New Brunswick Woodlot Owners Question Province’s Timber Royalty Collection Methods During 13-Month Lumber Market Price Surge

Taking full advantage of the higher lumber prices being charged by sawmills and the increased profitability those prices were generating during the recent 13-month lumber price surge, Alberta raised the price of logs coming off the Crown’s land several times and collected additional timber royalties. The practice helped the province’s financial situation.

On the other hand, New Brunswick provincial government continued with their steady but stable approach. Had New Brunswick followed the Alberta model they would have collect more than $200 million in timber royalties. After choosing not to, the province settled for less than $70 million.

The decision still mystifies the president of the New Brunswick Federation of Woodlot Owners, Rick Doucett. According to the Canadian Broadcast Company (CBC), Doucett said that since New Brunswick lowered timber royalty rates in 2008 when lumber prices were low, it should have raised them when they were high.

“You could collect that money, put it in the coffers of the province and the mills themselves will still be doing quite well. So, there was an opportunity there to do something, and it’s quite perplexing as to why they didn’t move on it,” Doucett added.

In May, New Brunswick Natural Resources and Energy Development Minister Mike Holland said, “We have a steady stable approach to our timber royalties to provide consistency and also to make sure we don’t leave money on the table.”

Holland said a side-by-side comparison of Alberta and New Brunswick timber royalty systems over 5-years showed New Brunswick’s generated $52 million more revenue. That was in March — according to the Canadian Broadcast Company (CBC), by the summer, those numbers had flipped.

FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
Original Source:
Soaring lumber prices triggered look at "profitability" of N.B. forest companies, but no action