May 25, 2021
THE NEW BRUNSWICK GOVERNMENT’S APPROACH TO FORESTRY IS NOT ONLY MIND-BOGGLING BUT WILLFULLY BLIND.
“Governments are supposed to serve the people. It seems to me the only people the government is serving here are big forestry companies.
Premier Blaine Higgs and Natural Resources Minister Mike Holland are stubbornly sticking to their confounding policy of selling off Crown wood at bargain prices.
As consumers find themselves paying double or even triple the prices they paid just a year ago for wood products like two-by-fours and plywood, the price the government charges forestry companies to pay to harvest from Crown land hasn’t budged since 2015.
Make no mistake: the government is losing out on millions and millions of dollars by holding firm on its low royalty rates.
It’s clear to me that ordinary New Brunswickers are being hit twice.
SKYROCKETING PRICES
They are paying skyrocketing prices at lumber yards – in May 2020, the price of 2x4s was roughly $500 per thousand board feet, a year later it had climbed to $1,745.
They are also shelling out their hard-earned money to support public services that could otherwise be paid for or improved through Crown royalties.
Consider, for example, what increased revenue from wood could do to help eliminate the nursing shortage, improve long-term care for the elderly in this province. Consider the high taxes we already pay as New Brunswickers.
Governments are supposed to serve the people. It seems to me the only people the government is serving here are big forestry companies.
In its ongoing coverage of the issue, the CBC has been highlighting the disparity between lumber prices and Crown royalties, hitting the nail on the head with the question: “Wood has never been so valuable, so why aren't New Brunswick trees worth more?”
Linda Bell, general manager of the Carleton Victoria Wood Producers Association, gave voice to the frustration we’re all feeling. "It's absolutely ridiculous as far as I'm concerned," she said in an interview with the CBC recently.
NOT ON THE MINISTER’S RADAR
Finance Minister Ernie Steeves was at least candid in March when asked by the CBC why Crown royalties were not being increased to help the province’s bottom line.
"I'll tell you the truth, I'm not familiar on that one," he said.
It would appear this had not been discussed at the cabinet table, nor was it on the finance minister’s radar. Hopefully it is now.
WILFULLY IGNORES REALITY
Minister Holland and his officials contend that a steady royalty rate through the years is better because the government doesn’t lose money when the market is lower.
“Taxpayers, through the government, step up to support the industry when markets are down. But when the market is up, where is the payback?
That argument wilfully ignores the reality that the government routinely bends over backward to provide aid to mills – from subsidies to property tax breaks – when times are tough. And that’s not money the province likely ever sees again. Taxpayers, through the government, step up to support the industry when markets are down. But when the market is up, where is the payback?
And, as the CBC rightly points out, royalty rates have been cut in response to tough market conditions before. In the face of that disclosure, a department official said that if the cost of wood remains at these levels over the long term, the Minister would “re-examine” the file.
‘PERPLEXING DECISION’
That same story highlighted record revenues for forestry companies operating in areas of the country with much higher royalty rates than New Brunswick. In other words, royalty rates here could climb significantly and mills would still be profitable.
The story also cited a CIBC Capital Markets report that blamed depressed log prices in the province on the New Brunswick government’s “perplexing decision to leave royalty rates on Crown timber unchanged for the past six years.”
“It seems like there's a landlord in the province that doesn't want to collect their rents," the analyst behind the report remarked on a conference call, according to the CBC.
As Minister Holland waits, the only winners here seem to be the forestry companies.
NEW BRUNSWICKERS NOT GETTING MORE
Our members – the 42,000 private woodlot owners of this province – sure aren’t getting any more for their wood. Neither are the people working in the forests cutting the wood or the truckers hauling it away.
One might be able to rationalize the
government’s singular thinking on this issue if this were just a blip. But this is no blip. Lumber prices across North America have rocketed up with no relief in sight. Some believe we’ll be living with these prices for years.
These are extraordinary times, and instead of acting for the people, the government is sitting on its hands.
It’s inexcusable.
Urge Premier Higgs and his government to act. Contact the Premier and his cabinet today to let them know this unfairness must end.
Thank you,
Rick Doucett President, New Brunswick Federation of Woodlot Owners