any of you remember how the Resource-Based Tourism Working Group came into being several years ago. This group, co-chaired by NOTO and MNR, was developed to be a forum to address industry concerns and find solutions to a variety of regulatory challenges facing the industry. The task that first brought us to the table was the contentious issue of outpost camp bed capacities being arbitrarily changed by MNR upon transfer to a new owner, but our focus immediately broadened to a range of industry concerns.
Our immediate solution to the bed capacity dilemma was the Interim Agreement on Bed Capacities, which we signed several years ago. Although it did not supply a long-term solution to the issue, it has generally succeeded in preventing conflicts over this issue as we continued to work toward a permanent solution. MNR also wanted us to work on trying to resolve the long-standing issue of the move to market value rents for outpost sites.
The issue around market value rents had been with us for a number of years, and MNR had attempted to move the industry to market value around the same time the spring bear hunt was canceled. Provincial policy clearly stated that all tenants on Crown Land were required to pay rent based on the actual market value of the land. For many years, our industry had occupied sites based on Land Use Permits, and paid only an administrative fee.
Using land appraisal data, we were able to work with MNR to arrive at a value for outpost sites that satisfies government concerns at a rate well below those that had been negotiated previously by operators who had negotiated leases. We were also able to lock these rates in for ten years.
The industry had strongly urged that long term leases be made available in place of LUPs, and the system we have put in place with MNR now makes 30 year renewable leases the preferred form of tenure for outposts.
Unfortunately, the move to market value based rents and long term leases significantly increases costs - market value was provincial policy. What we did was to make sure that these new costs also carried with them significant benefits, such as long term tenure.
Because the higher rental cost of outpost sites may cause some operators to relinquish sites, we are currently finalizing an agreement with MNR that will allow buildings and other improvements to remain on sites for a period of time after the site is relinqished to MNR to provide an opportunity to sell the improvements to another operator. During this period it is proposed that an administrative fee be paid similar to what LUP holders pay now.
This is a significant change from the established policy which required that any site be returned to its natural state before it could be surrendered. We hope that this procedure will help reduce the adverse impact on businesses that choose to give up sites.
Moving beyond market value leases, we are now very close to landing on a long term approach to replace the interim agreement on bed capacities. This agreement will build on the success of the interim agreement and help insure stability and predictability around transfers.
The RBT Working Group is now preparing to address two significant remaining concerns of the industry. We have long maintained that the overall objective of this entire exercise is to make it more attractive for an operator to invest in facilities. Although long term leases and clarity around bed capacity will help, it is NOTO's position that two other significant issues need to be addressed.
The first is a comprehensive licensing approach that helps to support the legitimate industry and discourages underground operations. Our ideas on this are contained in the paper we developed - Moving Forward: A Resource-Based Tourism Industry Fit for the Future. If you haven't read it, you can find it on the NOTO website at http://www.noto.ca/fm/general/MovingForward.pdf.
The second item is the development of a strategy to manage remoteness. What operator will go to the trouble of obtaining a 30-year lease if the remote values they depend on are threatened every five years when a new forest management plan is undertaken? We need to take management of remoteness out of forest management plans and move it into land use planning if we are to create the stability that the industry needs in order to invest.
Although we still have a number of significant issues to address, the Resource-Based Tourism Working Group has so far been a very effective mechanism for developing solutions to industry concerns around MNR issues and policies. Although the industry is currently going through some of its toughest times in memory, we need to continue to work on the issues facing us to create the environment we need to grow and develop when better economic times return.
This article was taken from pages 10 & 11 of NOTO's "The Outfitter" publication, Fall 2009 Issue