Our Business

Sustainable Harvesting

Serving Local & Global Markets

Log Exports Q & A

Sustainable Harvesting

Mosaic is the timberlands manager for TimberWest and Island Timberlands, two companies that have been in operation for more than 100 years on BC’s coast.

Much of the land we manage is private managed forest land, but we also steward public tenures held by our affiliated companies.

The trees we grow on our lands support more than 50 local mills. It takes decades of significant investment and labour to manage, plan, harvest and deliver this large volume of timber. Today we employ more than 200 people directly and an additional 2,000 in our direct contractor workforce. In an average operating year, we pay more than $500 million to our local contractors – that’s more than $40 million a month to mostly family-owned businesses in small communities on Vancouver Island and other Coastal regions.

Our Trees Don’t Grow Themselves…

Mosaic is in the business of growing trees as a sustainably managed, world-class resource. Our prosperity grows on trees, but our trees don’t grow themselves. By investing in our trees – beginning with the seed they are grown from – we produce a superior end product that improves utilization, product recovery and value.

Premium Seedlings from Premium Seed

Mosaic’s Mount Newton Seed Orchard is emblematic of our company’s long-term commitment to sustainable, science-based stewardship. In its 40 years of operation, the 100-acre orchard has produced enough seed to grow 250 million seedlings.

With more than 6,000 established trees, including Douglas-fir, western red cedar, western hemlock and a newly-established western white pine grove, the orchard currently produces enough seed to grow 8 million Douglas-fir seedlings annually.

In 2020, Mosaic planted 12 million seedlings in Coastal BC.

Intensive Management to Improve Resiliency, Quality and Yield

As a private landowner, our investment in our trees and forests improves our bottom line through improved pest and drought resiliency, better fibre quality and higher yield. We employ intensive silviculture practices overseen by professional foresters, including fertilization, pruning and other stand tending treatments where appropriate. It takes many decades of care and management to take a forest on our most productive sites from seedling to ready for harvest and regeneration.

Sustainable Harvesting

Harvesting decisions are made based on market conditions. Our team of forestry and sales professionals collaborate to forecast market demand and ensure that trees are harvested and the optimal products manufactured in order to recoup a reasonable return on the 50+ years of investment we made in growing them.

Mosaic hires independent contractors to conduct the majority of our forest harvesting operations - including road building, falling, processing and hauling – supporting predominantly family-owned businesses based in small communities across BC’s Coast. Our contractor workforce employs 2,000 people in high-paying, family-supporting jobs.

Serving Local and Global Markets

After decades of investment in cultivating seed, planting, growing and tending trees, high-quality logs from Mosaic’s lands are sold to both domestic and international customers. Domestic customers have right of first offer on all Mosaic logs. We are the largest independent supplier of logs to BC manufacturing facilities, supporting more than 50 mills up and down the Coast (see map).

Mosaic has also worked hard to build a strong international customer base – and we rely on international market access to support the economic operation of our business, as the prices available on the domestic market are significantly below international prices and often below the cost of production. Access to the international market for a portion of our harvest volume provides the economic margins that allow us to supply the domestic market at lower prices.

Log exports are clearly an important component of the BC Coastal forest sector. Mosaic has advocated for more reliable access to export markets for fibre originating from our private lands, in order to provide the certainty we need to plan, forecast and conduct our business effectively. The current structure of the sector and policy framework surrounding log purchasing in the province makes log exports a critical component of the Coastal forest economy.

Log Exports
Questions & Answers

+ Why does Mosaic export logs?

It is a fact that international market prices are substantially higher than domestic market prices. Domestic pricing for logs is often below the cost of production, and the only way to supply local mills at typical domestic pricing is with some access to international markets and higher pricing. No forest company can sell production at below cost – nor should they have to.

+ Why is the export price higher than the domestic price?

Logs can only be exported if they are deemed by regulators to be surplus to domestic needs. Therefore, all logs must be offered first to domestic mills. If any mill makes an offer on the logs – and the regulators deem that offer to be “fair,” even if that offer is not accepted by Mosaic – the logs are blocked from export. This gives BC log purchasers significant leverage to control and depress domestic pricing below international market rates.

+ Why should logs be exported when there’s a shortage of fibre for domestic mills?

There is no shortage of fibre for domestic mills – in fact, there is a significant undercut in the Coastal timber supply - more than 17 million cubic metres of public lands timber on BC’s Coast went unharvested over the last 10 years.

+ Are logs exported from public land and private land?

Log exports originate from private and public lands. Since 2018, exports from public land have reduced by fifty per cent, while exports from private land have also decreased in recent years. 2020's reduction in exports was a result of Mosaic's seven-month curtailment in late 2019. International trade is a small but crucial contributor to the viability of coastal log production to support local trade in BC.  

+ Can any log be exported or are there restrictions?

For public and privately-owned timber, with the exception of logs from most Federal Indian Reserves and modern day Treaty Settlement lands, only those logs that satisfy the “surplus” test are eligible for export.

Logs subject to the surplus test must be offered to domestic mills, and if no offer is received, the logs can be exported if an export permit is subsequently approved by the Federal government. If any offer is received and deemed to be fair by the regulator, even if it is not accepted by Mosaic, the logs are not eligible for export. The fairness determination considers only the offer price and ignores alternate log supply.

+ If no log supply shortage exists and logs that are surplus can be exported, what’s the problem?

The current system which enables domestic customers’ bidding behaviour, combined with federal administration of export permits, serves to significantly depress domestic log prices, often below the cost of production. This market distortion often incents domestic integrated producers to block log exports from private lands rather than harvesting their own tenures or sourcing other harvesting rights such as under BC Timber Sales. This dynamic has been occurring at increasing levels in more recent times, reducing the harvest of public timber and resulting public revenues.

The current system is also deeply problematic in that it provides no certainty to timberland operators on the price they can expect to receive for their product that took decades to grow. Planning and forecasting is impossible when there is no certainty with respect to what proportion of product can access international market pricing, and therefore what proportion of your product mix will be sold at a profit or a loss. Additionally, significant costs are incurred throughout the long export advertising and permitting process – resulting in time delays, permit application fees and, often, re-sorting and re-handling based on the uncertain outcome of the permitting process.

+ Do other jurisdictions limit log exports?

British Columbia is the only jurisdiction in North America where log exports from private land are restricted in this way – even within Canada.

+ Why shouldn’t we support domestic manufacturing jobs with local logs?

Mosaic also produces logs from public land and accepts that government may set different log export policy for logs harvested from public land since they originate from trees that belong to the public. However, regardless of whether logs originate from public or private land, the current system depresses prices so far as to make the sector unsustainable. Government policy must change to either close the gap between domestic and international pricing, or to provide certainty of access to international market prices and support the domestic price subsidy.

+ Are there other solutions besides exporting logs?

The sawmilling and manufacturing capacity on the Coast is currently not sufficient to process the entire supply of timber from coastal public and private lands. Jobs and economic prosperity are created when timber is utilized, and that makes log exports an important and necessary component of the coastal forest sector.

+ Recent media articles have indicated log exports may become an issue in Canada’s international trade agreements. What is Mosaic’s position on this?

Actually, log exports have long been an issue with Canada’s forest products trading partners. Generally speaking, trade agreements are intended to promote more open and fair trade between signatories, and export restrictions are prohibited except in limited circumstances. Log export restrictions are a significant trade irritant for Canada with our significant trading partners.

The long-standing softwood lumber dispute is in large part predicated on the United States Government’s assertion that British Columbia’s log export policy and stumpage system represent a subsidy to the domestic sawmill industry. More recently, Japan has expressed concern regarding the Canadian Federal Government’s restriction of log exports and compliance with a side letter to the Trans-Pacific Partnership Agreement related specifically to log exports from Canada to Japan. China has also raised the issue with the Government of Canada. The U.S., China and Japan are Canada’s three top trading partners.