New Act Will Ensure Forestry Contractors Are Paid

Thursday, April 29, 2010 02:36 PM

Victoria, B.C.- The antiquated Woodworker Lien Act will be replaced with a new Forestry Service Providers Protection Act. Forests and Range Minister Pat Bell says the new legislation will strengthen payment protection for forestry contractors.

The legislation comes in the wake of a situation that developed in 2007, when Pope & Talbot declared bankruptcy. Not all logging contractors received payment for their services. The Forestry Service Providers Protection Act is designed to
prevent situations like that from happening again. The Act has two major points, one, allows a lien to be placed against the company as long as the company is solvent. The second part allows contractors to pull the payment due from a special fund. Minister of Forests and Range, Pat Bell, says the fund will be set up similar to travellers insurance.

Bell says the details are not yet finalized, "This is an enabling act, so it is difficult to say exactly how it will play out" he says discussions will take place over the next few months but he could see a medium sized company may pay into the fund something like $5 million dollars, a small company would pay $1 million or less, and a large company may be required to submit as much as $20 million dollars.

The new act enables the establishment of the Forestry Service Providers Compensation Fund and enables contributions to the fund through levies and other means. The fund will be administered arm's length from government, and forestry service providers will be able to apply to the fund for payment if the companies they provide services to declare insolvency.

Under the Act, forestry service providers are those who provide contracted services, including falling, yarding and hauling timber to owners of forest product companies. Contractors will be able to register liens under the Personal Property Security Act to ensure payment of services.

"We're pleased to see government living up to its commitment to ensure loggers are paid for the work they do," said MaryAnne Arcand, executive director, member services, Central Interior Logging Association. "This legislation and the accompanying fund put our members on a more solid footing in the event of licensee insolvency."

About 3,000 contractors provincewide are expected to benefit from the legislative changes.

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Posted on Thursday, April 29, 2010 02:36 PM in News by 250 News

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Comments

Posted by: Poppa on April 29 2010 6:13 PM

"The fund will be administered arm's length from government"

And we all know how long the government arms are these days!!!!

If this doesn't give them another source of revenue I'll be a monkey's uncle!

Posted by: Eagleone on April 29 2010 6:59 PM

This is a good idea. I'll give Pat Bell that one.

Its well over due, but I would have rather seen it addressed to the individual companies through the bankruptcy court process, as that would be more appropriate IMO.

This insurance system can be more of a wealth transfer for the successful companies to the fast and loose companies gaming the system in a death spiral that could hurt the good and solid companies as collateral through market pricing decisions effected by the 'insurance' policy they would now have as a back stop.

Cleaning up the bankruptcy process would help everyone and not just the forest companies... mines, manufacturing, telecom, service providers... ect ect they all have the same issues and its not limited to the forest sector. The bankruptcy laws were written for the banks and don't take into account at all the trade creditors, much less the employee pensions, and other claims that should have more protection through the process.

I guess if the object is to not upset the banksters, than this is a good start. We all know who the BC liberals work for after all.

Posted by: Eagleone on April 29 2010 7:06 PM

I remember the days when Doyle Trucking was the biggest bulk hauler in town... they went down when the Prince Rupert pulp mill took them on as a contractor and then never paid them a slim dime as the mill filed for bankruptcy prior to making any payments for services. Doyle Trucking essentially subsidized the pulp mills ongoing operations until the time the bankruptcy was filed, and then were left with nothing but multi million dollars debts for equipment and fuel. Collateral damage to the bankruptcy process, as much if not more than the actual mill going bankrupt to begin with.

Posted by: He spoke on April 29 2010 9:38 PM

Start chasing them at 60 days, and gotta be on top of them.

big companies go broke too.

Posted by: woodchipper on April 30 2010 12:59 AM

Why would this only apply to loggers and forest companies? Doesn't anyone or any contractor deserve the same protection, regardless of what industry?

Posted by: havemercy on April 30 2010 8:14 AM

other industries already had that kind of protection - mechanic's liens, builder's liens, etc. loggers never did.

Posted by: Windigo on May 1 2010 8:29 AM

The loggers in the over all forest down turn are the only ones who are given an opportunity to continue to work. When pulp mills and sawmills go down the operational persons who are released have to look for work, many of them losing there homes and having to leave the communities they grew up in. I have yet to see the logger community completely annihilated as the operational parts of the industry has been. I think this is simply a ruse to try to buy respect and more votes and one of Bells tactics to continue protecting and sucking up to his own.
I have absolutely no sympathy what so ever for the logger that has the 1000 acre farm, driving a $70,000 dollar truck and tax deductions coming out the yin yang so they can avoid paying tax's as much as possible....not to mention their willingness to log and sell raw logs outside of the province, while the local communities experience unemployment rates that are second to none.
This is down right disgusting and looks like dirty pool to me.

Posted by: Palopu on May 1 2010 9:22 PM

The idea may have merit, however I doubt if it will ever see the light of day.

For some reason I cannot see Canfor, West Fraser, and other huge mills putting their money into a pot to be used at sometime in the future for a circumstance where a Company may go broke. This money for all intents and purposes would just sit there and collect interest, and pay for the people who run the **Arms length** entity,

How often do Companies go broke in BC, and how often do loggers get stuck??

I suspect this would be challenged in the courts.

At the end of the day, they dont have a lot of time to get it passed, because the Liberals are on there way out, and they will never return to Govern this Province again.