Chapter 9: Governments Gutting Their Holdings

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“The forest trees that in the olden time –
The people’s glory and the poet’s pride –
Tempered the air and guarded well the earth
And, under spreading boughs, for ages kept
Great reservoirs to hold the snow and rain,
From which the moisture through the teeming year
Flowed equably but freely – all were gone . . .
Their precious bales exchanged for petty cash,
The cash that melted and had left no sign;
The logger and the lumbermen were dead;
The axe had rusted out for lack of use;
But all the endless evil they had done
Was manifested in the desert waste. . . .

Great cities that had thriven marv’lously
Before their source of thrift was swept away
Faded and perished, as a plant will die
With water banished from its roots and leaves;
And men sat starving in their treeless waste
Beside their treeless farms and empty marts,
And wondered at the ways of Providence.”

-Report of Ontario’s Royal Commission on
Forest Reservation and National Park, 1893(1)

Nineteenth-century conservationists who were concerned about the loss of Ontario’s trees should have wondered not at the ways of Providence but at the ways of their governments, who had done everything in their power to raze the primeval forests. When the above poem was penned, government policies had propelled more than a century of forest destruction.(2)

France’s military needs first governed forestry policy in what is now Canada. After the French withdrawal in 1763, Britain’s Royal Navy – having denuded Great Britain – looked to Canada for oak and pine for its ships’ hulls and masts. In the nineteenth century, revenue generation replaced fleet building as the force driving deforestation. Earnings from the early civilian timber trade were to support the British Crown. Later, the government of the United Canadas, followed by provincial governments, planned on constructing roads and public buildings with timber revenues.

Maximizing revenues demanded maximizing cuts, or so went government logic. From the 1820s onward, the government required loggers to fell a minimum amount of timber within a specified period; non-compliers would lose their licences. It was a policy of economic folly. The “minimum cut” provisions, applied regardless of demand, periodically saturated the market with worthless wood and depressed the timber industry. An 1842 regulation specifying that an annual licence could be renewed only if the licensee had cut down 5,000 feet per square mile brought about the first depression in the timber market. In response, the government was forced in 1846 to reduce the minimum cut to 1,000 feet; further reductions occurred two years later.

The government experimented with other ways of ensuring that its trees would not remain standing, including directing loggers to fell all trees, regardless of their value. In another variation, in 1851 the government levied a charge on timber holdings that would double each year that the forest remained uncut. Like the minimum cut, the charge encouraged over-production, forcing loggers to cut unneeded lumber to avoid losing their rights to the trees. Not surprisingly, another severe depression in the timber market soon occurred.

Loggers vigorously protested the minimum cut requirements and other disincentives to conservation. But it was beyond their power to act: the government owned the resource and the government set the rules. Had the government not refused to sell timber lands, or had it at least sold secure property rights to the timber itself, financial self-interest would have driven loggers to conserve. Holding timber lands in their natural state, waiting for time and renewed demand to increase their value, would have enabled loggers to avoid – or at least ride out – the frequent depressions. They did just that whenever they could get away with it. The government termed this holding practice “speculation,” and renewed its efforts to fell the trees.(3)

Ironically, during the industry’s early years, regulations forcing the cutting of trees failed to produce the anticipated revenues. Monitoring and collection proved difficult and costly. “I have found it impracticable,” the Commissioner of Crown Lands reported in 1839, “to collect any important amount of duties on timber cut upon Government lands in other parts of the Province and the expenses attending the attempts to do so have borne much too large a proportion of the sums collected.”(4)

Governments soon discovered a new reason to raze their forests: job creation. In 1872, the Ontario government justified a controversial sale of logging rights north of Lake Huron by arguing that new sawmills would employ settlers in the area. The same motives later prompted government support for the pulp and paper industry; an 1892 agreement, establishing the pattern for future pulp contracts, offered favourable rates for the right to cut timber if the company hired three hundred hands for ten months of the year.

Meanwhile, agricultural settlement paralleled timber development in destroying Ontario’s forests. During and after the American War of Independence, the British government provided retreating troops and United Empire Loyalists with free grants of land along the lakes and rivers of what is now Southern Ontario. Throughout the following century, the government continued to lure settlers with the promise of free land, first in Southern Ontario and later between the upper Ottawa River and Georgian Bay.

But these land grants had strings attached: the government insisted that the land be developed. “Settlement duties” varied from time to time but generally included residing on the land, clearing and cultivating a certain number of acres within a specified period, and constructing a house. Settlers who failed to perform their duties could not acquire title – could not establish property rights – to their land. The threat of losing uncleared land prompted many settlers to cut their trees wastefully, or even to burn them.

Other incentives also encouraged needless deforestation. The Free Grant and Homesteads Act of 1868 created a “use-it- or-lose-it” regime in pine trees. The government allowed settlers to cut pine while clearing and fencing their land and building homes and barns, but reserved for itself the pine remaining once the settlers had acquired their titles. What settler in his right mind would conserve his pine trees?

Ironically, much of the land cleared by settlers proved unsuitable for farming. Surveyors, it turned out, had incorrectly assumed that all soil supporting trees could also support crops. Moreover, land grants proved too small to farm successfully, and were often too far from agricultural markets. As a select committee admitted in 1863, “[S]ettlement has been unreasonably pushed in some localities quite unfit to become the permanent residence of an agricultural population.”(5) By the end of that year, most of the settlers in the Ottawa-Huron country had left the land. And twenty years later, farmers were being urged to plant trees on their non-arable lands.

The economic folly of the governments’ forestry and agri-cultural policies was clear from the beginning. The environmental consequences were less obvious. Although at least one scientist warned of the dangers of deforestation as early as 1847, not until the 1860s and 1870s did the public begin to appreciate the extent of the damage. Agricultural land clearing and forestry had dried up streams, increased fire-hazards, spread tree diseases, and threatened fish and wildlife. And forests were continuing to fall at an alarming rate. In 1871, Sir John A. Macdonald warned, “We are recklessly destroying the timber of Canada and there is scarcely the possibility of replacing it.”(6) The following year an article in the Canadian Monthly echoed the alarm: “We are wasting our forests, habitually, wickedly, insanely, and at a rate which must soon bankrupt us in all that element of wealth.”(7) Eight years later, a speaker warned the United Fruit Growers Association of Ontario, “If something is not speedily and effectually done . . . we shall, before many years have swept their onward course, find ourselves compelled to forever inhabit a dismal treeless waste and an unfruitful region.”(8) Speakers at the 1882 American Forestry Congress worried that marketable Canadian and American timber supplies were nearing their end, and bemoaned the effects of deforestation, including climate change, soil erosion, and flooding.

The government was slow to respond. Finally, after the 1893 Royal Commission on Forest Reservation and National Park reported that “the wholesale and indiscriminate slaughter of forests brings a host of evils in its train,”(9) the province took a preliminary step: it established Algonquin Park in order, among other things, to preserve the primeval forest.

Park designation did not, however, protect Algonquin’s forest from logging. From the park’s earliest days, lumbermen already licensed to cut pine in the region were allowed to continue. And as other species, such as birch, became needed, the government amended the law to allow their harvest. Other reserved lands fared similarly; when the government reserved the Temagami forests in 1901, it refused to exclude lumbering.

Despite increasing public concern about the dwindling forests, government-sponsored deforestation persisted in the new century. Jobs continued to eclipse profitable logging, conservation, and equity on political agendas. In 1935, hoping to create 10,000 jobs, the Ontario government reduced mills’ dues and licence fees on the condition that the operators hire a certain number of people. “The putting of men back to work,” it explained, was more important “than the real or apparent losses in certain lines of revenue.”(10) The following year, putting men to work similarly inspired the Forest Resources Regulation Act, which empowered the Minister of Lands and Forests to seize timber limits from companies slow to cut timber. Under the act the Minister redistributed several thousand square miles of timber lands that had until then been held out of production.

Creating forestry industry jobs remains a cornerstone of provincial forest management policies, with governments’ short- term perspectives blinding them to the counterproductive nature of programs that create jobs by destroying wealth. In 1989, the Ontario government sold trees to logging companies at an aver-age of just 85 cents apiece to prop up the industry.(11) Minimum cut requirements remain in effect, requiring loggers to harvest trees regardless of demand, market price, or profitability. And forestry agreements continue to allow for the reallocation of uncut wood to those who promise to harvest it.

The government also continued in this century to push agricultural development on unsuitable land. Soon after a “Clay Belt” running through Cochrane, Kapuskasing and Hearst, Ontario, was discovered in 1900, the government opened up the area to free land grants. By 1920, the government had spent $800,000 settling 101 veterans near Kapuskasing. But it became increasingly clear that arable farming in the Clay Belt, with its harsh climate and distance from markets, would be unprofitable. By 1957, only two of the original grant recipients remained in the Kapuskasing area.(12)

Ontario is by no means alone in destroying its forests. In fact, it is the destructive behaviour of other provinces that has earned Canada its reputation as “Brazil of the North.” Virtually all provinces promote deforestation in the name of job creation. They do so not only at the environment’s peril but also at considerable – even absurd – economic cost. Alberta has given massive subsidies to foreign pulp and paper corporations in order to put people to work; the jobs have cost the government hundreds of thousands of dollars each. Saskatchewan is reported to have spent almost a million dollars per job in one pulp and paper job creation endeavour. Ironically, despite the governments’ efforts, Canadian forests produce fewer jobs per volume of wood cut than do those of any other industrialized country.(13)

In British Columbia, where 96 per cent of productive forest land is publicly owned, the government has done much to encourage unsustainable forestry practices. Throughout much of this century, its policies were driven by the significant revenues generated by timber operations. Logging filled not only the provincial coffers but also politicians’ pockets; in the 1940s and 1950s, the Minister of Forests awarded tree farm licences (a euphemism for tree harvest licences) to large corporations that made political contributions to his party.(14)

As in other provinces, in British Columbia job creation has replaced revenue generation as the primary motivating force behind forestry policy. The province subsidizes logging by collecting only a fraction of its lumber’s value from those who cut it; one estimate of its forgone revenue exceeds $2 billion a year.(15)

An obsession with jobs produces not only bad economic policy (at the expense of even more jobs) but also bad environmental policy. British Columbia has gained international notori-ety for endorsing clear-cutting of its ancient rainforests. In one infamous 1993 announcement, the government, driven by its concern for forest industry jobs, allowed logging in 67 per cent of the old-growth forests of Clayoquot Sound. The decision to permit clear-cutting in one of the world’s few remaining large temperate rainforests outraged environmentalists around the globe.(16)

The government of British Columbia, like its counterpart in Ontario, prompts loggers to cut trees they view as valueless. Described by the Minister of Forests as “use it or lose it,” the province’s policy controlling cuts penalizes holders of tree farm licences who fail to harvest the minimum required.(17) Not wanting to lose their timber allocations, operators create logs for which there is no demand – often from trees which, when standing, had considerable recreational or ecological value.

Nor is the problem confined to Canada. The U.S. Forest Service is notorious for promoting uneconomic logging in national forests.(18) American government agencies even try to circumvent federal laws in aid of the forest industry. Although logging in the federally owned old-growth forests of the Pacific Northwest threatens the spotted owl and violates the Endangered Species Act, a cabinet committee tried in 1992 to exempt certain timber operations from the act. The administration renewed its efforts in 1994. Its goal? Preserving forest industry jobs.(19)

Forestry policy illustrates the extent to which governments have depleted public resources. Other resources – from minerals to fisheries to rivers with power-generating potential – have received similar treatment in the name of revenue generation, growth, industrialization, job creation, or other perversions of “the common good.”(20)

Tragically, the public has been powerless to prevent the devastation. Property rights, which can so effectively protect private resources, have been of no use. One can only protect that which one owns, and all too often it is the government – not the public – that owns Canada’s natural resources.(21) As long as they continue to own public lands and resources, governments will be free to destroy them to achieve their ends.

Property rights have similarly failed to prevent the pollution of public resources. The common law saviours – trespass laws, nuisance laws, and riparian rights – have traditionally been linked to property ownership or occupancy; they have arisen from harm to individuals’ private interests. Common law property rights have not empowered people to protect public resources. As the jurist Sir William Blackstone explained more than two centuries ago, “[T]he law gives no private remedy for anything but a private wrong.”(22) Since individuals lack proprietary interest in public resources, they often have no cause of action for damages done to those resources.

Public nuisances, or pervasive nuisances, affect many people rather than select individuals. Normally, in the case of public nuisances, individuals lack the “standing” to sue: they lack the right to stand before a court. Only the attorney general, intended to be the guardian of the public interest, may take action on behalf of the public at large. Blackstone defended this practice on practical grounds: “[T]he damage being common to all the queen’s subjects, no one can assign his particular proportion of it; or, if he could, it would be extremely hard if every subject in the kingdom were allowed to harass the offender with separate actions.”(23)

Hickey v. Electric Reductions Co. of Canada illustrates the common law’s failure to safeguard public property. In that famous 1970 Newfoundland case, commercial fishermen sought an injunction against poisonous discharges from a phosphorous plant into Placentia Bay. Although the court acknowledged that the pollution, by harming the fish, may have jeopardized the fishermen’s livelihoods, it decided that they lacked the standing to sue: first, they had no property interest in the fish, and second, their damages did not differ in both kind and degree from those of the general public, all of whom had the right to fish in public waters and all of whose rights had been violated to the same degree.(24)

Had the fishermen’s damages differed in kind and degree, they could have challenged the public nuisance. As Blackstone explained, “[W]here a private person suffers some extraordinary damage, beyond the rest of the queen’s subjects, by a public nuisance . . . he shall have a private satisfaction by action.”(25) This remains the case: an individual has a right of action to abate a public nuisance if his property has been damaged or if he can show “special damage”; he must have experienced a harm both greater than and qualitatively different from that of other members of the public.(26)

Ontario’s Environmental Bill of Rights, proclaimed in 1994, relaxed public nuisance standing restrictions in the province and introduced harm to a public resource as a new cause of action.(27) However, the bill included the government’s favourite escape clause: it empowered the court, after considering economic and social concerns, to dismiss an action if doing so would be in the public interest. The government thus ensured that short-term job creation would remain a valid excuse for destroying the province’s resources.

Notes

1. Ontario’s Royal Commission on Forest Reservation and National Park, Report, 1893, cited by Lambert, Renewing Nature’s Wealth, 10. (Line 18 of Lambert’s version reads “sate” rather than “sat.”)

2. Unsustainable forest management dates back even farther. Economic and environmental folly characterized the forestry practices of generations of English kings, who, between the sixteenth and eighteenth centuries, stripped vast royal woods to meet their revenue requirements. Adam Smith described the equally wasteful practices of many eighteenth-century European governments:

Though there is not at present, in Europe, any civilized state of any kind which derives the greater part of its public revenue from the rent of lands which are the property of the State; yet, in all the great monarchies of Europe, there are still many large tracts of land which belong to the crown. They are generally forest; and sometimes forest where, after travelling several miles, you will scarce find a single tree; a mere waste and loss of country in respect both of produce and population (An Inquiry into the Nature and Causes of the Wealth of Nations, Book 4, 233).

For the following discussion on the history of Ontario’s forestry and agricultural policies I have relied on Albion, Forests and Sea Power; Lambert, op. cit.; Mussell, “Property Rights in the Development of Ontario Forest Tenures”; Nautiyal, “Forest Tenure Structure in Ontario”; and Nelles, The Politics of Development.

3. Anderson and Leal discuss the extent to which economic considerations led late nineteenth-century lumbermen in the American Great Lakes states to log or, alternatively, to conserve their privately held forests. In what the authors describe as both economically efficient and environmentally beneficial speculation, owners often delayed harvesting stands that would, uncut, increase in value faster than would alternative investments (Free Market Environmentalism, 37-50).

4. Commissioner Sullivan, Report on the Public Departments, 1839, 158, cited by Lambert, op. cit., 45.

Revenues generated by timber development gained importance during the second half of the nineteenth century. Between 1867 and 1899, Ontario’s timber industry supplied approximately 28 per cent of provincial revenues. Warnings from opposition MPPs and academics that timber represented capital rather than a source of current revenues fell on deaf ears.

Ontario’s forests were also an important source of political capital, especially in the first decades of the twentieth century. Donations to the party in power helped lumbermen obtain timber limits. Before provincial elections, it was not unusual for the government to “auction off” timber with neither advertisement nor competition.

5. The Select Committee on the State of the Lumber Trade, cited by Ontario Royal Commission on Forestry, Report, 1947, 8-9, cited by Lambert, ibid., 91.

6. Ontario Ministry of Natural Resources, White Pine, 41.

7. Captain N. W. Beckwith, Canadian Monthly, June, 1872, 527, cited by Lambert, op. cit., 158.

8. Commissioner of Agriculture and Arts, Report, 1880, 146, cited by Lambert, ibid., 177.

9. Royal Commission on Forest Reservation and National Park, op. cit., 9, cited by Lambert, ibid., 169.

10. The Department of Lands and Forests, Annual Report, 1935, 10, cited by Lambert, ibid., 339.

11. For more information on governments’ incentives to destroy forests, see Solomon, “Save the Forests – Sell the Trees,” excerpted in Dolan and Lindsey, Economics, 887-8. I am also grateful to Al Mussell for information on this issue.

12. Denise Call, the Ministry of Agriculture and Food’s agricultural representative for Cochrane North, notes that the Clay Belt now hosts a number of productive farms; thanks to the adoption of new techniques (funded by more government grants), farmers now see the northern climate as a “particularity” rather than a disadvantage (personal communication, November 21, 1994).

13. Cooperman provides a province-by-province description of expensive and destructive forest practices in “Cutting Down Canada,” 55-63.

14. Drushka, Stumped, 15, 31, 72, 176, 265.

15. Personal communication with Ben Parfitt (co-author, with M’Gonigle, of Forestopia), July 26, 1994.

The Western Canada Wilderness Committee points out the extent to which political rather than financial gain motivates forestry policies: in past years the government has earned less in stumpage fees than it has spent running the forest service. (Personal communication with Paul George, executive director, February 23, 1994.)

16. For more information on the Clayoquot decision, see articles in the Globe and Mail dated April 14, May 1, May 3, and May 12, 1993.

In another infamous decision, in 1990 the Social Credit government gave MacMillan Bloedel permission to log the temperate rainforest of the upper Carmanah Valley, despite the low economic return expected for both the government and the forestry giant. (See the Globe and Mail, “Carmanah logging called poor investment,” and the Financial Post, “Carmanah no winner for MB?”) As of 1994, however, no logging had occurred.

17. Drushka, op. cit., 52. Drushka discusses another disincentive to conservation on 79.

18. Anderson and Leal explain that timber programs in U.S. national forests not only destroy the environment but also regularly lose money (op. cit., 52-4). Also see Dolan and Lindsey, op. cit., 885; Grumbine, “Policy in the Woods,” 253; Wall Street Journal, “Hayek’s Heirs Contemplate Greener Pastures”; New York Times, “Choice of Chief Upsets Ranks of Forest Service”; and Miller, “Land of the Free,” 68.

19. Financial Post, “Logging gets OK in spotted owl area”; and New York Times, “White House Seeking to Ease Ban on Logging in Owl Areas.”

20. Nelles, op. cit., discusses the extent to which Ontario governments have confused the public interest with the interests of selected industries. A century of governments intent on promoting rather than regulating mineral extraction, logging, and waterpower development left the people of the province no better off – indeed, likely worse off – than they would have been had the resources been in private hands.

21. Provincial governments own 80 per cent of Canada’s productive forest land; the federal government owns 11 per cent; 430,000 private woodlot owners own the remaining 9 per cent.

Forest ownership in the three provinces with the greatest amount of productive forest land is as follows:

Quebec: 87.6% provincial; 0.4% federal; 12% 120,000 private owners

British Columbia: 95% provincial; 1% federal; 4% 21,000 private owners

Ontario: 84% provincial; 1% federal; 15% 169,000 private owners

(1986 figures from Forestry Canada’s Forestry Facts, 10, 60, 63, 75.)

22. Blackstone, Commentaries on the Laws of England, Volume 3, 193.

23. Ibid.

For more information on public nuisance see Horwitz, The Transformation of American Law 1780-1860, 76-7; Ontario, Report of the Task Force on the Ontario Environmental Bill of Rights, 11-3, 91-2; and Estrin and Swaigen, Environment on Trial, 112-3, 812.

24. Hickey v. Electric Reductions Co. of Canada (1972), 21 D.L.R. (3d) 368, cited in Canadian Environmental Law Research Foundation, “An Overview of Canadian Law and Policy Governing Great Lakes Water Quantity Management,” 118-9. Also discussed as Hickey v. Electric Reduction Co. (1970), 2 Nfld. & P.E.I.R. 246, 21 D.L.R. (3d) 368 (Nfld.S.C.) in Report of the Task Force on the Ontario Environmental Bill of Rights, 12; in the Financial Post, “Bracing for environmental rights bill”; and by Wright and Linden, Canadian Tort Law, 17-2 – 17-5.

25. Blackstone, op. cit., 193.

26. Canadian Environmental Law Research Foundation, op. cit., 118-9, Ontario, Report of the Task Force on the Ontario Environmental Bill of Rights, 91-2, and Epstein, “The Social Consequences of Common Law Rules,” 1731.

27. Bill 26, An Act respecting Environmental Rights in Ontario, received royal assent December 14, 1993, and was proclaimed on February 15, 1994.

Section 103 (1) of the act states: “No person who has suffered or may suffer a direct economic loss or direct personal injury as a result of a public nuisance that caused harm to the environment shall be barred from bringing an action without the consent of the Attorney General in respect of the loss or injury only because the person has suffered or may suffer direct economic loss or direct personal injury of the same kind or to the same degree as other persons.” Section 84 (1) states: “Where a person has contravened or will imminently contravene an Act, regulation or instrument prescribed for the purposes of Part V and the actual or imminent contravention has caused or will imminently cause significant harm to a public resource of Ontario, any resident in Ontario may bring an action against the person in the court in respect of the harm and is entitled to judgment if successful.”

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