November 20, 2006

Quebec to invest nearly $722M to support forest industry management, modernization

A four-phase plan recently unveiled by the Quebec government will invest nearly $722 million to support the province's forest industry. The largest allocation, $425 million, will be used to finance modernization projects, followed by an investment of $197 to support new approaches to forest management. Initiatives to support forest industry workers and communities dependent on the industry will receive $54.8 million and $45 million, respectively.

A highlight of the measures to improve management of Quebec's forests is the increase, from 40% to 90%, in the refundable tax credit for construction and major repair of roads and bridges providing public access to forest ecosystems. This measure is valued at $132 million over four years.

The tax credit was first introduced in the 2006-07 provincial budget and is intended to facilitate multiple uses of forest areas, e.g. recreational as well as commercial. It will also promote better distribution of harvest areas, as recommended by Quebec's Coulombe commission. In addition, a good network of access roads will improve forest fire fighting effectiveness.

Two further measures will build on the forest investment strategy, also announced in the 2006-07 budget and intended to benefit both public and privately owned forestlands. The provincial government will take charge of production of tree seedlings for use in reforestation activities. Aimed at encouraging the recovery of disturbed forestlands, this initiative is valued at $45 million over three years.

In order to maintain the level of protection for forests, forest infrastructure, communities and other forest-related government investments, the province will also take responsibility for the costs of fighting forest fires and forest pests, at a cost of $20 million over the next two years. In 2009-10, the government will assess this approach to forest protection in the light of results obtained.

Finally, the government plans to introduce amendments to its forestry legislation aimed at enhancing the competitiveness of companies in this sector and providing greater flexibility in forest management with regard to supply and harvesting activities.

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