STRONG WOOD MARKETING BOARDS BENEFIT ALL
February 1, 2019
In New Brunswick today, we seem to be on a wayward journey back to the 1950s. Back to an era where captains of the forestry industry and favoured contractors held a virtual monopoly on wood supply.
A woodlot owner wanting to earn money from their lands had little, if any, choice of who to sell to and had no choice but to accept the price offered. There was no room for negotiation and no fairness for the hardworking woodlot owner.
“There are 7 wood marketing boards blanketing New Brunswick today, each originally empowered to help woodlot owners sell their wood to forestry companies that need it.
Out of this oppression grew a restlessness for a better way – a system that would be based on fairness, on real negotiation and on prices that reflected value, not just what the mills felt like paying. A system that would allow all woodlot owners a voice at the negotiating table.
WHERE DID MARKETING BOARDS COME FROM?
Out of that restlessness came several plebiscites throughout New Brunswick which saw woodlot owners vote in favour of the formation of wood marketing boards backed by government and empowered by legislation to negotiate on behalf of woodlot owners big and small.
They realized the value in joining together and witnessed how the collective could in itself create a healthy market for their wood and ensure fair prices.
There are seven wood marketing boards blanketing New Brunswick today, each originally empowered to help woodlot owners sell their wood to forestry companies that need it.
Created between 1971 and 1981, they operate without profit and act essentially as professional agents for woodlot owners wishing to sell wood to industry while providing valuable stewardship advice to woodlot owners.
HAS THE NEED CHANGED SINCE THEY WERE CREATED?
“The provincial government mandated that industry make private wood the primary source of their supply and could only cut on Crown lands if not enough private wood was available.
For those of us inside this system today, it is easy to forget that not everyone understands what wood marketing boards are and the value that they bring. It is important, as we fight for long-overdue reforms to the Crown Lands and Forests Act governing forestry practices in this province, that we ensure people understand how vital wood marketing boards are to our industry.
For years, marketing boards have:
fostered a healthier trade in wood at better prices for woodlot owners and producers,
uncovered new markets for New Brunswick wood,
ensured consistency of supply for the forestry companies, while respecting sustainable harvest levels,
supported woodlot owners by providing expert advice on how to tend to their lots according to the owners’ goals rather than the self-serving advice from buyers.
The provincial government, which created the marketing boards, mandated that industry make private wood the primary source of their supply and could only cut on Crown lands if not enough private wood was available.
BALANCE WAS BROKEN IN 1992
After intensive lobbying from the forestry industry, the government of Frank McKenna changed the legislation in 1992 to allow industry to skirt marketing boards and buy directly from woodlot owners, undercutting the wood marketing boards and all the gains they had made. The foundation that the Act was built upon was compromised.
As economic shifts have battered the forestry sector, mills shuttered and companies went under or left the province. The decline, coupled with the deliberate undermining of marketing boards, has eroded a once competitive market for our wood and lead to a decline in prices. While the remaining forestry companies have increased their reliance on cutting Crown forests, they actively circumvent marketing boards and resort to dealing one-on-one with woodlot owners to drive prices lower.
The sad fact is that with marketing boards hobbled, companies can play one producer off against another, searching out the ones most desperate to sell and low-balling the offer just because they can. When companies don't have to deal with marketing boards, the game is tilted in their favour.
BIG BUSINESS WILL NATURALLY SEEK EVERY ADVANTAGE
Let’s not kid ourselves – big business is doing what it has always done to ensure its success.
And that’s to seek every advantage, to cut costs and to boost profits. They lobbied government hard for changes to the system and for greater access to Crown wood.
It is costing New Brunswick dearly.
“We need to right the power imbalance between the forest industry and producers, notably the 42,000 woodlot owners in this province.
You’ve heard me on this point before: both the Auditor-General and CIBC World Markets have pointed out to the provincial government that it is losing millions of dollars every year by not managing Crown forests properly. In fact, CIBC says the mismanagement is costing New Brunswick an astounding $100 million a year.
It is hard to imagine that Premier Blaine Higgs, with his strong focus on this province’s finances, will allow this to continue. Indeed, we know from the election campaign that he wants an overhaul of the Crown Lands and Forests Act. We also know that the Green and People’s Alliance parties see the need for change too, so we look forward to meaningful reform.
Meaningful reform that includes righting the power imbalance between the forest industry and producers, notably the 42,000 woodlot owners in this province. Meaningful reform that encourages healthy and diverse competition within the industry, restores competitive pricing, and allows all of us as New Brunswickers to earn – rather than lose – money from our Crown resources.
As part of meaningful reform, the government needs to re-empower the marketing boards that have done so much over the years to foster a healthy and profitable market for wood. If you agree, I urge you to let government know. Contact Premier Higgs and Minister of Energy and Resource Development Mike Holland to let them know.
Tell them it is time for fairness in forestry.
Thank you for listening,
Rick Doucett President, New Brunswick Federation of Woodlot Owners