New
Brunswick forest companies earned a record $3.2 billion in revenue over
the last 24 months ended in May turning trees into lumber. The industry
had never made as much as $2 billion in any prior 24 month period. (CBC)
New
Brunswick's second-largest private landowner believes the amount forest
companies pay for trees could soon rise substantially for every seller
as the province raises prices for Crown-owned wood.
In a
conference call with investment analysts, Acadian Timber Corp. president
Adam Sheparski said private sellers of wood in New Brunswick may not
get exactly the same price increases government has announced for itself
but it could be close.
"We're thinking, you know, in the next few
quarters, we're going to start seeing prices start to increase as a
result of the royalty rates going up," Sheparski said during the call
Thursday.
"Demand is going to drive a fair bit of this, but with
the stumpage rates coming up, you know, I'm not sure we're going to be
able to capture it all, but we're sure hoping to capture a lot of it."
Adam
Sheparski is president of Acadian Timber. It's the third-largest
landowner in New Brunswick after the province and J.D. Irving Ltd. He
told stock analysts this week that all sellers of wood in New Brunswick
should benefit from higher Crown timber fees. (LinkedIn)
Acadian
Timber owns timberland in the United States and Canada, including
308,000 hectares in northwestern New Brunswick. It is an area about half
the size of Prince Edward Island and makes the company the
second-largest private landowner in the province behind J.D. Irving
Ltd.
Like many private owners of timberland in New Brunswick,
Acadian has struggled to get higher prices for wood it sells, despite
record earnings being made by mills that buy it.
In financial
figures released Thursday, the company reported it made about 14 per
cent less from its softwood sales in New Brunswick per cubic metre
during the spring than it did in Maine and about 15 per cent less from
hardwood after adjusting for exchange rates.
But that may change soon.
Earlier
this month New Brunswick Natural Resources Minister Mike Holland
announced that after more than a year of resisting the idea, the
province would be raising rates it charges forest companies for trees
they buy from Crown land.
It's the first increase in provincial timber fees in seven years.
Slightly
more than half the wood New Brunswick forestry companies use in their
operations is owned by the province. The rest comes from a variety of
sources, including industry's own forest holdings and thousands of
independent suppliers, including Acadian Timber.
Sheparski
told analysts Crown prices are increasing on all high and low-value
hardwoods and softwoods by amounts ranging from 40 to 79 per cent.
That's
expected to raise an additional $50 million in timber fees this year
for the province, and Sheparski said those higher prices should trigger
increases in the private market for wood for everyone.
"Crown
rates will come up and then we'll start to see, I suspect, the prices
for not only private woodlots, but also for us to go up as well," he
said.
Two weeks ago, Statistics Canada reported lumber production in May in New Brunswick was worth $186.8 million.
That
raised total lumber production over the last 24 months to a record $3.2
billion. New Brunswick lumber mills had never made $2 billion in any
24-month period prior to that.
Robert
Jones has been a reporter and producer with CBC New Brunswick since
1990. His investigative reports on petroleum pricing in New Brunswick
won several regional and national awards and led to the adoption of
price regulation in 2006.
Filmmaker Charles Thériault’s passion is observing. His troubling
encounter with a young man in the northern rural New Brunswick community
of Kedgwick made him turn his camera on the forest. The result: a popular web series documenting decades of forest mismanagement and what he calls “corporate capture” of our forest.
Thériault’s impression that all was fine in New Brunswick’s woods was
shattered when he met a 26-year-old man who had tried to commit
suicide. The man was $1 million in debt, a debt he had accrued from
working as a contractor, cutting wood for J.D. Irving, the largest
forestry player in the province. According to Thériault, the contractors
are in a perpetual debt cycle of taking out loans to buy new machines.
Thériault spoke with several contractors who had their loans for new
machines co-signed by J.D. Irving. These types of systems, in which
workers have their financial affairs tied to the company they work for,
are ripe for exploitation. “It’s a system of slavery-like control over
the workers,” claims Thériault.
About 100 students, professors and others concerned about the state
of New Brunswick’s forest filled a room at St. Thomas University (STU)
in Fredericton on Oct. 16 to hear Thériault share his story.
STU professor Joan McFarland invited Thériault to speak to her New
Brunswick Economy class and the public. “We are using, as class
materials, the fascinating 28 videos on his blog, isourforestreallyours.ca.
The videos expose the disastrous situation of the Crown forest in New
Brunswick. We felt that he would have something important to say. We
weren’t disappointed,” says McFarland.
New Brunswick’s land base, which has never been ceded by the
Wolastoqiyik, Mi’kmaq and Passamoquoddy peoples, is carved out as 50 per
cent public land (also known as Crown land), 30 per cent private land
and 20 per cent freehold. The New Brunswick government is tasked with
managing the public forest in a way that benefits all New Brunswickers
but many like Thériault argue that private interests are largely
benefiting from forestry practices today.
Forestry has been a main source of jobs and way of life in many rural
communities across New Brunswick for generations. The closure of many
mills across the province in the early 2000s devastated many
forestry-dependent communities. However, as mills closed and people were
thrown out of work, wood continued to be cut from New Brunswick’s
public forest in record volumes. The Conservation Council of New Brunswick reported that timber harvested from public land reached a record high of 5.4 million cubic metres from 2006 to 2007.
Intensive industrial practices, such as clearcutting and conversion
of natural forests into plantations, have also not sat well with people
from across the province. In 2015, the Auditor-General of New Brunswick recommended reducing clearcutting on Crown forest. A 2008 survey of public attitudes on Crown forestry management by
Nadeau and Beckley noted that participants–from both rural and urban
areas of New Brunswick–wanted water protection and biodiversity
protection to be the top two forest management priorities. Participants
chose jobs as the third priority.
“New Brunswickers do not trust the forest industry to manage Crown Lands.” Episode 5 of Is Our Forest Really Ours. Produced by Charles Thériault.
Thériault, who has travelled the world, producing media for the
National Film Board and the Discovery Channel, says that his time spent
working inside government when Frank McKenna was the Premier of New
Brunswick opened his eyes to “how important decisions were being made in
the backroom.” He remarks, “this was not my kind of politics so I left
politics for filmmaking.”
Thériault was raised in what he describes as an “Acadian ghetto in
Moncton,” Georgetown. He recalls the paved roads and services ending
just outside Anglophone Moncton. He eventually settled in the rural
northern New Brunswick community of Kedgwick with his wife, Betty St.
Pierre, who he says, “taught him how to stand up.” In 2009, St. Pierre
organized a petition to stop spraying the forest after she said she and
other forestry workers were sprayed.
In a story reported by the NB Media Co-op in
2009, St. Pierre said, “A man reported fish kills along a stream here
after the last spraying. It is not normal to do that to the forest. We
can’t prove we are sick because of the spraying but cancer and
pesticides have been linked. People are starting to question why do so
many people in our community, in Northern New Brunswick, have cancer and
rare cancers.”
“Where were the journalists?” questions Thériault. “I approached
several reporters in the province about these stories of forest
mismanagement. I was told that I was too controversial. I spoke the
truth. They were too afraid,” says Thériault.
“I knew I had to report on what was happening in our woods because
the press was not doing it,” says Thériault. He set out to do what he
calls a “social awareness raising experiment.” Supported by the New
Brunswick Federation of Woodlot Owners, the filmmaker produced a number
of online videos with people who had critical things to say about
forestry practices in New Brunswick. The popular videos can be watched
online at isourforestreallyours.ca.
Outdated forestry legislation that benefits large industrial
interests is a main culprit behind forest mismanagement in the province,
according to forestry experts, conservation groups and woodlot owners
as reported in the Conservation Council’s 2017 Forest Report Card.
However, getting the story of forest mismanagement told has been
difficult in a province where J.D. Irving, Ltd. owns a large portion of
the media.
The popularity of Thériault’s short videos and NB Media Co-op’s stories on spraying the forest reveal
that people are hungry to hear the forest story in New Brunswick from
the point of view of the small woodlot owners, forestry workers,
scientists and conservationists. “After my first few videos, I started
getting contacted by retired Deputy Ministers of Natural Resources who
were now free to talk,” notes Thériault.
Don McCrea explains how the 1982 N.B. Crown Land and Forest
Act came into being and why he refused to accept the post of Deputy
Minister of Natural Resources. Episode 11 of Is Our Forest Really Ours. Produced by Charles Thériault.
Besides J.D. Irving, “other private interests are making tremendous
amounts of money from our forest while we, the public, feel the pain,”
says Thériault. The Auditor-General’s 2015 report affirms Thériault’s
claim: Kim MacPherson’s audit of the Department of Natural Resources finances, from 2009 to 2014, revealed that the province had lost between $7 to 10 million each year on our public forests.
In perhaps his most popular video, Thériault tells the story of how
forestry management was redesigned in ways that benefited companies that
are associated with Bud Bird and Frank McKenna.
In Episode 9 of Is Our Forest Really Ours, Charles Thériault
discusses the involvement of Frank McKenna and Bud Bird in forest
management in New Brunswick. Produced by Charles Thériault.
According to Thériault, Bud Bird, a well-known businessman and former
Progressive Conservative politician, while Minister of Natural
Resources under the Hatfield government, “essentially privatized the
Crown forest by dividing the land into ten timber licenses in 1982.”
In response to concerns of woodlot owners, the Crown Lands and Forest
Act was amended in 1982 to say that the industry’s primary source of
wood fibre had to come from private woodlots. The big players in the
forestry industry objected to the new power given to woodlot owners and
their marketing boards but Bird was able to console the industry by
consolidating 483 parcels of Crown land into ten licenses. Today, only
four companies, all large, multinational corporations, control Crown
forest. J.D. Irving is the largest Crown forest licensee. Theriault
argues, “This system has impoverished New Brunswick.”
Frank McKenna, while Premier of New Brunswick, changed the Act by
striking the woodlot owners’ guarantee of primary source of wood supply
to the province’s mills. Woodlot owners have been fighting ever since
1992 to have the market advantage returned to them. They say they are
not able to compete with cheap Crown wood and they point to the
overcutting of the public forest as one symptom of a broken forest
management regime.
McKenna and Bird entered again in Thériault’s storytelling of New
Brunswick’s forest history. In 2009, Fraser Papers, that owned the mill
in Edmundston, filed for bankruptcy protection with the Canadian and
American governments so that it could restructure. At the time,
Brookfield Asset Management was the majority shareholder of Fraser
Papers. McKenna is a long-time board member of Brookfield, a company
that denied 450 retired mill workers in Edmundston their full pensions.
The restructuring of Fraser Papers involved splitting the company
into two new companies: Acadian Timber and Twin Rivers. Bird is a former
board director of Acadian Timber. According to Acadian Timber’s
website, today, the company is the “second largest timberland operator
in New Brunswick and Maine.” Twin Rivers operates the Edmundston mill
and is one of the companies that the Alward government signed a
controversial and unprecedented contract with in 2014 that allowed the
company to cut an increased amount of wood from their Crown land license
every year.
Frustrated by a political system that is captured by corporations,
Thériault ran in the last two provincial elections, first as an
independent and more recently, in the September 2018 election, as a
Green Party candidate for Restigouche West. In that election, he came in
second, with 31.5 per cent of the vote.
What is Thériault’s vision for rural New Brunswick? He says that
decentralization is needed to restore community involvement.
Decentralization involves local decision-making bodies having more power
and responsibilities over resources such as the forest as well as
health care and other public services. He says rural New Brunswick also
needs to grapple with climate change and that resilient forests and food
security should be at the top of our collective agendas.
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