Essays on the economics of British Columbian timber policy

This thesis examines the process of institutional change in British Columbia’s timber sector. It is composed of a series of essays which highlight the underlying political and economic factors that have shaped past and current reforms. Taking center stage in the analysis, are the resource rents available from the publicly owned forest estate and how different policies embedded in the timber tenure system captures and distributes this rent. Lying at the heart of the disputed softwood lumber trade between the United States and Canada has been the different property rights regimes governing commercial forestry in the two countries and the administration of stumpage fees, aimed at collecting rents from tenure holders. Furthermore, through a variety of mechanisms in the tenure system, these rents have been used to steer rural economic development. To make the system more transparent to the United States and adaptable to changing global market conditions a Forestry Revitalization plan was crafted and implemented in 2003. The plan involved using auctions to allocate and price timber but also gave the timber industry greater flexibility in organizing their production throughout space and time. Results suggest that the reforms enhanced the rent available from the forest resource but also re-distributed these rents, causing both winners and losers. In general, capital and labor employed in the rural forest sector have lost at the expense of the landowner, the provincial government. Additionally, the rent gradient over this forestland appears to explain the development of property rights in the province