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Snapshot #4

Brascan Corp. Buys 10% of Cortes: Weyerhaeuser Gone

Some of Canada’s biggest financial moguls have acquired 10% of Cortes in a deal between Weyerhaeuser and Brascan Corp. The companies announced Brascan will be buying all of Weyerhaeuser’s coastal operations in a deal worth $1.2 Billion. Toronto-based Brascan Corp. will be taking over 635,000 acres (258,000 hectares) of private forestlands (1,246 ha of which are on Cortes), 5 saw mills, 2 remanufacturing facilities and significant Crown harvest rights on public lands.

Who is Brascan? Brascan is really an investment company. Big institutions or the very wealthy give Brascan their money and Brascan turns around and uses it to make a lot of money in ways regular folks and even regular corporations can’t. They own everything from high-end real estate to power plants and regularly buy large slices of other companies and restructure entire industries as they are doing here. Their plan is to restructure the coastal forest industry in BC by creating one company that will dominate the Coast. It seems they will sell the mills and “public lands” tenures to Western Forest (which they coincidentally also own a lot of) thus completing the game of Twister we have been playing on the BC coast as MacMillan Bloedel got bought out by Weyerhaeuser, Doman went bankrupt etc, etc..

The critical part for us on Cortes is that Brascan plans to hang on to the private lands as part of a new division in the company which will focus on making money by managing timberlands. This will be a new private equity fund managed by Vancouver forest industry analyst and RPF Reid Carter. Brascan already owns significant private timberlands in Maine, New Brunswick and Brazil.

What does this mean for Cortes? The deal will probably be finalised around June. Weyerhaeuser tells CES they will be carrying on business as usual until then meaning they still intend to put their four Bartholomew parcels on the market later this spring. Whaletown Commons negotiations will also continue throughout the spring. Brascan has promised to live up to various environmental promises that Weyerhaeuser had made regarding ‘their’ Crown lands but have said nothing about their intentions on private lands.

What about a public input process? When Weyerhaeuser wanted to buy MacMillan Bloedel in 1999, there were extensive public hearings in which CES and Klahoose strongly voiced our intentions to see Weyerhaeuser’s Cortes lands under local control. In response, the government required Weyerhaeuser to continue good faith negotiations with both Klahoose and CES regarding their Cortes lands. Due to changes the Liberals made to the Forest Act, this public input process no longer exists.

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