Province to cap Crown wood supply for 5 years

Telegraph Journal | December 20, 2019

The province is capping the amount of Crown wood for the forestry industry for the next five years as part of its efforts to increase supply from private woodlot owners, Natural Resources Minister Mike Holland announced Thursday.

At Thursday’s press conference in Fredericton, and in addition to the supply cap, Holland announced the province will: 

• “Evaluate options to refocus the New Brunswick Forest Products Commission to ensure its purpose and powers are implemented and well functioning,” and; 

• “Optimize services from private woodlot marketing boards … consult with First Nations over the coming months and work with the forest industry to develop a Crown forest management plan.”

Holland said the supply cap will help private woodlot owners, and denied there was a link between it and the province’s ongoing NAFTA softwood lumber battle with the United States.

“This is part of the progressive plan to put together … a holistic forestry outlook and a forest for the future,” Holland said.  

The Americans allege Canada has an unfair market advantage because of the amount and low price of wood cut on Canadian Crown land. 

Canada has been without a softwood lumber agreement with the U.S. since the last deal expired in 2016. That led the U.S. to slap punishing duties on Canadian producers, including New Brunswick forestry companies, and a prolonged NAFTA trade dispute.

Duties of up to 20.83 per cent on Canadian producers, including New Brunswick forestry companies, remain in place at the border. J.D. Irving, Limited, has a 9.92 per cent duty on its products after it spent months in court arguing that it is not subsidized by the government. 

And while the news was greeted with enthusiasm from a group that represents the private woodlot owners, industry officials expressed a mix of cautious optimism and concern — especially about the supply cap.

In a written statement, Jason Limongelli, vice-president of Irving Woodlands — part of J.D. Irving, Limited, the biggest forestry company in New Brunswick — applauded the government’s efforts “to increase efficiency and accountability in the New Brunswick private wood market” and its push for “increased transparency on Crown land.”

But he also urged the government to “reconsider” the supply cap.

“Wood is the ultimate renewable resource. Global demand for products made from wood is expected to grow 30 per cent per year as people focus on low carbon solutions to fight climate change, green building products that sequester carbon and a shift away from single-use plastics,” Limongelli said in the statement.

“New Brunswick is ideally positioned to meet this demand with sustainably managed and resilient forests. After close to 40 years of tree planting and over $450 million in silviculture investments on Crown land, New Brunswick’s Crown wood supply could be sustainably increased. We believe New Brunswickers deserve to see the maximum environmental and economic benefits on their investment.”

Later in the statement, Limongelli urged the government “to reconsider its hold on Crown volume until 2025 so that it may respond quickly and appropriately to opportunities as they arise.”

Mike Légère, the executive director of Forest NB, which represents a big part of the industry, said there were positive aspects to the announcement, particularly the commitment to more transparency in the industry.

But he also expressed “concern” about the supply cap.

“We’re talking about trying to grow the province’s economy,” Légère said.

“I understand the motivation behind that … but on the [other] hand, five years to not have any growth in [Crown land supply] when we know the wood is there is sort of deferring a potential growth in the industry when the opportunities are there.

New Brunswick Federation of Woodlot owners president Rick Doucett said it was good to see private woodlot owners finally on the government’s radar. 

“I think what we’re taking out of this is that there’s clearly a focus that the government is serious about doing something about the private woodlot sector … this minister seems very sincere in his desire to get something done, and he seems to have the support of the premier,” Doucett said. 

New Brunswick Forest Products Commission executive director and secretary Tim Fox said he hoped the changes would lead to his group being able to “enhance” its role in the industry.

Conservation Council of New Brunswick executive director Lois Corbett welcomed Holland’s comments about more transparency in the sector, noting the province still hasn’t taken a holistic view of and shared enough information about the industry.

When asked if the Crown supply cap could help New Brunswick argue its case with the Americans, Holland didn’t answer directly.

“I’m confident in both the premier and the minister of intergovernmental affairs,” he said. 

Premier Blaine Higgs said the NAFTA softwood lumber fight “wasn’t the driver” behind the Crown supply cap, but agreed it could inadvertently help assuage the Americans’ concerns.

But the primary reason for the freeze was to encourage private woodlot owners to play a bigger role in the market, Higgs added.  

Reaction from the other political parties was also mixed.

“Very disappointing,” said Green party Leader David Coon. “It was an empty cup.”  

Coon said the government should instead adopt a bill he tabled in November that calls for amendments to the Crown Lands and Forests Act.

“My bill, if adopted, would strengthen the power of the marketing boards,” Coon said.

“All the wood would have to flow through the marketing boards. It would give them a bit better position for negotiating price, and of course it would require the government to ensure the mills purchase 30 per cent of their wood supply from private woodlot owners.”

People’s Alliance Leader Kris Austin described it as a “pretty positive” but “vague” announcement, and said he wants to look at the fine print. 

Liberal MLA Benoît Bourque said there was no substance to Holland’s announcement, dismissing it as “fluff.”

By Andrew Waugh