THE WASTED POTENTIAL IN OUR WOODS
May 31, 2019
Over the past many months, I have written about various issues affecting our members, the 42,000 woodlot owners in New Brunswick who are disadvantaged seemingly at every turn. We struggle to get a fair price from mills. We are frustrated by the inaction of governments, which historically have ignored their own regulations to give the advantage to big industry.
In my last blog post, I noted how the softwood dispute with the United States is costing New Brunswickers upwards of $100 million, largely in the form of punishing duties from Americans who have taken a dim view of the uncompetitive conditions in the forestry industry in this province.
But that is just the beginning of troubles that are costing New Brunswickers dearly. I want to share with you the story of one woodlot owner, a dedicated man of the forest with more than 50 years of experience, a man of deep knowledge and passion for the woods.
GOVERNMENT ALLOWS INDUSTRY TO TAKE FROM CROWN LANDS AT DEPRESSED PRICES
In many ways, Andrew Clark’s story parallels that of so many I know – honest and hardworking with an abiding love for the forest. A commitment to the future through sustainability and responsible stewardship. Moreover, care for the province and the value of our forest resource.
“I just leave it there. Before, I would have definitely harvested it if I was making any money at all.” — Andrew Clark
Living in the Hartland area, he owns 175 acres of woodlot across three parcels. His grandfather, father and uncle all worked in the woods and often invited him along as a boy. Clark, now 70, has twice served as president of New Brunswick Federation of Woodlot Owners.
These days, Clark sells hardwood pulpwood and logs. Softwood once destined for pulp mills around the province remains – it is not worth cutting down. In fact, he would lose money if he did harvest it, given what pulp mills in New Brunswick will pay for it.
“I just leave it there,” he says. “Before, I would have definitely harvested it if I was making any money at all.”
These days, Clark says there is a huge difference between what New Brunswick mills pay suppliers like him and what they fetch for the northern bleached softwood pulp they produce from it.
The mills, he says, typically pay $38 to $45 per tonne for the wood. After running it through the mills and converting it to pulp, Clark notes, they are able to sell one tonne of pulp for more than $1,600. Even considering that it takes two tonnes of wood to make one tonne of pulp, that’s a yawning difference.
Given norms in the industry, mills can spend some 25 per cent of the selling price for pulp to buy wood and still make a profit – Clark says that should mean mills can pay up to roughly $200 a tonne for the softwood and still make money.
“Even with the increased transportation costs, the private woodlot owner is probably doing about $20 a tonne better by selling it to Nova Scotia.” — Andrew Clark
As a man of business himself, he realizes that the mills are simply paying according to what the laws of supply and demand dictate. Demand has declined and supply has climbed with the closure of several mills in the province over the years.
Hence today’s sagging price for softwood – about half of what he would have been paid at peak times in the late 1990s, when the dollar would buy a lot more than it can today and fuel prices were dramatically lower.
He questions why today a mill in Nova Scotia will pay $95 a tonne, more than double what New Brunswick mills do.
“Even with the increased transportation costs,” he says, “the private woodlot owner is probably doing about $20 a tonne better by selling it to Nova Scotia.”
Clark doesn’t fault industry but places much of the blame at the foot of the provincial government, which in recent years has allowed industry to take more and more trees from Crown lands at depressed prices.
In essence, private woodlot owners today face a goliath of a competitor in the provincial government. The very government which – by law and regulation – is supposed to be encouraging private woodlot markets and sales.
FOREGOING OPPORTUNITIES TO EARN FAIR REVENUES FROM OUR CROWN FORESTS
Not only that, but our debt-laden province is foregoing opportunities to earn fair revenues from our Crown forests – a point that has been underscored for government by the independent watchdog of the Auditor General’s Office.
Clark notes that a 2010 study by CIBC World Markets on our forest industry said the provincial coffers should be getting $100 million a year from harvesting on Crown lands. How much does the government earn? Next to nothing, according to the Auditor-General.
I have to agree with Clark’s assessment here – the taxpayers of New Brunswick are getting “ripped off.” Previous governments have turned a blind eye. We hope Premier Blaine Higgs, with his determined focus on New Brunswick’s finances, will tackle it.
“I have to agree with Clark’s assessment here – the taxpayers of New Brunswick are getting ‘ripped off.’ Previous governments have turned a blind eye. We hope Premier Blaine Higgs, with his determined focus on New Brunswick’s finances, will tackle it.”
“If you look at the recent announcements of this government, they are cutting back on expenses – they are not fixing this building, they are not doing this, they are not doing that, in order to not spend money. And I don’t argue with that in a way,” Clark says.
“That means there isn’t enough money for nursing home workers. That means there isn’t enough money to get more nurses into hospitals, there isn’t enough money for new arenas,” he says.
“Well, here is $100 million a year more revenue than they are getting today that I absolutely believe is available to them if they have the courage to take it.
“And that’s what irritates the heck out of me. It irritates me as a woodlot owner that I can’t get a decent price for my pulpwood. But more than that, as a citizen of New Brunswick, looking around at the things that aren’t being done, the deficits that are being run and the amount of interest we are paying on our debt, that should just make you sick. I know it does me.”
Thank you for listening,
Rick Doucett President, New Brunswick Federation of Woodlot Owners