New Brunswick minister letter to Crown Licensees, Sub Licensees advised of intent to implement upward adjustment to Crown timber royalties when commodities exceed normal ranges; potential negative impacts on long-term sustainability if structured poorly

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July 6, 2022 (press release) –

On June 28, Minister Holland issued a letter addressed to the New Brunswick Crown Licensees and Sub Licensees advising them of the government’s intent to implement “an upward adjustment that would be made to Crown timber royalties when commodity prices are above normal ranges.”


While studies have shown that stumpage prices do not correlate directly with downstream lumber prices, the New Brunswick Lumber Producers understand the Government of New Brunswick’s position that increases to royalty rates for Crown Timber might be warranted when commodity prices are extraordinarily high, particularly given the lag in time between the Government’s survey of private stumpage prices and implementation of new Crown stumpage rates,” said Jerome Pelletier, Vice President of J.D. Irving, Limited’s Sawmill Division and Chair of the New Brunswick Lumber Producers. “Nevertheless, we are disappointed by the lack of transparency and details associated with the Government’s proposal.”


If the system proposed by the Minister is not properly structured, there is tremendous potential for severe and negative impacts on the long-term sustainability of New Brunswick’s forest products industry. A healthy forest products industry is vital for New Brunswick’s economy, supporting thousands of local jobs and generating demand for Crown and private timber alike. Failure to implement a transparent system that is consistent with the Crown Lands and Forests Act might also have negative consequences for New Brunswick sawmills in the ongoing softwood lumber dispute with the United States.


In the interest of full transparency, we trust the Government will publicly share immediately the details of the indexing system and procedures that will be used to calculate the upward royalty adjustment.

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Contact:
Anne McInerney
(506) 651-9092


About the New Brunswick Lumber Producers (NBLP)


The New Brunswick Lumber Producers are an integral part of New Brunswick’s forest value chain, operating in 15 rural communities and representing 95 per cent of the softwood lumber production in the province. The NBLP are the largest wood buyers for the local private woodlot owners, supporting thousands of mill employees, professional loggers, truckers and silviculture workers, in all regions of New Brunswick. The NBLP are also the largest supplier of wood chips, biomass and sawdust, which are the key ingredients in the manufacturing of New Brunswick pulp, paper and wood pellet products.


Members:
J.D. Irving                                                  Limited Marwood Ltd.
Chaleur Forest Products                               Delco Forest Products
Devon Lumber Co. Ltd.                                H.J. Crabbe & Sons
Twin Rivers Paper Co.                                  North American Forest Products

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