Atlantic Forestry November 2015

Too much wood, not enough information
by David Palmer
    When Jason Killam, J.D. Irving’s silviculture manager, proclaimed in an official tone at the fall meeting of the Canadian Woodlands Forum that “round wood pulp wood is dead,” he was merely confirming what woodlot owners have pretty well known for a decade. It was always assumed there would be a home for the saw logs though. 
    However, as the second round of sawmill market closures rolls across New Brunswick, some woodlot owners are beginning to wonder if all those promises about great saw log and stud wood markets that would result from investments made under the N.B. Forestry Plan will ever materialize. 
    First it was Irving with too much wood and a one-week shut-off back in August. Then it was quotas on log deliveries to certain sawmills. Now, the Twin Rivers sawmill at Plaster Rock has too much wood, despite the fact they’ve got a third shift running. So they’ve announced a two-week shut-off of all wood deliveries from Oct. 26 to  Nov. 9 in order to address and control a surging inventory.   
    It’s unusual for Twin Rivers to shut off private wood, even if they have too much. Historically, they’ve always managed to keep taking private wood from local suppliers, and in so doing, have practiced their own form of primary supply. It’s hard to say what might have changed – new owners, new CEO, new attitude perhaps. Certainly Claude Pelletier, the now-retired, longtime manager of the Madawaska Marketing Board, was always quite effective in persuading company officials to do the right thing. Some say he had a silver touch, and always used honey before vinegar in his dealings with people. Without Claude to remind the company of their corporate conscience, they may simply have forgotten the importance of keeping local people happy.
    At any rate, clearly the balance between supply and demand is out of whack, and once again it may be Crown wood creating the imbalance. According to the Crown Lands and Forests Act, private wood is entitled to a proportionate share of the market, and the minister is obliged to make sure that happens. The auditor-general examined that very topic in a report filed in June, and concluded that proportional supply from private woodlots hasn’t been planned for, monitored, or reported on since 2002. When a government doesn’t, or won’t, take the necessary action which is its legal duty to protect its citizens, it leaves those citizens with a hopeless feeling. Short of going to court to protect one’s rights, what earthly action is available?

    Speaking of hopeless feelings, officials at Irving Paper are suffering, too, as they consider their limited response options to a final American decision to impose an 18.85 percent duty on the company, worse than the preliminary duty of 11.19 percent levied in July. In imposing the tariff, the U.S. Department of Commerce agreed with members of the U.S. Coalition for Fair Paper Imports who alleged that Irving Paper and other Canadian manufacturers of glossy paper have received subsidies which give them an unfair advantage in the market at the expense of U.S. paper makers. The DOC investigation studied Port Hawkesbury Paper and Resolute Paper in detail, and then applied the average to Irving Paper and Catalyst. Irving spokesperson Mary Keith said, “Despite numerous requests by Irving Paper, the Department of Commerce refused to conduct an investigation of our company.” Irving is understandably outraged. It certainly would be frustrating to be lumped together with other companies if you believed your situation to be unique and different. 

    Another outfit experiencing some frustration in New Brunswick is Danny Anderson and the shareholders of Miramichi Lumber, of which he is the manager. Anderson’s group has commenced legal action against the government, claiming DNR failed to provide all of the Crown wood allocation the mill was entitled to. The case went to discovery in September, and since those proceedings are confidential, nothing is known of the outcome.
    Anderson said he has repaid outstanding timber royalties owed to the province for 2012, 2013, and 2014, but still owes $800,000 for 2011. He said he submitted a payback plan for the 2011 royalties but has not received a response, and was denied access to Crown logs cut the previous season until the outstanding amount is paid. The insurance proceeds from a fire at the mill in January 2015 were payable to the province as security against an earlier loan. Anderson said he was counting on that money to repair the damage caused by the fire, but the province will not sign the insurance cheque over to him.  
    There’s clearly more to the story than has been publicly revealed, but it’s an unfortunate deadlock that consumes energy and resources that could be better spent on rebuilding the Miramichi economy.  

    Of all the stories that have come our way recently, the most intriguing and secretive one is that of the mysterious circumstances surrounding the departure of the Maritime Lumber Bureau’s former CEO Diana Blenkhorn. The MLB has refused to comment on the matter, nor has it issued a statement. In some ways I sympathize with the MLB. As a former manager of an organization often in the news, I sometimes had to fend off unwelcome, pointed questions from pesky media types. Often the calls for comment came before I had personally heard the announcement that I was being asked to comment on. One’s response would be much more cogent, thoughtful, and diplomatic if only one had 24 hours to think about it, but that wasn’t how media worked – they wanted their comment now. 
    In the long run, it is usually better to provide at least minimal comment on the story. It often forestalls the uninformed speculation that may follow if the answer to the question is “no comment,” or worse still, no response at all. When a 38-year veteran of the softwood lumber wars is summarily whisked out the door by her high-profile employer without an explanation to the public, it doesn’t bode well for the organization.