on January 31, 2005. The report examines the status of boreal conservation activities related to land use planning, Aboriginal rights, protected areas, sustainable development and research.

Where Land and Waters Meet: An Assessment of Canada's Riparian Forest Management Standards, a Global Forest Watch Canada report, was released in July 2004. This report looks at a vast array of differing standards and policy instruments for the conservation and management of Canada's riparian forests.

In November 2004, BIOTECanada launched BioPortal (http://www.biotech.ca), a federal web site that offers government information on biotechnology. The web site contains the latest biotechnology research, activities, strategies, policies and regulations.

The Province of British Columbia released its first State of British Columbia's Forests—2004 on March 10, 2005. The report's content includes statistical information on six indicators of sustainability with an emphasis on issues particularly important to the province. Subsequent editions are expected to cover the full framework of 24 indicators and provide updates on previously presented indicators.

In New Brunswick, the all-party legislative committee on wood supply tabled its report in September 2004. Their 25 recommendations fell within four categories: governance and accountability, forest management objectives, allocation of resources and distribution of benefits, and provincial wood supply. The government has solicited opinion from significant stakeholders, other relevant departments, and staff members, and its response is expected early in the next fiscal year.

In the summer of 2004, the Public Forest Council undertook a series of province-wide consultations with Prince Edward Island's Ground Hemlock harvesting and processing industries and with Island landowners, to investigate allegations of trespass, theft and unsustainable harvest practice. Council found these allegations to be based in fact and presented a number of recommendations to government on how to address these issues. Government accepted these recommendations and formed a task force to implement them in 2005.

The Province of Prince Edward Island released its "Forest Policy Discussion Paper" to the public on December 3, 2004. The purpose of this paper is to stimulate public discussion on forest policy for Prince Edward Island. Six critical issues, which have emerged from a review of existing documents, comments and recommendations, are highlighted. The consultation process was completed in spring 2005.

Partnerships and Collaboration

In 2004-2005, stakeholder relationships were important to harness the collective capabilities and expertise to enhance Canada's forest sector.

On September 16, 2004, British Columbia and Yukon signed a letter of understanding towards an exchange of forest resources to foster economic development and cooperation. This agreement gives B.C. access to high-quality timber just across the Yukon border while Yukon has access to timber from northern B.C. The exchange also serves to develop opportunities in the forest industry for Kaska First Nations.

In 2004, Manitoba Conservation identified a potential hardwood-based opportunity for the Interlake and southeastern regions of Manitoba. As of March 2005, a Request for Proposals was released to identify companies interested in partnering with First Nations Limited Partnership (FNLP) on a hardwood-based development. Proposals are due at the end of May. FNLP has been meeting regularly with communities to discuss the progress of this project over the past year.

On November 17, 2004, Ontario announced its membership in the Forintek Canada Corp. partnership. Ontario will draw on Forintek's expertise to further its assessment of value-added wood product, bio-energy and bio-product opportunities. Ontario will also benefit from Forintek's ongoing research and technical advice in the wood products sector.

In 2004-2005, in line with Quebec government policy in the area of local and regional development, the province's Department of Natural Resources and Wildlife transferred full responsibility for the management of Part II of the Forest Resources Development Program to the regions. The objective of Part II is to fund activities that contribute to the protection and development of forest resources. The regions have broad latitude to establish acceptance criteria and select projects in keeping with regional development priorities and with the general objectives set out by the Minister.

New Brunswick's Minister of Natural Resources sought advice on several fronts with the aim of improving forest activities within the province. In one initiative, department staff facilitated dialogue between the private producers, represented by the New Brunswick Federation of Woodlot Owners, and the New Brunswick Forest Products Association. Discussion focused on issues related to the flow and supply of private wood to the mills and the sustainability of private woodlots. Unfortunately, mutually acceptable recommendations were not arrived at. Dialogue will continue in anticipation of a suitable solution.

Follow-up continued in New Brunswick in 2005 on the assessment of licensees' management planning processes conducted in 2004 for the New Brunswick Forest Products Association. The department and licensees continued efforts to identify standardized approaches that will ensure greater consistency between licensees, thus providing a common basis for evaluating forest productivity. Licensees and department staff also continued joint efforts in relation to objective-setting and data preparedness for the development of the 2007-2012 management plans. The release of the Forest Vision for this next planning period was delayed from its December 2004 date pending the government's response to the Select Committee on Wood Supply report. The 2007-2012 Vision was released in spring 2005.

On June 3, 2004, Nova Scotia's Department of Natural Resources entered into a partnership agreement with Forintek Canada Corp. to have them provide technical advice to the wood product manufacturing industry in the province. This will enable the wood industry to receive the most current information on new technology and innovations.

On February 14, 2005, the government of Prince Edward Island announced its intention to enter into an agreement with the Environmental Coalition of Prince Edward Island to manage 800 hectares of public forest land. This pilot project is intended to assess new ways of managing public lands and enhance the involvement of these lands in community development.

Innovation

The forest sector continued to focus on innovation and new technology development to remain competitive and to meet the evolving expectations of forest stewardship.

The Canadian Model Forest Network and the Canadian Forest Service have joined forces to support the forest management community in assessing the contribution of forest management activities to the reduction of greenhouse gas concentrations in the atmosphere. Over 2004-2005, the two groups worked together to test an operational-scale carbon budget model (CBM-CFS3) that can be used by forest analysts to estimate forest carbon stocks and carbon stock changes, as well as assess the impact that forest operations have on forest carbon stocks. Model training workshops were held across the country and more are planned for the future. A beta version of the model is currently available for training and testing; public release of the model is planned for the fall of 2005.

On February 22, 2005, the Pulp and Paper Research Institute of Canada signed a three-year collaborative agreement with NanoQuébec. The two organizations will collaborate in the development of nanotechnology applications in the forestry sector. This technology could transform all aspects of the forest products industry, from production of raw materials to new applications for composite and paper products.

In May 2004, Forintek Canada Corp. signed an agreement with Linnet - The Land Systems Company^® for the distribution of their new Drylog^TM Moisture Model technology. The Model, a product of three years of research at Forintek, is a tool used to predict wood moisture levels and will assist in determining the best storage time for logs. This computer program will benefit the producers of high-value engineered wood products such as oriented strandboard (OSB).

The Forest Engineering Research Institute of Canada (FERIC) and FOR@C (Université Laval) have developed a Virtual Transport Manager (VTM) system, a practical way to manage vehicle dispatch on a regional basis using Internet technologies. The model construction was completed in 2004; the development phase and technology transfer are scheduled for completion over the next three years. The VTM will help reduce transportation costs by better route scheduling and vehicle utilization and will also help reduce greenhouse gas emissions.

On March 24, 2005, the government of Alberta announced a three-year,
$33-million Innovation Program. The program is intended to support the Province's Strategic Plan by encouraging innovation within the government of Alberta through innovative technologies and excellence of service. The program will support successful proposals from across the province's government organizations in the areas of energy, health, information technologies and forestry.

New Brunswick completed final touches to two systems, e-Silviculture and Nursery Seedling Inventory; both systems will become operational in the new fiscal year. The e-Silviculture, an Internet-based application, allows departmental head offices, regional offices and licensees to access silviculture data combined with geographic information. The nursery system does not have direct-user access, but provides significant improvements in managing crop information, including seed source, stock age, growth and client destination.

Research

In 2004-2005, Canada invested in research that will help make this country a world leader in forestry.

On December 15, 2004, the Government of Canada announced the funding of two new Industrial Research Chairs in the Department of Chemistry at McGill University through a partnership with the Pulp and Paper Research Institute of Canada. The research aims to improve the papermaking process in order to enhance the competitiveness of the pulp and paper industry and reduce its environmental impact. The first new Chair, held by Dr. Theo van de Ven, will focus on the chemistry of paper while it is being formed and still wet; the other Chair, held by Dr. Derek Gray, will focus on the properties and uses of wood pulp fibres.

On November 2, 2004, the Government of Canada announced its financial support for the establishment of the first Canada Research Chair at Algoma University College in Sault Ste. Marie, Ontario. The Chair, held by Dr. Jenny Cory, will focus its research on pest control in forestry and agriculture in Canada and worldwide.

An NSERC-Université Laval Industrial Research Chair in silviculture and wildlife was launched on March 17, 2005. The purpose of the research Chair, held by
Jean-Claude Ruel, is to develop silviculture systems adapted to the characteristics of the boreal forest, which consists of uneven-aged stands. The research will be carried out in Quebec's North Shore region.

The Industrial Chair on Engineered Wood Products for Structural and Appearance Applications was officially announced on November 26, 2004. The objective of the Chair, which is held by Dr. Robert Beauregard and affiliated with Université Laval's Department of Wood and Forest Science, is to improve the competitiveness of the wood products industry through the development of innovative products, manufacturing processes and business models.

Environment

Governments, associations, organizations and industry—recognizing the importance of the environment—contributed to the safeguarding of Canada's forests in various ways.

Canada is developing a National Forest Carbon Monitoring, Accounting and Reporting System (NFCMARS) to assess and report carbon stocks and stock changes in forests across the country. The system integrates forest information such as forest inventories, growth and yield, land use change, and disturbance statistics from various sources into a modelling framework, using the Carbon Budget Model of the Canadian Forest Sector (CBM-CFS). By bringing together the best available information and scientific understanding of the ecological processes involved in forest carbon cycling, NFCMARS is being used to improve our understanding of the role of Canada's forests in the global carbon cycle, and will also be used to address the forest reporting requirements of the Kyoto Protocol and the United Nations Framework Convention on Climate Change.

On February 7, 2005, the Forest Products Association of Canada and Environment Canada announced the establishment of the Pulp and Paper Air Quality Forum. The Forum is composed of a group of key decision makers from industry, federal and provincial governments, non-governmental organizations, Aboriginal peoples and environmental communities. The purpose of the Forum is to collectively design and recommend a proactive, innovative 10-year plan for the management of pulp and paper emissions.

From 2003 to 2005 the Tree Canada Foundation, under its Grow Clean Air program, planted over 20 000 trees; this included plantings for three companies and nine conferences in 2004-2005 alone. The program was established to offset the carbon dioxide emissions produced by companies and organizations and during conferences through the planting of trees (afforestation), since trees absorb carbon. Using the calculator in the climate change program (http://www.growcleanair.ca/calculator), the Foundation is able to calculate the number of trees needed to offset the amount of carbon generated (through travel, heating, lights, etc.).

The government of British Columbia introduced "Standards for Seed Use" to protect the province's tree gene resources. As of April 1, 2005, the standards apply to anyone planting trees in order to establish a free-growing stand under the Forest and Range Practices Act.

In August 2004, Alberta amended Weyerhaeuser's Grande Prairie Forest Management Agreement (FMA) to allow C&C Wood Products of Quesnel, B.C., to proceed with the purchase of Weyerhaeuser's Grande Cache plant. The amendment included removing one of the forest management units from Weyerhaeuser's FMA and reducing the available annual allowable cut in the area assigned to C&C Wood Products to allow for greater consideration of wildlife management strategies.

Approximately 3.5 million new trees were added to Saskatchewan's northern forests in spring 2004. The planting is part of the province's Department of Environment reforestation projects. An additional 15.3 million seedlings were planted through the forest companies' reforestation programs.

In Nova Scotia, the Voluntary Planning Board—an organization that enables the province's residents to provide advice directly to senior government officials—released the Final Report of the Voluntary Planning Off-highway Vehicle Task Force on November 2, 2004. Since spring 2003, a team of volunteers knowledgeable on the central issues have conducted inclusive and extensive public consultations. The report makes 39 recommendations, which focus on enforcement, infrastructure, safety, protection of property, appropriate designation of trails, and uniform standards for off-highway vehicles in Nova Scotia. One of the recommendations is that protected wilderness areas and sensitive ecosystems be off limits to off-highway vehicles to avoid the damage caused by these machines.

Conservation and Protection

Most provinces pursued their commitment to conserving and protecting natural areas across the landscape to help maintain biodiversity.

The government of Yukon officially established the Tombstone Territorial Park on October 25, 2004. An overall management plan for the park is now being planned.

The Province of Saskatchewan protected 32 500 hectares within the boreal plain ecozone and 35 382 hectares of land near the town of Hudson Bay in 2004. These lands were added to the Representative Areas Network, increasing it to 9 percent of the province's land and water base. The province is committed to protecting 12 percent of its land as part of the network.

The government of Saskatchewan released its Biodiversity Action Plan in May 2004. This five-year action plan will guide the conservation actions of all government sectors until the end of 2009. The plan complements the Canadian Biodiversity Strategy. An agreement to help conserve the province's biodiversity was signed on February 18, 2005, between Saskatchewan Environment and the Saskatchewan Wildlife Federation. This five-year "Habitat Securement Agreement" will ensure that natural ecosystems and native habitat are secure.

In November 2004, the government of Manitoba designated an additional rare river-bottom forest in the Red River Valley as the province's 18^th ecological reserve. This new reserve became a protected site within the network of protected areas in Manitoba. The site is unique in that its many plant species must possess a tolerance of this flood-prone environment in order to survive.

On December 3, 2004, the government of Manitoba announced the formation of a new provincial park. The Manigotagan Provincial Park will ensure that the Manigotagan River's water quality; natural splendour and cultural and recreational values will be preserved for generations to come. Furthermore, the new park will recognize and respect treaty rights and the goals and values of regional communities.

The Ontario government launched a major review of its legislation governing provincial parks, conservation reserves and wilderness areas in September 2004. Ontario has 316 parks, 249 conservation reserves and 10 wilderness areas. The province's system of parks and protected areas welcomes more than 10 million visitors a year from within Ontario and around the world.

In April 2004 the Ontario government added protection for four more species at risk. The four newly regulated plant species are the Western Silvery Aster, False Hop Sedge, Skinner's Agalinis and Virginia Goat's-rue. These plant species are found in only 11 known locations in Ontario, and are at risk of extinction. With the addition of these four, 40 plant and animal species are now regulated under Ontario's Endangered Species Act. The act prohibits harming of regulated species or their habitats.

In May 2004 the Ontario government protected the Eastern Wolf by banning the hunting, trapping and chasing of wolves and coyotes in and around Algonquin Provincial Park. The park is the largest protected area for the Eastern Wolf in North America. In March 2005 Ontario also introduced a new closed season for hunting and trapping wolves in central and northern Ontario.

In February 2005 the government of Ontario passed the Greenbelt Act 2005, which will permanently protect more than 400 000 hectares in the Golden Horseshoe area of southern Ontario. The newly protected area will be added to the protected areas of the Oak Ridges Moraine and the Niagara Escarpment to form a 730 000­hectare greenbelt area of environmentally sensitive and agricultural land.

In April 2004, the Province of Ontario transferred 1 432 hectares of Crown land to Rouge Park in Toronto. With this expansion, the park becomes the largest natural park in an urban area in North America.

The Ontario government announced in December 2004 that it will help protect Ontario's natural heritage through stronger property tax relief for landowners and conservation groups. The government is encouraging conservation by enhancing two programs, the Conservation Land Tax Incentive Program and the Managed Forest Tax Incentive Program.

In June 2004, the Quebec government announced the creation of eight new protected areas that are now off limits to all forestry, mining and energy development. In all, 5.4 percent of the total area of Quebec is now set aside as protected areas.

The Quebec Minister of Natural Resources and Wildlife announced 11 new public forest resources protection and development objectives that will be integrated into the next general forest management plans. The objectives are legal and contractual obligations. They will contribute to biodiversity conservation and soil, water and landscape protection and will help to ensure that the needs and values expressed by communities and users of forests are taken into account.

In 2004-2005, the government of Nova Scotia protected more wilderness areas. These areas can now be used for research and recreation activities. As of March 2005, Nova Scotia has 33 wilderness areas, totalling more than 294 000 hectares, under the Wilderness Areas Protection Act.

Certification

Efforts continued towards achieving consensus on forest management practices.

In December 2004, the Forest Products Association of Canada announced that member companies are seeking Environmental Choice^M Program or EcoLogo^M certification for their cogeneration (combined heat and power generation) sites that use biomass (renewable energy derived from products such as bark, wood shavings, sawdust and spent pulping liquor). EcoLogo certification is a comprehensive national program sponsored by Environment Canada to recognize manufacturers and suppliers that produce products and services that are more environmentally responsible.

The British Columbia Forest Safety Council and the Workers' Compensation Board implemented the BC Faller Training Standard and Certification Program in fall 2004 to improve safety in the forests. The program will include mandatory testing and will require a skills demonstration by experienced fallers. Fallers must be certified by July 31, 2005.

The Province of Ontario is moving to require that all forest industry Sustainable Forest Licence holders be certified to an accepted performance standard by the end of 2007. A Sustainable Forest Licence allows the holder to engage in forest man agement in the province. Licence holders are required to carry out a range of activities necessary to ensure the sustainability of the Crown forests in the licence area. The government's intent in requiring certification is to help ensure the Ontario forest industry is given preference in export markets, and to contribute to a more innovative and thriving economy.

Outreach

Activities involving the general public were organized to increase awareness and understanding of the forests.

Girl Guides of Canada, Scouts Canada and the Canadian Model Forest Network have partnered to design a Model Forest Challenge Crest that Guides and Scouts may earn. There are two versions of the Model Forest Challenge, the junior version and the senior. The purpose of this challenge is to learn about sustainable forest management and the work being done in this area by the Canadian Model Forest Network.

In 2004, the Manitoba Model Forest's Eastern Region Woodland Caribou Advisory Committee released its new educational video, Shadows of the Forest: Managing Woodland Caribou. The 25-minute video tells the story of Manitoba's Woodland Caribou, a threatened species, and the work being done to understand and protect their habitat. In addition to discussing some of the factors that make it a species at risk, the video reviews Manitoba Model Forest research activities, including state-of-the-art tracking and computer mapping undertaken by the Eastern Region Woodland Caribou Advisory Committee.

In May 2004, Tembec signed a three-year agreement with the Tree Canada Foundation to create the Tembec Green Schoolyard Program. Selected schools across Canada will benefit by having trees and shrubs planted for carbon sequestration, environmental and educational purposes. In November 2004, the Tree Canada Foundation launched a newly redesigned Green Streets Canada Program to encourage innovative practices and policies in urban forest management.

ForestLeadership, a new initiative aimed at developing leadership to promote sustainable forestry, was announced in April 2004. The organization will focus on conferences, professional training, forward-looking information tools, annual awards and career development. It will work towards engaging key sustainable forestry groups. ForestLeadership held its first conference in March 2005.

Aboriginal Involvement

Initiatives were put in place throughout the year to improve the economic and social well-being of Aboriginal people.

In January 2005, the Government of Canada announced its economic support for the Chipewyan Prairie and Heart Lake First Nations of northeastern Alberta to participate in the forestry industry. Janvier/Heart Lake Forestry Inc., a joint partnership of the Chipewyan Prairie and Heart Lakes First Nations, was formed and entered into a five-year harvesting agreement for Alberta-Pacific Forest Industries Inc.

As part of Phase III of Canada's Model Forest Program, the Special Project Areas initiative will transfer knowledge and technology from Model Forests to three new Special Project Areas, which have joined the Canadian Model Forest Network (CMFN). The Western Newfoundland Model Forest facilitated the development of a Special Project Area involving the Innu Nation of Labrador and the government of Newfoundland and Labrador. Labrador's forests have been home to the Innu people for thousands of years; the Innu are now actively involved in a unique partnership with the province to provide direction for the Strategic Forest Management Plan for District 19, a 2.27 million hectare area in Labrador. Their three-year project is to develop a site classification manual for Labrador/Nitassinan that incorporates biophysical knowledge, such as information on soils, key plant indicators and successional patterns, with traditional and cultural Innu values.

Reallocation of long-term replaceable logging rights held by major licensees to First Nations, woodlots, community forests and new entrepreneurs continued in 2004-2005 in British Columbia. Since September 2002, government has signed agreements with 85 First Nations, providing a total of almost $85 million and 13 million cubic metres of timber over the terms of the agreements.

A memorandum of understanding was signed on April 22, 2004, between the Province of Manitoba and eight First Nations located within the East Side of Lake Winnipeg. This agreement will ensure the participation of First Nations people from the east side in land use decisions affecting their communities and traditional territories.

The East Side Planning Initiative presented its status report, Promises to Keep, on the development of a Broad Area Plan for the east side of Lake Winnipeg to Manitoba's Minister of Conservation on November 16, 2004. The objective of the east side planning process is to bring together local communities, First Nations, industry and environmental organizations to develop a vision for land and resource use in the area that respects both the value of the boreal forest and the needs of local communities. The report provides 102 recommendations on matters of importance to the residents of the east side of Lake Winnipeg. To address some of these recommendations, the government of Manitoba established the East Side First Nations Council.

The Manitoba Forestry Branch held discussions with the Swampy Cree Tribal Council in the fall of 2004 regarding a partnership in a field sampling program to assess timber volume. The program, which started in October 2004, is linked to the provincial mandate of increasing First Nations' involvement in forestry in the province of Manitoba.

On September 27, 2004, the New Brunswick Aboriginal Forestry Initiative was approved for funding through the Aboriginal Skills and Employment Partnership program. The five-year program was launched in October 2003 to create sustainable employment for Aboriginal people in major economic initiatives such as forestry.

The government of Newfoundland and Labrador and the Labrador Métis Nation (LMN) have entered into an agreement that defines how the LMN will participate in forest ecosystem management planning in Labrador. The two-year agreement, which runs from April 1, 2004, to March 31, 2006, formally defines the role of the LMN in the management and future development of Labrador's forest resource. The LMN will create management plans in partnership with other forest stakeholders to address such issues as the conservation of wildlife, the natural environment, culture and tradition.

International Activities

Canada continued its involvement with international activities to enhance cooperation and coordination on forest issues as well as to increase market access.

The International Model Forest Network launched Europe's first model forest on September 1, 2004. The Vilhelmina Model Forest is situated in northern Sweden's Västerbotten county and covers 120 000 hectares. Its main objective will be sustainable forestry development and the conservation of biological diversity.

In March 2005, the McGregor Model Forest received funding from the Canadian International Development Agency and the Russian government to continue its work in the Russian Far East state of Khabarovsk. This collaborative project brings together the model forest staff and partners at the College of New Caledonia (CNC) and the University of Northern British Columbia (UNBC). Model Forest staff will provide project management and administration. Instructors from CNC will train key state-level teachers in the technology of wood-frame building construction and entrepreneurial development. Instructors from UNBC will provide training in local governance.

During the summer of 2004, the Chinese Ministry of Construction released its "Chinese Timber Structural Design Building Code" (GB5005). A chapter on North American-style wood-frame construction is featured in the document. Implementation of this national code will allow the construction of North American wood-frame houses using Canadian products, grading rules and design properties. Canada Wood and the Shanghai Municipal Government signed a memorandum of understand ing in January 2005 aimed at developing local Shanghai building codes. These codes will draw from the national code and will strive to create standards and guidelines for using wood-frame construction techniques targeted at low-rise, multi-use buildings in Shanghai, China's fastest-growing market.

British Columbia's Dream Home China demonstration centre was officially opened on January 25, 2005. Situated in Shanghai, China, the centre will showcase B.C. forest products and wood-frame construction for Chinese consumers, developers, architects, builders and government officials and will also serve as an office for B.C. forest associations operating in China. The five-year project (announced in April 2003) is a partnership between the government of B.C. and the B.C. forest industry.

Natural Disturbances

The country pursued its commitment to help develop prevention, detection, response and management systems to address natural disturbances.

An Invasive Alien Species Strategy for Canada was approved and released in September 2004. The Strategy represents the collective efforts of several federal government departments and agencies as well as numerous provinces. It seeks to establish a framework that minimizes the risk of invasive alien species to the economy, environment and society. Three action plans were developed, focusing on prevention, detection, response and management: 1) Aquatic Invasive Species, 2) Terrestrial Invasive Plant and Plant Pests, and 3) Terrestrial Invasive Animals and Wildlife Diseases.

The federal government's Mountain Pine Beetle Initiative (MPBI) is a six-year, $40­million package of programs administered by Natural Resources Canada. The Initiative objectives are to reduce the impacts of the current mountain pine beetle epidemic and to reduce the risk of future outbreaks. To date the cost-shared private forest-lands program has provided assistance to 124 forest-land owners. In British Columbia and Alberta, 57 First Nations bands have received financial and technical assistance to control, manage and rehabilitate infested forest lands. Besides the ongoing threat to forests in B.C., the beetle is a threat to pine forests in Alberta and the boreal. MPBI research under way is focused on detection, mapping, outbreak prediction, post-beetle regeneration, reducing infestation risk, and the impacts on communities, forest ecology and established markets. Details are available at the Initiative web site: http://mpb.cfs.nrcan.gc.ca/index_e.html

In the Yukon, 2004 was a record-breaking year for forest fires, which burned 1.82 million hectares of forest, almost 60 percent of the Canadian total. Subsequently, the Yukon government initiated an independent review of the 2004 wildland fire season. The review team examined the nature of wildland fires in Yukon, the management of the territory's fires and the 2004 season in particular. The final report was presented to the government in spring 2005.

In April 2004, the British Columbia government updated its mountain pine beetle action plan and announced the creation of a two-year Bark Beetle Task Force to oversee the implementation of the plan. An advisory group will represent communities, First Nations, forest industry, the scientific community and the federal government. One of the goals of the action plan is creating new markets for beetle-damaged wood (e.g., developing tenure opportunities). The introduction in October 2004 of Bill 65 will also help to salvage the beetle wood: the B.C. government is now able to specify an area of Crown land as a mountain pine beetle salvage area, and specify requirements under a forest licence competitively sold within the salvage area.

The implementation of the recommendations from the Filmon Fire Review began in British Columbia in 2004. Cranbrook and Logan Lake were selected as pilot projects for interface management to protect people and property from the threat of wildfire. Five new unit crews were put in place, as well as two more air tankers.

On March 18, 2005, the governments of Alberta and British Columbia signed an agreement to share the work and costs of fighting the spread of mountain pine beetle threatening both provinces. The first action under the agreement involves the cutting and burning of infested trees in the Peace Forest District of B.C.

In December 2004, the government of Nova Scotia put forward an enhanced wood salvage program for landowners within the Brown Spruce Longhorn Beetle restricted zone. The program is meant to salvage areas where damage is most extensive and reduce public safety risks while supporting efforts to contain and eradicate the beetle.

Economic Issues

During 2004-2005, Canada established mechanisms to encourage sustainable economic development opportunities in the forest industry.

Canada continues its efforts to find a resolution to the softwood lumber dispute. In December 2004, as a result of the first annual review of the countervailing and anti-dumping duties, the United States reduced the combined duty rate by more than 7 percent. Between May and December 2004, the U.S. had collected combined duties of 27.22 percent on softwood lumber; currently, Canadian softwood lumber exports are subject to duties of 20.15 percent. It is estimated that Canada's cash deposits total approximately C$4.6 billion. Canada remains committed to a two-track strategy for resolving the dispute: litigation, and negotiations towards a long-term, policy-based solution. While Canada has been largely successful in its legal challenges and NAFTA and WTO panels have repeatedly ruled that the U.S. duties are unjustified, the United States has not complied with panel decisions. The U.S. has requested establishment of an Extraordinary Challenge Committee (ECC) to review the actions of the NAFTA injury panel.

Funding for the Northern Forest Diversification Centre in Manitoba has been confirmed for three years. The Centre will continue its work to link the growing demand for non-timber forest products with the need to create sustainable economic development opportunities for residents of remote communities.

For the past 12 years, Manitoba Forestry Branch has auctioned an average of 4 000 cubic metres of timber per year. In the last two years, the timber auction process was expanded to an average of 48 000 cubic metres per year. While auction volumes may not remain as high in future years, Manitoba Forestry Branch will continue to advertise auctions throughout Manitoba.

The Ontario government established the Minister's Council on Forest Sector Competitiveness in November 2004. To help strengthen Ontario's forest industry, the 17 council members will provide recommendations to the Minister of Natural Resources on ways to secure a stronger future for the forest products industry, for workers and for northern communities.

In November 2004, the Quebec Department of Natural Resources and Wildlife announced that it will provide financial assistance to Temlam Inc. to convert the former Scierie Amos Ltée sawmill into a manufacturing plant for laminated veneer lumber, making it a world-class production facility.