July 29, 2021
AS PRICES FOR LUMBER AND OTHER WOOD PRODUCTS HAVE SOARED, WE HAVE SEEN NONE OF IT. IT’S THE ULTIMATE INSULT – A SLAP IN THE FACE FOR THESE HARD-WORKING NEW BRUNSWICKERS WHO HAVE ONLY EVER ASKED FOR FAIRNESS.
John Sabine recently gave voice to the frustration felt by 42,000 New Brunswickers who, like him, are woodlot owners in this province.
“I was getting more money for my wood in the 1990s. A lot of people aren’t bothering to harvest at all...It’s not worth it. — John Sabine
“I was getting more money for my wood in the 1990s,” John Sabine, who owns a woodlot in Passekeag, told the Globe and Mail. “A lot of people aren’t bothering to harvest at all because prices are so poor. It’s not worth it.”
Woodlot owners right across this province are frustrated, to put it mildly. As prices for lumber and other wood products have soared, we have seen none of it. It’s the ultimate insult – a slap in the face for these hard-working New Brunswickers who have only ever asked for fairness.
NEW BRUNSWICKERS PAY THE PRICE
So who benefits? Industry does.
And who pays the price? The people of New Brunswick.
Government after government in this province has bent over backwards to ensure mill owners reap the rewards, never mind the costs to anyone else.
In good times – like today – forestry companies enjoy the benefits of skyrocketing prices.
In bad times, governments rush to give them subsidies or tax breaks meant to tide them through. These schemes are portrayed as temporary but they never are.
MILLIONS OF DOLLARS IN SUBSIDIES
“A subsidy program that was brought in more than 9 years ago to help mills weather a tough market has never disappeared.
CBC New Brunswick’s Robert Jones has done stellar work shedding light on the unfairness in this province’s forestry system. Recently, he revealed how nearly $10 million in energy subsidies went to six mills over one year through NB Power, even while the provincially owned utility is losing money, and nearly $5 billion in debt.
This is a subsidy program that was brought in more than nine years ago to help mills weather a tough market. It has never disappeared.
In fact, Mr. Jones reported that the mills have received more than $100 million in energy subsidies since the program began in 2012.
Who is paying the price for these subsidies? New Brunswickers.
TURNING A BLIND EYE
This is a painful example of how there seems to be no limit on what governments in this province will do to help out big forestry companies.
There seems to be no end to what they will do to ensure that mill owners – the wealthiest players in the forestry sector – thrive while turning a blind eye to the rest of us.
Industry also benefits from the low royalty rates government charges them to cut down Crown wood. As other provinces set higher rates reflective of market value, New Brunswick rates have not changed since 2015.
This refusal by our government to revisit royalties has cost the New Brunswick treasury millions of dollars in revenue – money that could go to fund hospitals, schools, care for the elderly in nursing homes, and to pay down government debt. Instead, taxpayers are left on the hook.
UNFAIR SYSTEM FAVOURS MILL OWNERS
The low prices for Crown timber also depress what private woodlot owners like John Sabine get for their wood. In other words, woodlot owners are competing with a government that unabashedly favours mill owners. And it is the government that makes the rules.
Nothing illustrates the unfairness of New Brunswick’s system more starkly than comparing it to other provinces.
Like Nova Scotia, where woodlot owners are paid significantly higher prices than we are for the same wood. They even get higher prices from the same companies we deal with, which highlights the seriousness of the market issues here.
Like Alberta, where Crown royalty rates fluctuate with market demand. In that province, the government reported more than $400 million in royalty rates and timber fees for the year ending March 31, 2021 – four times what it had budgeted, thanks to the rising demand and prices for lumber.
PROMISE OF REFORM
Alberta says its policy ensures that as profits rise for mill owners Albertans receive a fair return for their public timber.
Here in New Brunswick, Natural Resources Minister Mike Holland argues that keeping the Crown royalty rates consistent from year to year is better than fluctuating with the demands of the market.
Interestingly, the Minister told the Globe and Mail that he’s looking at legislative changes to restore balance to the forestry sector, including a levy system for when prices soar.
“There’s a public perception that governments have done nothing but appeal to industry,” he told the newspaper. “I want to try to address it. We’re committed to putting together a forestry plan that has a number of targets … whereas before, maybe that balance wasn’t there.”
There is a reason for the public’s perception that government favours industry – because it is true.
WILL THEY KEEP THEIR WORD?
I, for one, am curious as to what the Minister has in mind for reform. The only reform we’re aware of is his department’s plan to create a single wood marketing board for the province.
Quite frankly, that will not fix all that is wrong with our system today.
“Both Minister Mike Holland and Premier Blaine Higgs have been promising since 2018 to restore balance and fairness — we look forward to the day they keep their word.
Both he and Premier Blaine Higgs have been promising since 2018 to restore balance and fairness – we look forward to the day when they keep their word.
It’s well past time for action – action that not only brings fairness to private woodlot owners but to all New Brunswickers.
Because it is all New Brunswickers who have paid the price all these years.
Rick Doucett President, New Brunswick Federation of Woodlot Owners