Province of New Brunswick Proposes Reductions in Timber Royalty Fees

Seven months after raising royalty rates on timber harvested in provincially owned forests, the New Brunswick provincial government is proposing up to $50 million in reductions, according to CBC News (5-1-23). Some rates will fall all the way back to where they were a decade ago.

Last summer, Minister of New Brunswick’s Natural Resources and Energy Development (NR&ED) Mike Holland publicly announced that timber royalties were increasing on trees cut by the forestry industry on provincially owned land, a belated but heavily promoted effort to profit from two years of record high lumber prices. At the time of the increase, the government said the higher royalties were meant to help finance a new private woodlot sustainability fund with the purpose of helping smaller private woodlot owners’ manager their lots more efficiently.

Last week, in a posting on the province’s Public Review of Draft Regulations website cited by CBC News, the NR&ED listed several proposed changes to timber royalties that are charged to New Brunswick forestry companies. The most significant is a 46% reduction in the charges for softwood sawlogs and stud wood used by New Brunswick sawmills to manufacture both high and low grades of lumber.

Based on current royalties and historical volumes cut on public land, CBC News says the price drop will likely cost the province and save forest companies $50 million (CAD) in fees in 2023. The lower government log prices will also deter forestry companies from harvesting logs on private woodlots.

Unlike the increases which took effect last September after months of deliberation and a 60-day waiting period before changes in fees are normally implemented, reductions on the proposed changes will be faster. If approved, they are to take effect retroactive to April 1st.