Doman Industries Ltd is considering a legal challenge to far-reaching forestry reforms planned in British Columbia.

The company is upset about proposed legislation by the provincial government which would require companies to give up 20% of their timber cutting rights, a move aimed at making the forest industry more competitive and removing softwood lumber duties imposed by the US.

Doman says it will have an impact on some of its major assets. It believes its timber licences are worth at least C$100/m3, much higher than the C$24 rate being offered by the government in return for the forfeit.

The company says the legislation will have a “devastating” impact on coastal BC, with Doman probably having to shelve plans for a second value-added plant and removing a third shift at its Nanaimo sawmill.

Chief executive officer Rick Doman has said the company’s six mills are already short of logs to process. He said the removal of 20% would leave Doman without sufficient timber and the open market would not be able to make up the difference.