Another day, another new forestry policy for New Brunswick

Two years ago (2012), the government of New Brunswick released a new forestry management policy for Crown land.

The 2012 plan was a compromise between those asking for more conservation / different management approaches and those who wanted more access to wood on Crown land. The annual allowable cut for softwood in the 2012 plan was left unchanged from the previous 2007-2012 strategy, and remained at 3.27 million cubic metres. The hardwood allowable cut, on the other hand, was reduced from 1.77 to 1.41 million cubic metres. The conservation forest area was reduced from 30 to 28 percent and the amount of protected natural area (the PNAs are ‘no-cut’ areas within the conservation forest) increased to eight percent.

The plan was based in part on the report of a taskforce established to review forestry practices on Crown land. The report suggested that private woodlots could supply any shortfall in hardwood supplies and also provide any increased demand for softwood supply. The report also suggested that the term ‘working forest’ be used to describe the allocated areas within crown lands, in order to emphasize the renewable aspect of this resource.

[This task force report contains links to many previous forestry reports and so is a valuable resource. I suggest downloading a copy of it and other reports before they are ‘disappeared’.]

The 2012 plan followed years of significant downsizing in the forest industry. A number of lumber mills closed and two pulp mills (Dalhousie and Miramichi) were shut down between 2005 and 2008. The main user of wood supplied from crown lands, J.D. Irving Ltd (JDI), expressed dismay at the new plan. JDI had recently closed the Deersdale and Clair mills; some 143 jobs were lost as a result. A combination of soft market conditions, power rates, and uncertainty re wood supply were cited as reasons for the closures. With the release of the 2012 crown land forestry plan, JDI said that ‘cost uncertainty’ relating to that new forestry plan would keep those mills closed.

Fast forward two years to 2014, and we find that the same government has had a change in heart. Softwood allocations from crown land are increased from 3.27 to 3.9 million cubic metres, although hardwood allocations remain unchanged. PNAs are doubled in size within the conservation forest areas, although the latter are reduced from 28% to 23% of Crown lands (and that 28% was a reduction from the 30% conservation forest pre-2012). It’s not clear yet, but it appears that the 5% reduction in conservation area will come from reduced buffering around wetlands and streams, and/or harvest from areas previously regarded as uneconomic or too difficult to harvest. What is clear, however, is that, although the document released by the government claimed that NB could now reap the benefits of silviculture practiced over recent decades, the gain in harvest is coming from reductions in conservation forest. That does not sound like a sustainable practice. Again, by sustainable, I am not talking about the natural ecosystem per se, but getting the maximum economic value out of our resource for future generations.

One of the more disturbing aspects of the new plan was the announcement by the responsible Minister that the Province had now entered into a contract with JDI such that a certain volume of wood fibre was guaranteed by the provincial government. Not only are we reducing the percentage of crown land set aside for conservation purposes, but we are guaranteeing a supply to the private sector. Getting the public sector to commit to such a guarantee has been a request by the forest industry for several years. I wonder how many other examples there are of governments guaranteeing a supply of a natural resource to the private sector. Offering up a certain acreage is one thing; agreeing to set harvest objectives is another. But guaranteeing a supply?

What happens if the supply falls short for one reason or another? Will additional conservation forest be allocated for harvest? We don’t know because the contract details have not yet been made public – another fine example of the lack of transparency in this province. I am surprised that neither the Opposition Liberal Party nor the New Democratic Party have had much to say about this contract. I assume that means they accept the concept. I don’t, and I do not think many New Brunswickers will either, but apparently we are not to be given a voice or a choice. It is perhaps not a coincidence that the Liberal Task Force on Self-Sufficiency of a few years ago recommended changes to Crown land utilization that bear similarities to those now being implemented.

In what was certainly a coordinated effort, JDI quickly announced a major upgrade to its paper mill in Saint John and expansions at its Chipman and Doaktown timber operations. The latter two locations will see approximately 95 full-time equivalents in new jobs (not counting short-term construction and renovation jobs) – that is less than those lost at Deersdale and Clair a few years ago. The pulp mill will see approx. 600 new full-time jobs, a fact that was applauded by the employees’ union.

What is not really clear is how many of those jobs are due to the turn-around in the U.S. and global economy and how many are a result of the promise of an increased wood/fibre supply. If over-harvesting is not a problem, then why does JDI require so much more Crown land, given the closures of several lumber mills and pulp mills in recent years (which surely would have freed up some wood supplies for use by JDI)? Something is wrong here.

What I see in this is a government that, in its desperation to get re-elected, is willing to make some potentially bad deals in order to get some job announcements. For some unknown reason, the current administration seems to have felt that ‘cutting spending’ would lead to some kind of magical economic turn-around. Then all would be well. Perhaps those magical beliefs are just another sad reflection of the shallow talent pool from which our political parties have drawn their current leaders. In any event, cost-cutting has not resulted in popularity, so the current administration has decided to go all-out with respect to job creation in order to be re-elected.

If you are looking for a frank review of ‘transparency’ issues relating to forestry management in this province, then I recommend this 2012 report from yet another task force – it has some clear and sobering things to say about wood management in NB. For example: “The pervasive lack of transparency in both Crown forest and private woodlot policy suggests that “opaque” best describes DNR’s and the Commission’s approach to sharing public information. Opacity leads some citizens to believe that decisions are being made by “insiders” who seek to profit from public policy discussions held behind closed doors, and it undermines citizens’ faith in civic process.”  One fundamental problem is the management of Crown lands by the lessee. Management costs are subtracted from royalty payments and this can result in no net payments to the Province, or payments from the Province to the lessee. This makes oversight of management practices more difficult. Would it not be better if there was more direct involvement of DNR staff in management of Crown lands?

The report also points out that small woodlots are not, as some seem to feel, paragons of good forestry management – a substantial number of woodlots are being mismanaged. If action is not taken to improve that situation then small woodlots will not be a reliable source of wood fibre supply in the future.

These problems of ‘opacity’ are not unique to the current government; they have persisted for decades. Citizens of this province have not demanded better, and, indeed, have accepted ‘opaque’ policy development and administration in many policy areas from successive governments. The political parties are not to blame – they are, after all, just trying to give us what they think we want. And we have not made that very clear, have we?

Facebooktwitterby feather

One thought on “Another day, another new forestry policy for New Brunswick

  1. I wrote a letter to the Minister of Natural Resources about this policy change but received no reply. This is the letter I sent:

    To the Honourable Paul Robichaud, Minister Department of Natural Resources, Government of New Brunswick.

    Dear Mr Robichaud,

    I am sure by now you have received a number of objections to the planned strategy as announced on March 12, 2014 by the Premier’s office for Forest Management in New Brunswick, No doubt most of these objections were in regard to the sustainability of the forest eco-system on crown lands under the stress of increased logging. This is truly an issue but there are other serious economic problems with your plan. As a citizen, I would like to have your comments on some on some inconsistencies in the Government’s statement. There are numbers that just don’t add up.

    The following statement in the press release was attributed to you:

    “We are at a crossroads in New Brunswick,” said Natural Resources Minister Paul Robichaud. “Since 2004, the number of mills operating in New Brunswick has been reduced by half, resulting in the loss of thousands of jobs. Four of these were significant pulp mills that provided a market anchor for sawmill byproducts and low-grade forest products.”

    Now please have a look at the following harvest numbers (as provided by the Department of Natural Resources) from crown land during the period in question:

    Something doesn’t look right. Your statement said that we lost half of the mills in the past ten years yet we harvested almost as much wood as if they were still there. In fact there were several years in that period where we harvested more wood than we used

    when all of the mills were running. Where did that wood go? Since it appears from subsequent announcements that the Irving mills will be the main benefactor of your management policy, how much of it did the Irving Mills already get? Did they get most of the wood that was harvested in the above numbers? How much has their wood supply from Crown land already increased as compared with 2004? If we are harvesting almost the same amount (some years even more) how come we lost so many jobs? If the Irving Mills received any of that wood, how many jobs were created by them?

    I’m certain you are aware of the sorry state that our forest industry has reached. This has happened in spite of the government of the day continually increasing the wood supply and providing more and more aid to the industry. In the case of the Irving Mills, there is a long, long list of funding and subsidies that they are given and yet they are continually looking for more. Their power rates are subsidized, their property taxes have been reduced, they have been given Government loans, their personal taxes have been reduced (I assume the Irvings are in the higher income brackets that the liberals generously helped out), and corporate taxes were substantially reduced. All the while, this group of companies, through its lean management programs, has been cutting jobs to increase profit margins.

    Here is one case of how we as a Province have done things with this company. The JD Irving Company built a sawmill in Deersdale in the early 1960’s. It is very close to their tree nursery operation (which, incidentally, has received a great deal of public money over the years), and was in the heart of their forest land holdings, which was claimed to be sustainably managed. The mill was expanded over the years and the surrounding forests were stripped to feed it. I have no idea of how much Government assistance was provided to that operation since it was established but I do know that it was a part of the Irving’s vision of a “sustainable” forest products industry. In 2008, the Government loaned the Irvings $4.5 million to install a biomass boiler there. 3 years later, the company closed the mill, citing lack of raw material as the main reason. 73 people lost their jobs. If sustainable forestry practices were in fact being used, why did this operation shut down? Doesn’t “sustainable” mean that there would be raw material in perpetuity? At the time, the closure was claimed to be temporary but since then, machinery has been removed and in fact the boiler, for which the province provided a loan 3 years earlier, is being installed in Irving’s new Ashland mill in Maine. Did they ever repay the loan? How come JD Irving can open a mill in Ashland Maine where the power rates are three times higher than what he pays in New Brunswick? Will he be using New Brunswick wood from crown lands in this mill? When the Deersdale mill was shut down, was the Irving wood allocation from crown land reduced to reflect this? Isn’t the crown allocation tied to mill requirements? Deersdale was using a substantial amount of wood and it didn’t disappear over night. Where did that wood go? I could go on and on but I’m sure you see the point. The citizens of New Brunswick have a right to know what is happening on their crown land and how the resource is being used.

    In the past forty years the total number of jobs in the forest industries has been steadily declining and the public, through its government, has been largely subsidizing this decline. Large scale mechanized harvesting is only feasible on large blocks like the ones provided by the Government through its licenses. This type of harvesting is less labour intensive and means fewer jobs. So not only do the major companies purchase the standing wood at reduced cost from the Government, it is cheaper to harvest. It would seem logical that providing easier and cheaper access to the resource should command a premium in the price paid for that resource but it is the other way around. Meanwhile, the private woodlot owners cannot compete because they are not as mechanized and are more labour intensive (jobs!). The mills have been continually modernized and made more productive, often with Government assistance, and the number of jobs has been reduced as a result. All of this so the large companies can produce a commodity product as cheaply as they can to compete for the US housing market. This sounds like the proverbial “race to the bottom”.

    If you look at pictures of logging operations in the province from forty or fifty years ago and compare them with what we are producing now you will visually see the decrease in log size and quality. We said that the resource was sustainable back then but it wasn’t. You are now saying that with your plan the current resource is sustainable but it isn’t either.

    Based on past performance, the Irving Company has not demonstrated an interest in sustaining the forests. Their principal motivation is increasing profits by creating a crop of easily harvested trees that may not even have a market in another fifty years. If they want to do that on their own land, that is their business. Crown land, however, should be managed to provide a diversity of products for a healthy and diverse wood products industry. And as trustees of Crown land, that is the responsibility of the Government.

    The Irving Company in particular has repeatedly used the threat of plant closure and job loss to get its way in terms of raw material supply and cost concessions. The fact is we are enduring a slow and painful loss of jobs anyway. When the resource is depleted the jobs will all be gone, and so will Irving, so we are simply postponing the inevitable. A couple of years ago the Irving companies announced with great fanfare that they would be hiring 6500 people in the following two year period. It has been very quiet since then and people are still moving to Alberta.

    I was raised in this province and attended University here. I am a forester by training and

    worked over forty years in the wood products industry. Over that period, I have watched how our forests have been decimated and transformed. In many places it is not now what I would call a forest. At the same time, I have watched the decline in the number of jobs and the reduction of opportunity for anybody to develop and grow a wood products business because they cannot access the raw material. If you really want to create jobs and develop a sustainable forest resource then you should scrap the present system and start over – it’s that messed up. The press releases made by J.D. Irving Ltd following your announcement claimed that their investment in the proposed pulp mill modernization was unique in that it was the only one announced outside of third world countries in recent years. One could interpret that as saying we have finally reduced the value of our resource to third world levels so that we can compete. I believe that is the wrong direction to go.

    While doing research for this letter, I came across an article written by Erin Steuter from Mount Allison University about monopolies in the News Media and used the Irving owned newspapers as a case study. It is titled “He who Pays the Piper Calls the Tune” and refers to New Brunswick as an Irving fiefdom. That’s a sad commentary about our province but she has a point. The Irving organization exerts undue control and influence to protect and promote their interests and, in my opinion, this results in a considerable drag on the New Brunswick economy.

    I would like to close by requesting again that you will consider the questions and comments I have put forward. Hopefully your Government will change direction so that we can reverse the decline of a once vibrant industry in our province. I look forward to your response.

    Sincerely

    Gerald (Jerry) Viel

    I have copied this letter to the leaders of the provincial opposition parties and the news media who may also have an interest in your response.

Comments are closed.