Why is New Brunswick Addicted to forestry?Wednesday, January 30, 2008
Last week's full court press by the forest industry, personified by CEOs J.D. Irving, Kelly Shotbolt (of Flakeboard in St. Stephen) and Fraser Paper's Peter Gordon, had all the hallmarks of a big lobbying firm. At meetings with the editorial board of this paper and Premier Graham, their message, backed up by selective statistics, bordered on hysteria. Unless the province immediately reduces their power rates, opens up the public forest to more cutting, and reduces stumpage fees, all will be lost.
I am not disputing the difficulties the industry finds itself in. However, to lay the blame and the responsibility at the feet of the provincial government is a public relations tactic seemingly designed to extract ever greater concessions from the public purse.
The message is predictably reminiscent of the tactic Kenneth Irving used to extract a 90-per-cent tax reduction from Saint John Common Council for the LNG terminal, now under construction. Time is short; without the concessions all will be lost. Make the decision and deal with the implications later.
This behaviour is not unlike an addict looking for their next fix.
In a published paper called "Addictive Economies: Extractive Industries and Vulnerable Localities in a Changing World Economy" (well worth the read), rural sociologist William Freudenburg used an addiction analogy to describe remote rural communities dependent on natural resource extraction like forestry and mining.
Periods of good times mask the long-term downward trends (increasing costs, decreasing market price, increasing resource scarcity), like the occasional winning hand at poker table or euphoria from the fix. When the inevitable downward trend overwhelms the periodic wins, public concessions are inevitably extracted from governments loathe to face the trauma of addiction withdrawal.
The history of New Brunswick's forest industry is littered with previously successful efforts at extracting public concessions to prop up the industry. The last, most significant fix was in the early 1990s, when Premier McKenna abolished the requirement that mills must first buy wood from private woodlot owners, using Crown wood only as a last resort. Now the situation is reversed, forcing private woodlots to compete directly with cheaper public wood, with devastating impacts. Last year saw a 50-per-cent reduction in the volume of private wood sold, thereby reducing forest-related income to thousands of rural families by half.
The scale and scope of concessions in this latest list of demands is unprecedented in the 25-year history of the Crown Lands and Forest Act. The first is for a major subsidy of mill power rates, even as evidence before the Energy and Utilities Board has proven that industrial power rates have been continually subsidized by commercial and institutional customers.
Heavy industry, as a sector, is not paying its way on electricity. Now forestry companies want households to pay an extra $105 a year to underwrite their rate cut. In essence, they asked us all to cut a cheque - a charitable donation - to the Irvings or to distant shareholders. Alternatively, they want us all to pay through our taxes. If not an increase in taxes, then what public service will we beggar to do this? Either way, we pay.
We are also being asked to sacrifice limits on clear-cutting. Hard-fought victories which eked out minimal protections for rivers and streams, wildlife habitat and protected natural areas, even as the scale of cutting has ramped up, are on the verge of being lost. They also want the Crown wood allocations attached to mills that have been shut down recently. This means the wood will be shipped out to other mills rather than being available for new economic projects in communities that have lost their main employer.
The third leg of the concession stool is a reduction in stumpage fees paid on Crown wood, a further public subsidy.
How this might happen without triggering a U.S. trade challenge is a good question.
The stronger the addiction, the bigger each subsequent fix must be. Should we provide it, or should we put the industry in rehab?
Each time a crisis arises in global forest products markets, New Brunswickers are shaken down for more industry concessions.
Never has a government taken the time to analyze the cost of these concessions over the long term compared to the benefits, or to the alternative benefits had the money been invested in breaking our addiction to forestry mills.
Janice Harvey is a freelance writer and a long-time director of the Conservation Council of New Brunswick. She can be reached by e-mail at firstname.lastname@example.org. Her column appears on Wednesday.
JANICE HARVEY CIVIL SOCIETY Telegraph Journal January 30th, 2008