Thursday 19 January 2023

Province promises N.B. forest report by April after seven years of missed deadlines

 

Province promises N.B. forest report by April after seven years of missed deadlines

Green leader says department first promised report in 2016 and raps lack of ‘annual plan’

Tom MacFarlane, the deputy minister of natural resources and energy development, acknowledged that his department has missed several deadlines it gave itself, starting in June 2016, to finish and publish the report. 

He made the new commitment after Green Leader David Coon hammered the department for repeatedly promising the report and then not delivering it.

"Delay after delay after delay after delay," Coon said during a meeting of the legislature's public accounts committee.

"The question is, Mr. MacFarlane, what is it you don't want the members of the public and this legislature to know about the state of our forest?"

No annual plan

Earlier in the morning, Coon also forced MacFarlane to admit that the department had not published an annual plan listing its objectives — a plan required under provincial law to be posted on the department's website.

"I'm not aware as to why we haven't published an annual plan," MacFarlane said.

He said the department has been using a mandate letter from Premier Blaine Higgs as a guide — though he didn't realize that mandate letters are kept confidential by the current government.

"I guess I thought they are made public centrally, and I'm told they are not public," he said. "But we have not produced an annual plan."

Mandate letters are given by a new premier to each new minister and their department, outlining the government's priorities.

Liberal premier Brian Gallant made them public for the first time in 2014 but current Premier Blaine Higgs has reverted to not releasing them.

The province's Accountability and Continuous Improvement Act requires departments to publish annual plans laying out their objectives for each fiscal year.

That allows the department, MLAs and the public to compare the plan's objectives to results laid out in a subsequent annual report.

Why plan is needed

With a report but no plan, Coon said, "it's extremely difficult for us to do our work in holding the department accountable in how it uses tax dollars if we don't know what those goals and objectives in the plan are."

The act says departments "shall" prepare an annual plan to "set out the goals and objectives" during a given year and establish "a strategic direction," then "identify objective performance measures" for those goals.

It also says the minister for the department "shall make the annual plan public by publishing it on the department's website" within three months of the start of the fiscal year.

'Delay after delay after delay after delay,' said Green Party Leader David Coon of a forest report promised seven years ago. (Jacques Poitras/CBC)

On the state of the province report, Coon said the last one was in 2008 and pointed out the auditor general recommended in 2015 that the department issue new versions more frequently to report on how forests are being managed for ecological sustainability.

Coon said the department committed to a new report by June 2016, told him in 2017 it was "coming soon," assured him in 2019 that it would be tabled in the legislature in 2020, and in 2021 told him it would be ready that summer.

He said there was then another promise it would be done in 2022.

"Certainly there's been a number of things that have impacted our ability to deliver that report," MacFarlane said.

"I can promise you that that report is in draft form right now and we are anticipating to get that out this fiscal year."

Department has other priorities

He blamed "limited staff" for the delay and a focus on other more important programs.

"I can apologize for missing our targets and notions of the past, but certainly we've been prioritizing a lot of our initiatives," he said.

"It's limited resources that we have, and we try to make sure that we're focused on the items that require the highest priority." 

Assistant deputy minister Chris Ward added that the raw data that would be used in a state of the forest report is available on the department's online open data portal.

"There's no hiding data," Ward said. "For those that are interested in data, it's online."

The discussion with Coon over missed deadlines is the latest in a series of exchanges between the Green leader and the department.

In 2020 he chided MacFarlane for the department for not having produced an emissions-reduction strategy three years after the release of the province's climate change plan.

During that session, department officials also said New Brunswick would miss its goal of having 2,500 electric vehicles on the province's roads by the end of 2020. There were only 429 at the end of 2019.

On Wednesday, MacFarlane was able to report that the province is on track to meet its next EV target of 20,000 by 2030.

He said supply chains were a problem until last fall but are showing signs of improvement now, with more electric vehicles available for sale now and federal and provincial rebate programs helping to spur sales. 

"We're seeing our numbers increase significantly so we're very hopeful that holds," he said.

ABOUT THE AUTHOR


Jacques Poitras

Provincial Affairs reporter

Jacques Poitras has been CBC's provincial affairs reporter in New Brunswick since 2000. He grew up in Moncton and covered Parliament in Ottawa for the New Brunswick Telegraph-Journal. He has reported on every New Brunswick election since 1995 and won awards from the Radio Television Digital News Association, the National Newspaper Awards and Amnesty International. He is also the author of five non-fiction books about New Brunswick politics and history.

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60 Comments
 
 
David Amos
Methinks we should not hold our breath waiting for another April Fools Joke the NB Power rate hike due that day will be enough to cause a lot of folks to faint anyway N'esy Pas?
 
 
 
David Amos
 
Methinks its rather amusing watching all the comments come and go N'esy Pas?
 
 
 
 
Greg Meahan 
DMs know what is made public and what is not. It is not credible that this one did know his mandate was private. Not at all. That or he is completely and utterly incompetent. It is one of those situations where there is no in-between. 
 
 
David Amos     
Reply to Greg Meahan
Go Figure 
 
 
 
 
Kyle Woodman 
Where is Mike Holland? The buck stops with him. Does he even live in New Brunswick anymore?
 
 
David Amos     
Reply to Kyle Woodman  
Who cares? 
 
 
 
 
Jimmy Belafonte 
Report findings- Irving is grifting NB. 
 
 
David Amos
Reply to Jimmy Belafonte
LOL


David Amos     
Reply to Jimmy Belafonte
Thats my favourite comment today  
 
 
 
 
Jim Johnston 
  
Forest management in NB is a joke. Essential information is held back and it is very difficult to clearly analyze it. It comes down to the fact that we pay more out to manage the forest than we receive in revenue from selling the wood. The only viable solution I see is to keep what we want for recreational and environmental issues and sell off the rest to the federal government who could use it to settle up with our First Nations.  
 
 
David Amos
  
Reply to Jim Johnston
Surely you jest  
 
 
 
 
 
John Grail 
Guessing this isn't a top priority for the Irvings... 


Jos Allaire 
Reply to John Grail
It is! a priority They don't want a report. 


David Amos
 
Reply to Jos Allaire
Methinks that order can be found within MacFarlane's confidential mandate letter from Higgy N'esy Pas? 
 
 
Jack Bell
Reply to John Grail  
If Irving is against it, then you know it's good for NB  
 
 
Jos Allaire 
Reply to David Amos 
You got it Dasvid!  
 
 
David Amos
  
Reply to Jos Allaire
BTW I have no doubt lots of folks heard MacFarlane mention the confidential mandate letter on CBC this morning
 
 
 
 
 
 
Peter Churcher  

David Coon is always trying to find a conspiracy. I doubt that if we ever had him lead the province that he would do any better. One simply has to drive around our Province and despite reports to the contrary we do have a lot of trees. Tens of thousands of acres of trees. 
 
 
Rosco holt
  
Reply to Peter Churcher
Allot of trees that is shipped to the states. 
 
 
Peter Churcher
  
Reply to Rosco holt
Yes but without the forestry business and there revenue it brings in we would be a lot worse off.
 
 
Dan Lee
  
Reply to Peter Churcher
what revenue? we are paying them to cut our wood...... jesus   
 
 
Robert Buck
  
Reply to Peter Churcher 
I think you missed something on the revenue the forestry brings in. Ask the private woodlot owners.  
 
 
Peter Churcher
  
Reply to Dan Lee
Not to debate the obvious but the forestry industry also employs thousands of New Brunswickers and yes they do pay us money to harvest timber on Crown lands. Do you advocate that we get rid of one of our only industries? 


Dan Lee
  
Reply to Peter Churcher 
they pay us? hen....sh..t.........we pay them to cut......plant.......pour poison on them........i can show you plantations of a certain company with big big timber........  
 
 
Al Clark
 
Reply to Peter Churcher 
Well there ya go.

NB Forest report

"thars A lot of trees"

Hit print and it's miller time!

Pshew that was 7 yrs haaaard work 
 
 
Dennis Atchison 
 
Reply to Peter Churcher  
Yes. My interview with Ken Hardie, then the General Manager of the Small Woodlot Owners Federation, detailed clearly how we citizens were subsidizing big industry and as you say, "... paying them to cut our wood". Here is the interview in case no one believes "facts" ... https://www.youtube.com/watch?v=PC5ZbC78a6U 
 
 
Don Corey 
Reply to Dan Lee
Yes, the forest industry does pay royalties. No, we don't "pay them to cut". Yes, the department reimburses Licensees for necessary silviculture conducted on crown lands; that has been the case since the Crown Lands and Forests Act back around 1981, so nothing new here. As to the "poison", that's your word for it.....not mine.  
 
 
James Hickey 
Reply to Don Corey 
we lose money on our crown forests , how can anyone lose money selling wood
 
 
Don Corey 
Reply to Dennis Atchison 
Ken Hardie is a smart guy, but he also has his own agenda; and it's generally in conflict with the forest industry. Then there is the department, which sets annual crown royalty rates. The "facts" are far more complicated than Hardie's take on the situation. However, he is absolutely right on about royalty rates (especially for sawlogs.....softwood and hardwood). They are way TOO LOW.  
 
 
James Hickey 
Reply to Don Corey 
who do you work for   
 
 
Don Corey  
Reply to James Hickey
I'm retired. No, I didn't work for Irving, or DNR, but I do know what I'm talking about.
 
 
Don Corey
Reply to James Hickey
Good question. Our crown lands should be managed as a net source of revenue to the province. For example, what used to be Fraser Freehold land (over 700,000 acres) in NW NB is now owned and managed by Acadian Timber. They generate a significant profit every year, selling their wood to mills in NB and Maine as well as providing recreational opportunities (at a cost) to the public. 


David Amos
Reply to Don Corey
Amen 
 
 
David Amos
 
Reply to Don Corey 
"I'm retired. No, I didn't work for Irving, or DNR, but I do know what I'm talking about."

Me too

 
David Amos
 
Reply to Peter Churcher
Say Hey to Mikey Holland for me will ya? Tell him I know why he never voted for me. 
 
 
David Amos

Reply to Dan Lee
Amen 
 
 
David Amos
 
Reply to Dennis Atchison 
Methinks its interesting that you are allowed to promote yourself N'esy Pas?
 
 
David Amos
Reply to Rosco holt
Bingo
 
 
 
 
 
 
Richard Ames 
Irving doesn't like to share information. As leader of the Green Party, he should know that. 
 
 
Rosco holt
Reply to Richard Ames 
Just like the Irving Premier. Data shmata.  
 
 
Sam Smithers 

Reply to Richard Ames
PCs getting data delivered that the Liberals did not, what else is new.  
 
 
James Hickey
Reply to Rosco holt
Frank McKenna and bud bird started the giveaway so do not blame higgs although he has not fixed it 
 
 
David Amos

Reply to James Hickey
What you say is true about Franky Boy and his many cohorts not just his buddy Bird. However our little Lord promised if he were to be elected to reverse the foul play practiced against private woodlot owners and their fellow stakeholders in Crown land but never did and no government has done so since. Methinks Higgy is just the latest ringmaster in this circus N'esy Pas? 
 
 
David Amos
 
Reply to Sam Smithers
I heard that your hero Higgy has no respect for data  
 
 
David Amos
Reply to Rosco holt
Well put  
 
 
David Amos
Reply to Richard Ames
Yup
 
 
Archara Goldehere 
Reply to Sam Smithers
7 years late wow come on lol you are very funny if you think this is ok lol  
 
 
 
 

New Brunswick goes quiet on whether forest companies really face $50M royalty hike

Minister mum on whether major increase announced in July is as large as first claimed

What caused the shift is not entirely clear, and so far provincial officials are not answering questions about it.

In a letter released last week criticizing a CBC News story that showed royalty rates on softwood pulpwood are being lowered by the province, Natural Resources and Energy Development Minister Mike Holland said most types of wood taken from provincially owned forests carry higher prices than last year, and forestry companies are paying more.

"Let me be clear, this new fee structure will result in tens of millions of dollars in additional revenue for the province of New Brunswick," says the three-page open letter signed by Holland and released publicly last Friday. 

"Total timber royalties could top $100 million."

That's a subtle but potentially significant revision of earlier estimates that the province would receive $50 million this year from increasing royalty rates.

Natural Resources and Energy Development Minister Mike Holland released a letter last week suggesting higher timber royalties "could top $100 million" this year. An estimate he gave in July was millions more. (Jacques Poitras/CBC)

According to government budget documents, "forest royalties" for the current year were originally projected to reach $68.1 million prior to the change in royalty rates. 

Reaching $100 million instead would require $32 million in additional royalty revenue, not $50 million, and in Holland's new letter hitting that lower target is only phrased as something that "could" happen.

Questions to Holland's department about whether the original estimate of companies paying $50 million more for Crown wood this year is still valid or has been revised downward have gone unanswered since last week.   

Additional questions about whether the original estimate might have been a miscalculation or misstatement or whether royalty rates were ultimately set lower than first planned have also received no response.

New Brunswick Finance Ernie Steeves updated his budget numbers in a first-quarter report in August, but the document included no projections on revenue increases expected from increased timber royalties. (Jacques Poitras/CBC)

In early July, Holland gave multiple interviews to New Brunswick media outlets to announce royalty rates were increasing by $50 million this year.   

According to Holland at the time, average royalty rates for companies taking wood from provincially owned forests would be climbing $10 per cubic metre. Multiplied over the five million cubic metres or more companies take for mills each year in New Brunswick, he put the expected revenue increase at $50 million.

"We've instigated an increase for this year, a fairly significant increase," Holland told CBC News. "It could project up to $50 million worth of additional revenue to the province for this fiscal year."

Similar stories appeared in other media outlets in the province, all mentioning the $50 million figure.

However, when new royalty rates took effect in August, the average increase of $10 per cubic metre was not apparent in the regulations.  

Single large trees like this spruce in the Pocologan watershed often carry multiple royalty rates when found and cut on Crown land. In New Brunswick this year large trunks used for making softwood lumber have had royalties increase, but rates on pulpwood made from the smaller tree tops have gone down. (Submitted by Ben Sweet)

It is a difficult issue to track exactly because in addition to adjusting rates, the province condensed what had been 38 separate timber royalty categories into 20. Despite that, it appears clear enough that average royalties have not increased by the $10 amount quoted in July.

According to figures compiled by the New Brunswick Forest Products Commission, about 60 per cent of the wood taken from Crown land in New Brunswick is spruce, pine and fir tree "roundwood" sent to sawmills and cut into lumber. The average royalty on that material has increased about $9 per cubic metre.

A further 25 per cent of the wood cut on Crown land is poplar and other hardwood used for pulp, and royalties on most of that increased just $2.32 per cubic metre.

Combined, those royalty increases should be worth about $30 million in new revenue if companies cut at normal levels, but it is difficult to see where an additional $20 million would come from.

Some smaller volume species taken from provincial forests like hardwood sawlogs did see royalty charges jump more than $10 per cubic metre, but others fell well below that amount, including softwood pulpwood, which had its royalty rate cut.

In his letter, Holland said he is "serious" about getting "the maximum value for our Crown lands for all New Brunswickers. Whether that includes $50 million increased timber royalties this year, or some lesser amount his department won't say.

ABOUT THE AUTHOR


Robert Jones

Reporter

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.

CBC's Journalistic Standards and Practices
 
 
 
90 Comments
 
 
 
David Amos
  
 Oh My My
"In a letter released last week criticizing a CBC News story that showed royalty rates on softwood pulpwood are being lowered by the province, Natural Resources and Energy Development Minister Mike Holland said most types of wood taken from provincially owned forests carry higher prices than last year, and forestry companies are paying more.

"Let me be clear, this new fee structure will result in tens of millions of dollars in additional revenue for the province of New Brunswick," says the three-page open letter signed by Holland and released publicly last Friday."

Methinks Minister Mikey doesn't like Mr Jones poking holes in his stuffed shirt N'esy Pas?
 
 
 
 
 
Kyle Woodman
Mike Holland sold out our resources in exchange for a Turkey Hunt for him and his buddies. What a disgrace.  
 
 
Lou Bell 
Reply to @Kyle Woodman
Former Premier McKenna sold out Anglophone NBers for votes . What a disgrace
 
 
Lou Bell 
Reply to @Kyle Woodman
The former Liberals attempted to pilfer an uNDISCLOSED 130 MILLION taxpayer dollars for their " Phonie Games "
 
 
Lou Bell
Reply to @Lou Bell: 
That's a disgrace Kyle ! 
 
 
Kyle Woodman
Reply to @Lou Bell: 
Do you have any new material?  
 
 
Fred Brewer 
Reply to @Lou Bell: 
So in your books McKenna and Mike Holland are both a disgrace. Thanks for the admission Lou.   
 
 
Brian Buchannon 
Reply to @Lou Bell: 
Yes, both liberals and cons have been bad for us, on this I agree  
 
 
Lou Bell 
Reply to @Fred Brewer: Comprehension isn't that hard Fred . Never said it and it's not there , but you go ahead and spin it ! 
 
 
Fred Brewer
Reply to @Lou Bell:

Let's see:

Kyle said Holland was a disgrace.

Rather than rebut that statement, your response was that McKenna was a disgrace.

Logical inference is that you were making a parallel comparison between Holland and McKenna. 

 
David Amos
   
Reply to @Kyle Woodman
Methinks she and her buddy Cardy must have ran out of butter tarts N'esy Pas?  
 
 
 
 
 
Lou Bell  
Dom and justin just gave millions OF OUR MONEY to the Irvings in the port of Halifax !!! Dom had to confirm he is good friends with Jim Irving in his personal disclosure after he was elected ! Liberals need to TRY HARDER !!!  
 
 
Michael Cain
Reply to @Lou Bell 
Jim is forestry, isn't he?  
 
 
Dan Stewart 
Reply to @Lou Bell 
LOL..So, what about this story Lou? You need to try harder.. 
 
 
Lou Bell  
Reply to @Dan Stewart 
Another Liberal enabled CBC story , just another " nothing burger " from the CBC , as usual . 


Lou Bell  
Reply to @Michael Cain 
And also in shipbuilding . Try to keep up .  
 
 
Dan Stewart 
Reply to @Lou Bell 
LOL.. Yep.. thats the typical excuse a good Con likes to use when they can't really defend their parties actions... No surprise there right lou? 
 
 
David Amos
  
Reply to @Dan Stewart
Methinks Lou understands why I feel honoured by the fact that Higgy and all the other PCs who live in Fundy Royal and sent me butter tarts have never voted for me N'esy Pas? 
 
 
  
 
 
 

N.B. receiving less than nothing on softwood pulpwood after Crown timber royalty changes

Timber royalties in New Brunswick increased in August but with one notable exception

A stump from a recently cut spruce tree in Charlotte County. On Crown land, New Brunswick has cut royalties on softwood pulp so low the wood has become cheaper than free to companies that cut it. (Robert Jones/CBC)

The New Brunswick government reset timber royalties as promised last month but not all charges to forest companies went up as the province has been suggesting, including to MLAs last week. 

In one case, royalties levied for cutting softwood pulpwood on Crown land have been slashed to levels so low the wood is now effectively being made available for less than free to companies that cut it.

Liberal finance critic René Legacy said that is a surprise to him, especially since MLAs on the legislature's public accounts committee put questions about timber royalties to the Department of Natural Resources and Energy Development just last week.

"We were in committee asking questions and there was no indication this was happening," said Legacy.

René Legacy, the Liberal MLA for Bathurst West-Beresford and the party's finance critic, says he is surprised government forestry officials did not disclose during their appearance before MLAs last week that softwood pulpwood timber royalty rates have been cut. (Jacques Poitras/CBC)

"We never seem to get the complete picture."

According to new regulations filed Aug. 30, the province reset what it charges forest companies to cut trees in publicly owned forests. Most royalty rates on most types of wood have increased but with exceptions.

Amounts the province charges forest companies for spruce, fir and jack pine pulpwood cut on Crown land dropped more than half in August from $7.59 to $3.40 per cubic metre.

Other softwood species used for pulp, like red pine, also fell to $3.40 per cubic metre but from a previous level of $5.50.

Royalty is now less than fee paid to companies

A royalty of $3.40 is too low to generate net revenue for government because of a $3.90 fee the province is required to return to forest companies on every cubic metre of qualifying wood they cut on Crown land. That includes all pulpwood. 

The "licence management service fee" is listed in regulations as "compensation for forest management expenses" that companies incur looking after Crown forests on behalf of the province. 

Because the management fee owed by the province to companies on every cubic metre of softwood they cut for pulp is now 50 cents higher than what the province gets back in royalties, it has become a net loser on softwood pulp that companies take on Crown land.

That amount varies annually but over the last five years companies have been cutting between 150,000 and 260,000 cubic metres of softwood pulpwood from Crown holdings.

Most softwood pulpwood in New Brunswick ends up in J.D. Irving Ltd. mills, such as the company's Saint John pulp mill, after passing through JDI's chipping operation in Sussex. (Robert Jones/CBC)

The cut in royalty charges on softwood pulp was not mentioned by government forestry officials last week when Legacy and Progressive Conservative MLA Ross Wetmore both asked questions about the subject at the public accounts committee.

Chris Ward, assistant deputy minister of Natural Resources, told Wetmore simply that "higher timber royalty rates" in the province had taken effect.

'Looks to me like a quid pro quo'

Green Party Leader David Coon, who was also at the committee hearing, was also unaware that royalty rates on softwood pulp had been cut.

He worries that will force private sellers of softwood pulp to lower their own prices or lead forest companies to bypass private sellers in favour of accessing more softwood pulp from Crown land.

"It's dreadful. It's another big impact on woodlot owners," said Coon, who wondered if it was done to quiet criticism among forestry companies about rates increasing on other types of timber. 

"It looks to me like a quid pro quo."

Most softwood pulpwood in New Brunswick, including most of the softwood pulp cut on Crown land and by smaller woodlots, goes to J.D Irving Ltd.'s Sussex wood chipping facility. 

Natural Resources and Energy Development Minister Mike Holland announced in July timber royalties in New Brunswick would be increasing. There was no mention of decreases also happening. (Jacques Poitras/CBC)

The company's vice-president of communications, Anne McInerney, referred questions about the royalty changes to the province.

In a written statement, the department said softwood pulp is a small percentage of wood cut in New Brunswick and that prices paid to private sellers of softwood pulp are already depressed with the lower royalty rate following that trend, not leading it. 

"The softwood pulpwood market has been relatively weak and the Department of Natural Resources and Energy Development has seen significant volume of material either left in the woods during harvest operations or used instead as roundwood biomass," said the statement.

"The Department expects this new rate to better reflect fair market value and result in better utilization of this resource."

The department also said other higher-value wood with higher royalty rates are cut at the same time as softwood pulp,  earning more than enough so "the Crown is never losing money."

ABOUT THE AUTHOR


Robert Jones

Reporter

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.

CBC's Journalistic Standards and Practices
 
 
 
123 Comments 



David Amos
Methinks the silence of the Private Woodlot Owner Associations is deafening N'esy Pas?
 
 
Gil Murray 
Department of Natural Resources = Irving subsidiary. Bought years ago.  
 
 
David Amos
Reply to Gil Murray
Yup 
 
 
 
 
donnie hicks 
A lot of that free pulp fibre is going straight to Macon Georgia,Irving new tissue 470 million plant built in 2019.And 400 million expansion in 2022.Thats a lot New Brunswick natural resources leaving our province making jobs for americans.Irvings invested one billion there since 2017.All that wood should stay in N.B.What a shame  
 
 
David Amos
Reply to donnie hicks  
Well Put Sir 
 
 
 
 
 
Kyle Woodman
Remember when Higgs said we were broke and everyone had to tighten their belt. Well I guess he only meant people who don’t run in his circles. 
 
   
Ken Grant
Reply to @Kyle Woodman: 
Don’t believe anything Higgs says. 
 
 
David Amos
 
Reply to Ken Grant
Methinks many folks would agree that its not wise to believe anything any politician says. Thats why so many of us don't bother to vote N'esy Pas? 
 
 
 
 
 
Fred Brewer
Does Higgs not realize the permanent damage he is doing to his reputation and to his party?
In the next election, the Liberals could run a soup can for Premier and I would vote for the soup can rather than vote for the Cons. 
 
 
Ken Grant
Reply to @Fred Brewer: 
The Libs have done the same. The one family will always prosper at the expense of the peasants 
 
 
David Amos
Reply to Ken Grant
Oh So True  
 
 
 
 
 
Brian mcknight 
The Higgins Corporate Junta clearly rewards its benefactors.  
 
 
David Amos

Reply to Brian mcknight
Yup 
 
 
 
 
Fred Brewer
This has to be the clearest indication to date, that NB is owned by the Irving Empire. When are we changing our provincial name to Irvingland?
 
 
David Amos
Reply to @Fred Brewer 
Hmmm 
 
 
 
 
Robert Buck
Only in New Brunswick!!!! 
 
 
Bill Smith  
Reply to @Robert Buck: 
nah, in Ontario we pay the US to take our excess electricity while the prices for Ontarians keep climbing 
 
 
David Amos
Reply to Bill Smith 
Wow 
 
 
 
 

Surging lumber prices generate better prices for New Brunswick trees — in Maine

Sellers claim stagnant timber royalties keep wood a bargain for local mills

Linda Bell, the general manager of the Carleton-Victoria Forest Products Marketing Board in Florenceville, N.B., said prices being paid for saw logs at mills across the border are up to 70 per cent higher than in New Brunswick. That makes the longer hauling distances and increased paperwork required to serve U.S. mills worthwhile, she said.

"What we're seeing in Maine is is an increased demand and increased pricing," said Bell, who estimated a quarter of softwood cut by private sellers in her area is now leaving the province.

"The price of lumber is up and their markets are really good."  

Pleasant River Lumber in Maine is one of the companies buying softwood from New Brunswick to run its mills (Pleasant River Lumber/Facebook)

Prices for lumber in North America have almost tripled since August and are nearing record levels set last spring.

A series of shocks to lumber supplies, including historic flooding in British Columbia in November and Russia's invasion of Ukraine, have taken turns roiling markets.

Russia is a significant global exporter of softwood lumber.

Much of its trade is with China, but tightening sanctions on Russia have "goosed" nervous lumber markets that were already elevated, according to wood product analyst Dustin Jalbert, who is with the online commodity price reporting service fastmarkets.com.

Wood product analyst Dustin Jalbert said a number of factors have been pushing lumber prices higher for months with the Russian invasion of Ukraine the latest event making traders nervous. (Submitted by Dustin Jalbert)

"Russia is probably the largest softwood timber resource on the planet and there's a lot of lumber production," Jalbert said in an interview.

"This Russia Ukraine situation is only adding to the fear out in the marketplace that there's not going to be enough building material supply as we head into the prime home-building season."

In New Brunswick, forestry companies have been setting revenue records during the pricing bumps, but those who cut and sell trees have complained for more than a year that little of that bounty has been making its way back to them or flowing to the province.

New Brunswick mills are supplied mostly from timber cut on publicly owned Crown land. 

Russia is a major lumber exporter and sanctions imposed on the country following its invasion of Ukraine have caused worry in lumber markets. (Maksim Levin/Reuters)

Private sellers contend that because the New Brunswick government does not raise the price it charges for trees to match rising lumber prices as most provinces do, prices they can charge mills as a result are kept artificially low.

"When they're getting subsidized rates from Crown and a lot of their supply comes from Crown they don't need our wood," said Bell.

"Therefore, the price is down and the demand is just not there." 

Last month Statistics Canada reported New Brunswick forestry companies rode elevated prices for a variety of wood products, mostly lumber and plywood, to a record $2.6 billion in sales in 2021.  

Softwood logs are loaded for processing at the J.D. Irving Ltd. sawmill in Chipman. New Brunswick wood product mills made a record $2.6 billion in 2021 but paid the same timber royalty rates they did in 2016. (Gerard Sirois/GNB)

That was $1.3 billion higher than sales in 2016 even though prices charged to forest companies by the province for the use of Crown wood in both years were identical.

That's different from most provinces, which move what they charge for trees up and down with the price of lumber to connect the value of trees to the value of goods they are turned into.

In British Columbia, timber royalties have more than doubled in three years as lumber prices have risen. 

B.C. has made $558 million more from timber royalties than it was budgeting this year alone, and those royalties are set to jump again on April 1, when rates are next updated.

Next door in Alberta, timber royalties change even faster. They have jumped five times since September and in March hit prices four times higher than what New Brunswick is currently charging.

"Timber dues rates are based on the current market prices of forest products," the province explains on its website.

"These charges ensure Albertans receive fair compensation for the use of publicly owned forest resources."

Historic flooding in British Columbia in November that paralyzed transportation routes such as Highway 7 at Ruby Creek is one of several factors that have been pushing lumber prices up for the past seven months. (B.C. Ministry of Transportation and Infrastructure)

Last year, New Brunswick Natural Resources Minister Mike Holland criticized timber royalty systems that rise and fall with lumber prices even though every province west of New Brunswick uses some form of floating charges. 

Holland said New Brunswick's "stable steady" approach, where it set rates back in 2015 and has not changed them since, has been better over the long term. 

"I've explained it several times that if we had to follow that model of chasing the commodity from 2015 that Alberta did, because of the significant swings not just high but low, there would been over $50 million over that five-year period that we as New Brunswick would have left on the table," Holland told reporters last spring.

But that analysis no longer holds. 

Alberta timber royalties have averaged more than double New Brunswick's in the last year because of high lumber prices. They would have raised $100 million more than New Brunswick rates could raise had they been used instead.

That means over the last six years New Brunswick's royalty system raised $50 million less from forestry companies than Alberta's system would have.

Natural Resources and Energy Development Minister Mike Holland said last year that New Brunswick made $50 million more over five years from timber royalties than if it had tied rates to lumber prices like Alberta. Over six years the amount has flipped to $50 million less. (Jacques Poitras/CBC)

Holland's office did not immediately respond last week to a request for comment about the current resurgence in lumber prices or whether the province might reconsider its position not to tie the price of trees in some way to the price of lumber, given revenues other provinces have been raising.

Bell hopes the province does consider it.

She said higher prices New Brunswick sellers are getting for their logs in Maine than they can get at home tells her prices locally are artificially low. 

She believes higher timber royalties imposed during strong lumber markets would be affordable for companies, raise more money for the province, and let local sellers charge amounts similar to what other jurisdictions pay. 

"They have no Crown wood. They're on an open market," Bell said about the trade for logs in Maine.

"We're seeing pricing closer to fair market values there, than what we see in New Brunswick."

ABOUT THE AUTHOR


Robert Jones

Reporter

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.

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