Tens of thousands of Canadian forest owners conduct forest management activities every year. Private forests represent only 6% of Canadian forests but generate one tenth of the volume of wood harvested across the country.
Forest owners can actively join in the fight against climate change by managing their forests so that they can sequester more carbon. Even better, thanks to silviculture, they can improve forest stands so they can meet the needs of the forest industry. Lastly, harvesting wood for processing also means that carbon is stored in the finished product, while generating structural economic activity for the country's rural communities.
The Canadian government's commitment to planting two billion trees across the country constitutes progress as it should help more owners develop their woodlots. However, it is essential that allocated funding guarantee that forest stands are improved and protected.
Although the purpose of this program is to create new forest areas, that constraint could limit its application as few areas in private forests in the Maritimes and eastern Canada are ultimately conducive to reforestation. Large numbers of fallow areas in those regions have been the object of reforestation campaigns in the past.
The program should also assist in quickly returning to production forests that have been devastated by natural disasters or epidemics such as spruce budworm. When these forests die, they quickly become a source of carbon emissions. If the objective is to increase forest carbon capture, the government should then fund all silvicultural work that assists in achieving it, not just reforestation.
The planting of two billion trees is an ambitious objective, but the success of the initiative will be determined by what we can do with those forests over the longer term. This creates conditions conducive to our second recommendation, which is that the government develop a tax system that encourages silviculture.
Developing private forests provides principal and supplemental income to tens of thousands of Canadian forest owners. However, various factors, including low profitability, discourage most owners from investing in silviculture.
The current federal tax system offers little encouragement to owners to develop their woodlots because it fails to consider three factors. The first factor is the asynchronous nature of income and costs: forest management costs are incurred in the initial years, whereas income is generated decades later, when mature trees are harvested. The second factor is the uncertainty and long-term nature of profits, because the fact that the production period is spread over decades is truly unique to the forest sector. The third factor is the importance and intermittent nature of forest income: since producers do not harvest every year, that supplemental income is taxed at a higher marginal rate, thus diminishing the appeal of production.
This is why we propose that a personal silviculture savings and investment plan be created to enable woodlot owners to shelter forest income from tax to permit necessary investments in the management of their woodlots. This would encourage more Canadians to develop their woodlots, to harvest wood and to vitalize permanently the economic activity generated by the forest sector in rural areas. It would also permit the investment of harvest income in activities designed to improve the resilience and yield of forest stands. Lastly, it would help synchronize forest management expenses with income from harvesting to lower the marginal tax rate and reduce uncertainty.
Our two recommendations would enable Canadian owners to develop the silvicultural potential of their woodlots to its fullest extent and help the Canadian government reach its greenhouse gas emissions reduction targets. They would also help the Canadian forest industry guarantee a long-term supply of wood from private forests and the forest sector to contribute to Canada's economic recovery.