Miramichi River » Forestry Practices

END OF AN ERA IN MIRAMICHI

admin — Fri, 03 Jul 2009 01:25:45 +0000

On June 29, 2009, Newcastle Lumber Co. Inc., the last operating mill on the Miramichi River, New Brunswick, Canada announced that they have gone into receivership.

Newcastle Lumber Co. Inc., a local family-owned sawmill that has been operating in Miramichi since 1894, has gone into receivership, company president Dan Anderson announced in a news release. This marks a sad end to Miramichi’s once celebrated mill era.

“Understandably, this is a very difficult time for Newcastle Lumber, its employees, suppliers, and customers,” Anderson said. “In the face of very difficult economic times and other closures in the region, the mill fought very hard to stay in operation — unfortunately it was unable to secure the necessary funding in order to modernize its operations and stay competitive.” Over 100 workers will be affected by the shutdown, including woods contractors and mill workers at the main mill in Newcastle and the dressing facility in Boiestown.

A loan guarantee from the provincial government which expired last year wasn’t renewed. Nobody has said why the company cannot get another small loan guarantee from the province. The Graham government recently announced $50 million in guarantees to Atcon Group.

Newcastle Lumber has been trying to modernize for two years, but hasn’t been able to get the government support it needs, says the company’s president. Danny Anderson was part of a special delegation at Thursday’s city council meeting to try and draw attention to the forestry sector’s plight in the Miramichi. After the meeting, he said even though his mill is in receivership it will still be possible to get it back up and running. “As long as we get the right support it’s possible. As long as we have government support I don’t see why not.” Anderson said the company wasn’t able to secure financing to modernize and the government didn’t renew a $1.1 million loan guarantee in a timely manner.

Anderson said as part of their plan to modernize he approached the government with an interest in the former UPM mill in Blackville and a Crown allocation from there, but the province told him the allocation wasn’t available. “What irks me the most is …. I mean you can look around at all kinds of areas and see where the province has picked to modernize other mills and companies.” The plan to modernize would put about 100 people back to work, which was the same as before the company’s two mills shut down, but it all depends on how the government acts this summer, he said. “The thing is to get back to work first and then to modernize. That’s the key to the future.” Anderson said the mills used about 60,000 cubic metres of wood and a modernized mill would need about 200,000 cubic metres from a combination of Crown and private wood.

When asked if a saw mill can be a profitable business, Anderson said Newcastle Lumber does a lot of value added products and would be profitable if they could modernize. “If we had modernized two years ago as we had hoped we would still be running today.” Anderson said the company didn’t ask for any government funding, just a wood allocation and a loan guarantee so they could borrow money to modernize and when asked why the government didn’t come forward with help he didn’t know.

“I wish I could give you an answer to that.”

When asked about criticism the government isn’t helping Newcastle Lumber, Miramichi Centre MLA Foran repeated they did provide them with a loan guarantee in the past. “It wasn’t about an allocation in the last couple of years. It was about survival in the market that was out there.” Foran said the province was also working on the Weyerhaeuser OSB mill sale over the last year, which involved a Crown allocation and they did provide Newcastle Lumber with a temporary allocation. “It’s unfair to say we wouldn’t give it to them. Weyerhaeuser was back on the market and we did everything we could to promote that and provide an allocation to them.”

Jean Guy Comeau of the Northumberland County Forest Products Marketing Board said his organization has worked with Newcastle Lumber since they formed and they have had a great relationship. “Working with these people you just can’t compare. It’s been unbelievable.” When the marketing board was building their first office they didn’t have the money to pay for the lumber they needed right away so Newcastle Lumber lent it to them until they could pay them, Comeau said.”I’m very disappointed as a Miramichier and a New Brunswicker that we seem to fail to help the people that help the area and the province the most. That is something that I will never understand.” Comeau said the region’s wood is leaving the area and he doesn’t know why the province is in a hurry to use it because cut trees are still useable for about three to five years. “One of the things that’s most surprising is they’re treating wood like it’s ice cream.”

Anderson said the company is going through the receivership process and has to have their plan in place by July 27. “We have a plan. It’s just up to the government to respond. That’s the sad part about this.” Although he would not say the size of a loan guarantee they need, Anderson said a lot of it depends on how much wood the government will allocate to them. “The more you get allocated the more you can raise in funds.”

Miramichi-Bay du Vin MLA Bill Fraser said he didn’t know the specifics of the file because Newcastle Lumber is not in his riding, but he did say the government will look at any plans that could create employment in the Miramichi. “If it’s a plan that’s going to work and is sustainable in the long term and it’s going to create employment in the Miramichi then we have an obligation to support it.” The local MLAs have supported Newcastle Lumber in the past, but they have to present a plan to government and it has to show they are a viable business, he said. “It has to be good for the Miramichi area and it has to be good for New Brunswick.”

Newcastle Business District general manager, Natalie Bradford, said the mill has been in business for more than 100 years. “I’m sure that’s more than long enough to justify any assistance they may require.” Bradford said the government has supported companies owned by groups from outside the Miramichi, but she thinks the community support is there for Newcastle Lumber. “Just to say locally owned and operated should be enough.”

Anderson said he approached the government with a plan to upgrade that included purchasing the now idle sawmill in Blackville. But to do that, he would need a Crown allocation, in addition to buying wood from private woodlot owners. However, Anderson was told the allocation wasn’t available and the mill was eventually sold to Umoe, who has decided not to reopen it.

Instead, wood from that allocation is being used for a mill in Bathurst, which, according to Miramichi Centre MLA John Foran is “OK”. “They have a right to that wood. OK. They have a saw mill in Bathurst.” Foran said about Umoe using wood from the Blackville mill allocation to feed the mill in Bathurst.

The Bathurst mill was operating and had its own Crown Wood allocation when the Province removed the Crown Wood Allocation from the Blackville mill and gave it to the Bathurst mill also.

By refusing to allocate wood to the Newcastle mill and removing the wood allocation from the Blackville mill and transferring it to the Bathurst mill, the Graham government is ensuring that the mill in Newcastle, the mill in Boiestown, and the mill in Blackville remain closed with the resulting loss of jobs to the residents in those communities.

Is this what Graham was referring to when he talked about “Our new sustainable management approach for Crown forests”?

Northumberland County has four elected representatives in the Provincial Legislature. These four MLA’s are Liberal members of Shawn Graham’s caucus.

Rick Brewer – Southwest Miramichi – Represents Blackville & Boiestown
Boiestown (506) 369-2011 Blackville (506)369-2011
John Foran – Miramichi Centre – Represents Newcastle
Newcastle (506) 624-2131
Bill Fraser – Miramichi-Bay du Vin
Carmel Robichaud – Miramichi Bay-Neguac

N.B. Auditor General reports a flaw in Crown Land timber pricing

admin — Tue, 31 Mar 2009 23:00:17 +0000

Mike Ferguson, speaking to a legislative committee Tuesday, March 24, 2009, said flaws in the system mean royalties do not reflect fair market value.

The fundamental problem with the design of the system for determining royalty rates is that the timber market is not truly an open market.

Timber royalties are based on a survey of the stumpage prices received by private landowners – a segment of the market that supplied 11.6% of the timber consumed by mills in New Brunswick in the fiscal year ended 31 March 2007. The price that is paid to the private landowners determines the price the mills will pay to the Province for timber harvested from Crown land which represents 41.5% of their source of supply.

This would provide an incentive for the mills to keep the prices paid to private landowners as low as possible since those prices affect the royalties that would have to be paid in the future. Since the mills represent a very large proportion of the buyers for timber harvested in New Brunswick, they also have the market power to keep the prices paid to private landowners low. The result could be a continual spiraling down of prices and therefore royalties.

Timber from marketing boards accounted for 20.8% of timber consumed in New Brunswick in the 2004-05 fiscal year but declined to 11.6% in 2006-07. Timber harvested from Crown forests accounted for 37.4% of timber consumed in 2004-05 and increased to 41.5% in 2006-07. It should also be noted that in many cases the timber imported by New Brunswick mills is from land that they own or lease in other jurisdictions.

Given that the proportion of timber harvested from Crown land has increased while the proportion harvested from private woodlots has decreased significantly, it does not appear that the Minister has used the powers created by subsection 29(7.1) of the act to maintain proportional supply.

These figures also show that while the total consumption by New Brunswick mills declined about 9.7% between fiscal years 2004-05 and 2006-07, timber supplied from Crown forests increased slightly by 0.3% while timber supplied through marketing boards decreased 49.7%. The volume of timber consumed dropped 1,253 cubic meters during this timeframe, all of which was borne by private land owners.

The current royalty system is based on the standing stumpage prices that private landowners obtain in sales to mills that hold the licenses to Crown timber. In fact there are very few alternative buyers for the private landowners to sell to. This market power position of the mills makes it impossible for us to be confident that the royalties reflect fair market value.

New crown forest management plan a step backwards for New Brunswick environment and industry

admin — Sat, 21 Mar 2009 16:20:02 +0000

On January 30, 2009, the New Brunswick government announced their decision on the direction they planned to take for the management of the crown lands of New Brunswick. Against the recommendations of most of the citizens of New Brunswick who participated in the Public Forum on Forest Management and of all Environmental Organizations, they have decided to implement the recommendations of the major Forestry Companies who are harvesting the timber on the Crown Lands of New Brunswick. The following is the response of one of the environmental organizations to the government announcement.

Fredericton –The Canadian Parks and Wilderness Society (CPAWS) is extremely disappointed with the New Brunswick government’s announcement today of a new direction for public forest management and is calling on government to make changes.

“This direction is a step backwards for the environment and for the future of New Brunswick’s forest products in the market place. It’s out of line with the direction of every other jurisdiction in Canada to improve forest conservation. It’s also out of step with the changes we need in forest management to address climate change,” says Roberta Clowater, Executive Director of CPAWS’ New Brunswick chapter.

Unless the strategy is changed, it will lead to a decrease in the amount of forests that are conserved. It will also lead to a significant loss of old forests and a 45% reduction in forests managed for wildlife habitat.

Under the strategy, tree plantations will increase from 8% to over one-quarter of the forest — well above the upper limit considered safe by conservation scientists for preserving biodiversity.

“The government appears to have rejected the strong environmental values expressed by a large proportion of the public during recent consultations. If we are going to conserve biodiversity in New Brunswick, we need to create a comprehensive network of protected areas – comprising more than 10% of the public forest.

“The government’s vague goal of raising the amount of protected forest from 4% to between 6% and 8% of the province continues to place New Brunswick behind the rest of Canada,” says Clowater.

“I have no doubt that this new forest management regime will do little to increase sales for New Brunswick products in international markets. Increasingly, these markets are seeking products that can prove their links to environmental sustainability and progressive forest conservation,” adds Aran O’Carroll, CPAWS National Manager of Legal and Regulatory Affairs.

Clowater states, “CPAWS wants to work with industry to reverse this unfortunate decision by government. Our aim is to work with government and industry to conserve our forests and ensure a stable footing for our province’s products in the marketplace. This new forest management strategy will not help us achieve these goals.”

Less than 3.5% of New Brunswick is permanently protected, placing it dead last among Canada’s provinces. The proportion of New Brunswick forests certified under the Forest Stewardship Council – the international gold standard in recognizing responsibly managed forests – is second to last in Canada.

CPAWS’ goal is that Canada will protect biodiversity in its eastern woodlands, covering New Brunswick, Nova Scotia, Quebec and Ontario, through creation of a comprehensive network of protected areas and carefully managed industrial activities.

Contact: Roberta Clowater, 506-452-9902

About CPAWS: The Canadian Parks and Wilderness Society (CPAWS) is Canada’s voice for wilderness. For 45 years, CPAWS has worked to ensure that nature comes first in parks management and that protected areas maintain and enhance Canada’s biodiversity and wilderness. The New Brunswick chapter, CPAWS NB, was established in 2004, evolving out of the former NB Protected Natural Areas Coalition (NBPNAC). For more information, please visit www.cpaws.org.

Management Alternatives for Public Forest of New Brunswick

admin — Thu, 16 Oct 2008 15:24:18 +0000

Two task force reports have been commissioned by the Province of New Brunswick to examine the current state of the forestry sector in New Brunswick and its prospects for the future.

These two reports have been completed and are being examined by the Province and apparently will be used to decide the future direction that will be taken by the Province in implementing policies that could change the forest industry in New Brunswick forever.

The two reports are available at: A report of the New Brunswick Task Force on Forest Diversity and Wood Supply by Thom Erdle & Chris Ward University of New Brunswick and A report of the Task Force on Investment Opportunities in the New Brunswick Forest Sector by Don Roberts CIBC World Markets Inc. & Peter Woodbridge Woodbridge Associates Inc.

Some of the recommendations in these reports, if implemented by the Provincial government, will change the existing forests of New Brunswick forever.

The recommendations will impact not only on New Brunswick forests, but on:

The rivers and streams that flow through the forests;
The birds and animals that live in the forests;
The unique species, and ecosystem diversity that is native to N.B. forests;
The salmon and other sport fish that live in the rivers and streams that provide recreation and livelihood for N.B. residents;
The game birds and game animals that live in the forests that provide recreation and livelihood for N.B. residents;

New Brunswick forest and lands are not only for the benefit and use of the companies who for economic reasons will cut as much of the forest as they can; as quickly as they can; as cheaply as they can; and whose major concern is to maximize their profits.

Every citizen of New Brunswick should carefully examine the recommendations in these reports and then each one of us should impress upon our M.L.A’s the concerns we have about the changes that will effect all of us who live here now, our children, and future generations of our children.

The following are links to two comments, of many, that have been posted on the Province of N.B. website.

Thom Erdle & Chris Ward University of New Brunswick -
COMMENT 15
Don Roberts CIBC World Markets Inc. & Peter Woodbridge Woodbridge Associates Inc. – COMMENT 28

New Brunswick should have as its goal an FSC-Certified Forest (Forest Stewardship Council – Certified Forest).

FSC certification is internationally recognized as the most rigorous environmental and social standard for responsible forest management.

It is the only forest certification system supported by groups such as the World Wildlife Fund Canada, Greenpeace, Sierra Club of Canada, and the National Aboriginal Forestry Association.