Monday, September 24, 2018

Examining Camp Costs within the BC Tree Planting Industry

This is a very long read, probably around fifteen minutes for the average reader.

For years, we've heard discussions about the value of charging “camp costs” within the tree planting industry.  This is a very complex topic, and one which many planters have not been properly informed about, so I’m going to try to point out some of the nuances of the current camp cost system.  I’ll preface by stating that I’m neither strongly for nor strongly against the long-term continuation of the current system.  I’m simply trying to look at camp costs from all points of view, to try to figure out what will ultimately be best for all planters.
Tl;dr:  I think that if we were to adopt a psychological mindset, it makes sense to eliminate camp costs.  If we were to simply analyze the net economic benefits, eliminating camp costs [in the absence of new revenue] doesn't provide a net gain to planters as a whole.  But these assessments will make more sense when you read everything below.

How Do Camp Costs Work?

For any readers who don’t know what camp costs are, it’s a daily charge levied by an employer to all workers to help subsidize the cost of running a bush camp operation, and of feeding the workers within this camp.  In most companies, camp costs are charged on a “per work day” basis, ie. planters have to pay this cost for each planting day, but if the camp is on a day off with no work available, no camp costs are charged.  Some variations do exist; a few companies charge camp costs on days off (often at a reduced rate) and some link camp costs to meals provided, ie. if the planters work for a full day, but no dinner is available, then that day’s camp costs are reduced significantly.

In BC, legislation is in place to cap the maximum amount allowed to be charged for camp costs at $25.00 per day, plus GST.^1  No such legislation exists in Alberta, and camp costs there are frequently higher than in BC, sometimes as high as $34.00 per day.  The higher camp costs can be somewhat justified because food costs are generally higher in Alberta than in BC.

Camp costs are not restricted solely to camp-based operations.  Employers also charge camp costs when tree planters are staying in motels (when the contractor/employer pays for the motel charges).  In such a situation, when operating in BC, the camp costs are still generally capped at $25.00 per day, but there are exceptions.  The exact rule, as taken from the BC Silviculture Workers’ Fact Sheet, states that, ”If a silviculture worker agrees in writing, the employer may charge for camp costs or other accommodation. The amount charged cannot exceed $25 per day for camp costs, or if the worker is lodged in a motel, the actual cost for the motel room.  The problem is that the “actual cost” for the room is hard to determine.  If a planter is in a 2-person room, and one of the planters goes away for a few days (perhaps to attend a funeral), is the employer allowed to charge the full room rate to the remaining planter during that period?  Even more vague, if you read “motel accommodations” as being a separate situation, then when motel costs are LESS than $25/day, the employer probably should not be allowed to charge $25/day.  Yet companies often charge $25/day per person even when they are getting a cheaper rate by paying for the room per month.  It’s all in the interpretation of the rule.  This is a minor argument; what is significant is that when a planter is being charged camp costs in a motel, only their room is paid for.  Their food is not paid for, which means that it is different than a mobile camp situation.

Free Lunch

In a perfect world (for planters and planting companies), there would be no such thing as camp costs.  However, a common saying comes to mind:  “There’s no such thing as a free lunch.”  In order to eliminate camp costs, someone needs to find a way to pay for the expense.  Currently, planters pay this.  Can the expense be shifted onto the employer?  Sure, but it means that there is less money for wages.  Can the expense be shifted onto the licensees?  In theory, but what forester is going to accept that kind of hit to his/her budget simply because they feel sorry for the planters?  Grocery stores won’t donate free food.  Motels won’t offer free rooms.  The government isn’t about to step in and volunteer to open the public coffers.  If a decision is made that the planters no longer pay camp costs, the money inevitably will add to a company’s operating costs.  This means that they have to reduce money somewhere else (wages or profits), or else suffer financial losses.  Operating at a loss (or foregoing any profit) can be sustained for a short time, but not in perpetuity.  Therefore, the only long term solution for a company to compensate for the loss of camp costs charges is to reduce wages.

If a planting contractor reduces wages, and tries to perfectly offset the loss of camp cost charges, then the AVERAGE employee will lose exactly what they would have previously lost as a camp cost charge.  So taking a simple example, if camp costs were $25, and a planting company no longer charged the workers that $25, they could simply pay $25/day less in wages, and the company would be able to sustain operations on an ongoing basis, exactly as before.  This is what's known as a "zero-sum solution":  the planter would not really benefit from the elimination of camp costs, because their take-home pay (gross wages less camp costs fees) would be the same as it was before.

This is where things get tricky.  In any other industry, a systemic change could happen, and all employees would be affected equitably.  It would be fair to everyone, with everyone’s net pay changing equally.  And to be fair, IF compensation for tree planting was determined the same way as any other industry (ie. hourly pay or day rates), this change would have happened decades ago, with full support from all planting companies and all employees.
It’s important to remember that camp costs are not charged in any other camp-based industry.  If you work in a logging camp, or mining camp, or oil & gas camp, the company that employs you also covers your camp costs.  So why do those industries not have camp costs, yet the planting industry keeps them?  It’s quite simple really.  It’s because our compensation system is completely different.  In all of the other industries, workers get hourly pay, and get treated equally (if performing the same duties, and having the same skills and qualifications and seniority).  This is not the case in tree planting.  Planters are paid via a piece-rate compensation system, earning a certain amount per tree planted.  The harder one works, the higher the compensation.  And here’s where the whole problem lies.

Let’s say that a company needs to “recover” $25.00 per day per person to offset camp cost expenses.  To do that, the company reduces the tree price.  The company only needs to figure out the average production per person per day, in order to determine how much the tree prices need to be reduced to cover that $25.00.  I’ll try to keep the math simple, and say that in our hypothetical company, the average planter is able to plant 2500 trees per day.  Therefore, if the average planter got paid one penny less per tree, than would be 2500 fewer pennies paid out in wages.  In other words, each worker would get a $25.00 reduction in wages, and this money would make up for the lack of a $25.00 camp cost fee deduction.  Simple, right?

No.  The problem is that everyone produces a different amount, depending on their skill, experience, motivation, intelligence, sleep deprivation, the day’s temperature and precipitation, the difficulty of the piece they’re in, how much coffee they drank at breakfast, and hundreds of other factors.  In general though, more experienced planters are faster planters, and plant more trees in a day.  So let’s compare two planters:  One, whom we’ll call “Johnny Highballer,” usually plants 3500 trees per day.  Another, whom we’ll call “Sammy Slowpoke,” usually plants 1500 trees per day.

If these two planters were working on a contract where trees were 11 cents apiece, and $25.00 camp costs were charged, their daily earnings would normally be:

   Johnny = (3500*$0.11) - $25.00 = $360.00
               Sammy = (1500*$0.11) - $25.00 = $140.00

Under the hypothetical new system, where no camp costs were charged (and tree prices were adjusted downward to exactly offset the money), the daily earnings would change as follows:

               Johnny = (3500*$0.10) - $0.00 = $350.00
               Sammy = (1500*$0.10) - $0.00 = $150.00

So you can see that under both systems, the total amount that the planting company pays out is the exact same ($500), but there has been a shift, or wealth redistribution, that hurts Johnny Highballer and benefits Sammy Slowpoke.

Anyone who has studied camp costs in any depth in the past should already know how this works, so it shouldn’t come as any surprise.  Eliminating camp costs, in the absence of any other magical source of new funding to offset the lost fees, will hurt high-production workers, and help low-production workers.  The net overall effect to the system will be a wash, ie. no overall financial difference.

Should We Eliminate Camp Costs?

Why then, if there is no adverse financial effect to planting companies of eliminating camp costs and compensating by lowering prices, has no company been bold enough to do this yet?  There are two main reasons.  First, the people who make decisions (company owners) don’t want to make a systemic change that is detrimental to the very people whom they value the most: the highest producers.  Second, unless the entire industry moves to eliminate camp costs in lock-step, it could create perceived inequalities (lower tree prices at a company without camp costs might cause workers to migrate to companies with higher prices).  [Note that some companies did eliminate camp costs in 2019, but after a few years opted to return to the previous economic model, presumably due to planters at those companies complaining about tree prices being too low compared to industry peers and employee retention suffered].

What are companies striving for?  If you’re going to champion financial equality for your work force, a much better change would be to simply start paying everyone an hourly rate.  Of course, if someone tried that, it would destroy the modern planting industry.  Certainly, there are situations where equal hourly or daily pay is appropriate.  We see it in hourly rates or day-rates for some checkers, trees runners, support staff, supervisory staff, and also on certain projects where it just makes sense for everyone to earn a set amount per day (used in some types of specialty planting, such as reclamation projects or oil lease planting, etc.).  But is the industry ready for a broad-scale shift to general hourly wages?  I don't think so.

The entire planting industry was built upon a piece-rate mentality, and that’s what initially made it so appealing to so many people.  An individual could work harder than their co-workers, and would be recognized for this hard work in the form of increased financial compensation.  Motivation and work ethic was rewarded, and forced people to push themselves harder than they ever thought capable.  If planters were paid by hourly rates, almost nobody would exert themselves as hard as they do for piece-rate wages.  The industry as a whole would be less efficient, and overall earnings would be diminished as per capita production decreased.

My first take-away lesson is that eliminating camp costs, and indirectly penalizing high production workers, would run completely contrary to the entire mindset of piece-rate compensation, and to the ethos of the western Canadian tree planting industry.

Having said that, I’m not saying that it shouldn’t be done.  All I’ve done so far is to try to help planters understand the shift in compensation that would need to accompany the elimination of camp costs.  Let’s look at some nuances next.

Does the negative impact on high-production workers, and the positive impact on low-production workers, occur solely within each company, or does it occur between companies?  The answer is:  both.  We’ll call the impact “within any given company” the micro impact, and “between companies in the industry” the macro impact.

In terms of the macro impact, one would expect that companies who attract a high level of highly experienced planters (presumably coastal and some southern Interior companies) would be reluctant to eliminate camp costs.  At the same time, one would expect that companies who have lower average experience levels (northern “rookie mills”) would embrace an industry-wide elimination of camp costs.  However, I haven’t seen any evidence to support this.  Many owners seem to be either undecided about whether such a move would be a good idea, or are acting contrary to expectations.  Some owners of large northern companies are currently reluctant to endorse such a change, whereas other smaller company owners down south would support it.  Camp-based operators have to swallow much larger subsidies to workers than motel-based operators, which may offer some rationale behind the dichotomy.

In terms of the micro impact, however, real-world results mirror expectations.  Most company owners want to do what is best for their most experienced workers.  Why is this?  In a word:  retention.  They want to retain their best people.  And this brings up a key point:  Even though individual companies want to retain their best workers, what does the industry as an abstract whole want?  They want overall retention too.  However, perhaps increasing the retention of less skilled workers is a goal that is too often ignored.

My second take-away lesson is that eliminating camp costs should theoretically improve retention of new and inexperienced workers (giving the greatest benefits to companies who hire large numbers of inexperienced planters).  However, keeping the existing camp cost system in place will theoretically maximize retention of skilled employees (giving the greatest benefits to vet-heavy companies).  Considering these theories, and ignoring the short-term and medium-term horizon, which approach will be best for the industry as a whole when we think ten years ahead?

Camp Operations vs. Motel Shows

Let’s examine another divide now:  the difference between camp costs and motel costs.  At the moment, it is FAR cheaper for a planter to work in a camp-based environment (from the planter’s point-of-view).  Let’s quickly look at a 3&1 shift rotation, with camp costs (or motel costs) at $25/day, and the planters being able to feed themselves for approximately $20/day (regardless of whether this is long-term grocery shopping and cooking for oneself in a motel, or eating snacks & fast food on a day off).  Unfortunately, it's becoming increasingly impossible to feed oneself for $20/day, but let's stick with that number for now.  These numbers will all presented from the perspective of the planters, not from the perspective of the planting company.

Scenario 1:  Camp
3 days of camp costs ($25/day) plus 1 day of buying food in town on day off ($20) = $95 in 4 days.
This works out to $23.75 per calendar day, or $31.67 total cost to live per work day.

Scenario 2:  Motel
4 days of motel costs ($25/day, remember that you still pay for the motel on the day off) plus 4 days of buying groceries and cooking for yourself ($20/day) = $180 in 4 days.
This works out to $45.00 per calendar day, or $60.00 total cost to live per work day.

As you can see, there is absolutely no question that earnings need to be higher in a motel-based accommodation situation, simply to be able to cover the higher cost of living.

What happens if camp costs are eliminated?  How do the above scenarios change?

Scenario 1:  Camp
3 days of free living plus 1 day of buying food in town on day off ($20) = $20 in 4 days.
This works out to $5.00 per calendar day, or $6.67 total cost to live per work day.

Scenario 2:  Motel
No motel costs but you still have 4 days of buying groceries & cooking = $80.00 in 4 days.
This works out to $20.00 per calendar day, or $26.67 total cost to live per work day.

In either situation, with or without camp costs, it is cheaper for a planter to stay in a planting camp.  The advantage would be slightly reduced with the elimination of camp costs, but it would not be eliminated.  Of course, if companies using motel accommodation began to provide their planters’ food, then the industry would be able to start having a conversation that started with a more consistent baseline between companies.

At this point, I should also remind planters that camp cost expenses for a company are much higher than what planters pay.  For camp-based operations, it would depend on the complexity of the camp and equipment therein, and for motel-based operations, it would depend on the establishment that workers are lodged in.  Either way, my guess is that most motel operations cost companies at least $40 per day, and most camp operations cost significantly more than that, so in both cases, the planters are only subsidizing a portion of the true costs of housing and/or feeding the planters.

Minor Nuances

There are other nuances to consider, when looking hypothetically about what would happen with the elimination of camp costs.  Let’s look at some of those:

Minimum Wage Top-Up
Assuming a closed economic system, such that if camp costs were eliminated, 100% of that change would be offset by a decrease in overall wages within the system, what happens with regard to low earners?  In BC, according to employment standards legislation, anyone who does not earn minimum wage during any given pay period (by virtue of their piece-rate earnings) must be topped up to the amount that they would have earned if paid minimum wage for the hours worked.  Of course, some companies still shirk this regulation regularly, but let’s for a moment assume that they will get caught eventually, and in the long term, the system will start to work as originally intended.  Minimum wage top-up is calculated on gross wages, not on gross wages less camp costs.  Therefore, if tree prices went down slightly to offset an elimination of camp costs, the companies that pay minimum wage top-up legitimately would end up paying greater amounts of top-up.

Income Taxes
If workers’ wages are reduced slightly, then their tax obligation is also reduced, so there is something of a claw-back for anyone who actually earns enough to pay income taxes.  Eliminating camp costs might be considered a taxable benefit, if meals and/or lodging are provided at no cost to workers, so the income tax obligation to workers might remain unchanged.  Of course, if companies didn’t recognize this obligation immediately, and it was caught a few years later during an audit, the workers might get a nasty tax bill that they weren’t expecting.

These are related to income taxes, as noted above.  Some companies issue either a Remote Worksite Allowance (RWA) or a T2200 (Declaration of Conditions of Employment) form.  Either of these may reduce a planter’s income tax obligations.  There are some limitations (which are best suited for a different post), such as the requirement under RWA to maintain a separate self-contained domicile elsewhere during the period of employment.  Either way, the elimination of camp cost fees would possibly affect eligibility for either of these forms, and certainly would affect total eligible deductions.  Incidentally, you may eventually have some questions about taxes.  If so, bookmark this link:

Employment Insurance
A fairly significant number of tree planters draw employment insurance (EI) benefits when not planting.  This is the nature of seasonal work.  If gross wages drop slightly when camp costs are eliminated, this would hurt anyone who draws EI because it would also reduce their weekly benefits.  Of course, this is a complicated situation because of weekly maximums and other rules for EI claimants.  The number of EI claimants in the large northern companies is quite low, probably less than ten percent in my experience (many of these people attend college or university from September to April and therefore don’t open EI claims).  However, the number of seasonal EI claimants at the coastal and southern Interior companies that I have worked at is quite high, often exceeding two-thirds of the workforce.  Therefore, eliminating camp costs would have much more of a negative impact on the workers in the smaller coastal & southern companies, with respect to this specific issue.

Anyone seeking a loan or a mortgage generally has to show the bank some sort of verification of recent historical income.  If your annual income is reduced by a couple thousand dollars due to the elimination of eighty days’ worth of camp costs, it will reduce the amount of any loan you’ll be allowed to carry.

Student Loans
A lower gross income that would accompany lower wages would be of benefit to many workers at northern companies who rely on student loans to get them through college/university.

Management Pay
At some companies, crew bosses and camp supervisors are paid by commission, rather than by day rates or salaries.  In those companies, if camp costs were eliminated and wages went down, that would have a negative impact on commission earnings for the foremen and supervisors.  They might ask for slightly higher commission percentages to offset their pay cut.

Some people were paying camp costs of close to $25 per day back in the early 1990's.  Just as the impact of inflation has slowly eroded earnings, inflation has also made the negative impact of camp costs less severe for planters every year (thanks to BC's $25.00/day cap).  If inflation continues and tree prices double over the next two decades, but camp costs remain capped at $25.00, their impact will be even less severe.  By the way, if I'm still planting in twenty years, somebody please shoot me and put me out of my misery.

Psychological Impact
Planters who don’t understand camp costs (the majority of the workforce) don’t like camp costs.  Eliminating them would make a lot of people think they’re in a better situation, regardless of whether or not that is truly the case.

Fewer Camps?
When considering the true costs of running a camp operation vs. motel lodging, it is unquestionably more expensive to run a camp (despite the recovery of camp cost charges to planters).  There are many expenses that planters don’t often think about.  Above and beyond the cost of the cooks’ wages and the food consumed, there is the purchasing/repairs/maintenance to camp structures and equipment, capital investment, fuel consumption (the generators in my camp alone burn 120 litres of gasoline per day), propane, water deliveries, fees and permitting, and much more.  Lodging is also expensive for motel-based operations, but not as expensive as running a camp, and motel operations have the advantage (to the company) of not providing food.  If camp costs were eliminated, would some companies shift away from camp operations to motel operations?  If so, this would unquestionably hurt the planters in terms of longer drives to the blocks (and therefore reduced earnings).  It would also lead to less healthy planters in situations where young workers have no real understanding of their own nutritional requirements.  Unfortunately, many young planters lack basic life skills, such as cooking properly for themselves.  Planters are high-performance athletes.  Inadequate nutrition leads to lower production, which means lower earnings.  I’ve seen this directly when my camp has temporarily moved into motels for special circumstances, and some planters foolishly move to a diet of chips, pizza, and Mr. Noodles.  Within three or four days, the production numbers for those planters inevitably dropped by 15% to 20%.

Going It Alone
What would happen if one company decided to eliminate camp costs, but the rest of the industry didn't follow suit?  Would that company have an advantage in recruiting planters?  Or would it suffer cost disadvantages that would be reflected in tree prices, and those "lower" tree prices would offset any goodwill generated by lack of camp costs?  I believe that one company in Ontario tried to operate without camp costs a few years ago.  I'm not sure what happened in that experiment.  I do know that at least one other large company in Alberta tried to remove camp costs a few years ago, but subsequently changed reinstated camp costs a few years later.

Bottom Line

The bottom line is that I can’t give anyone any advice about whether or not the elimination of camp costs would be good or bad for any specific person.  As you can see from the many points already covered, an individual planter’s unique personal situation will determine whether or not the elimination of camp costs would ultimately be of long-term benefit.

Another significant area of imbalance is the fact that motel-based operations rarely provide food for planters.  If owners of companies that work out of motels are in favor of radical changes to benefit their workers, maybe they should start paying for their employees’ food (the same way that camp-based operators do).  I’ve seen at least one occasion where a coastal operator rented a kitchen and hired a cook and fed his planters.  Why doesn’t this happen more frequently?

When I started planting, I was very annoyed with having to pay camp costs.  After a few years, I began to realize that I spent the same amount of money on food in town on a day off.  I also spend more than $25 per day to eat in the real world when I’m not working, but I don’t have the luxury of someone preparing my meals.  I eat very well in planting camps, and I no longer begrudge the camp costs.

I think the core argument boils down to this:  If it comes down to an industry-wide vote, company owners need to stop worrying about what is best for their own companies individually, relative to their competitors, and decide what is truly best for the industry.  That decision may boil down to a philosophical choice between psychological impact (which favors elimination of camp costs) versus doing what is consistent with the piece-rate economics of the planting industry (which favors keeping camp costs in place).
Eliminating the current camp cost framework, with the intent of improving the industry, has a major weakness.  Ultimately, the financial benefits would not be consistent for all planters.  Although some workers would be better off if camp costs were eliminated, other workers would be shortchanged (even though they might not realize it).  The overall result to the workforce would be a zero-sum change.


1.  Eliminating camp costs would be a benefit to slow planters and would penalize fast planters.  Our estimate is that the average planter in western Canada plants approximately 1650 trees per day, industry-wide.  Camp costs could therefore be eliminating at no cost to companies by dropping tree prices by 1.5 cents per tree.  But do any experienced planters want to see that happen?  If I'm a vet that averages 2200 trees per day, I'd rather pay a flat rate of $25 for camp costs instead of losing 1.5 cents per tree on 2200 trees ($33).

2.  A lot of people say that companies should just "build it into the bid price."  That's easy to say, until you're bidding against other companies.  If you raise your bid price and your competitors don't, you're not going to win any low-bid contracts and you won't have any work.  Don't hate the player; hate the game.

3.  Some people brag that their company doesn't charge camp costs.  In such a situation, one needs to ask whether the company runs bush camps.  If there's no camp, and the company is not feeding employees, I would hope that there wouldn't be any camp costs.  You need to pay to eat, and there isn't much difference between spending money to buy groceries on a motel contracts versus paying camp costs when you're being fed in camp.  Well, there's one minor difference ... you don't spend an hour or more preparing food if you're being fed in a camp.

4.  A lot of people complain that we're the only industry that charges camp costs.  In other industries (oil & gas, logging), employees get paid to stay in camps.  Well, tree planting is also the only significant industry that compensates people via a piece-rate reward system (at least when it comes to operating remote bush camps). That's the key distinction which underpins the entire economic basis for our compensation system, and is the only real reason why camp costs can and do exist.  Again, eliminating camp costs would ultimately rob from the rich (the highballers) to give to the poor (the slow planters).  While that may seem "fair," any fast planter is going to prefer to look out for their own self-interest.  If you like the idea of getting paid more based on how hard you work, you should also be in favour of keeping the current camp-cost system.

They say that a person should pick their battles.  Overall, I'm fairly indifferent.  I can think of a lot of things that I'd like to improve within the industry.  I wouldn't be upset if camp costs were eliminated.  But instead of trying to eliminate camp costs, I'd rather focus on any of the many things that would ultimately benefit ALL planters.
 - Scooter


^1:  In the past, there has been some disagreement about whether or not GST can be included in camp cost charges.  This document clarifies:


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