Committee Suggests Cure For Ailing Forestry Sector

June 04, 2008

By: Marc Hudson – The Daily Gleaner – June 4, 2008

New Brunswick’s forest industry will continue to lose jobs but a parliamentary report outlining strategies to revitalize the sector is providing hope that relief is coming soon, said the president and CEO of the New Brunswick Forest Products Association.

The sector shed about 33,000 jobs nationally during the past give years, with more than 3,100 cuts in New Brunswick due to a series of mill closures in Fredericton, Miramichi, Dalhousie, and Bathurst.

“There have been causalities,” said Mark Arsenault during the telephone interview Tuesday. “We expect that there will be more. We know that the bottom of the curve is not there yet, but we are very optimistic for the coming years.”

A group of forestry industry leaders were in Ottawa on Tuesday as members of a standing committee on natural resources tabled their report in the House of Commons about the future of the country’s forestry sector.

The report makes 23 recommendations to help revitalize the industry, including asking Prime Minister Stephen Harper to convene a national summit on forestry and the need to explore more intensive use of bioenergy from wood products.

Avrim Lazar, president and CEO of the Forest Products Association of Canada, said  the industry’s fortunes should begin to shift next decade as the U.S. housing market rebounds and demand sours for commodities from emerging economies such as India and China.

“Canadian forest products will be in tremendous demand in the future and prices are going to be high,” he said. “Scarcity of natural resources, scarcity of land for growing crops, and scarcity of land for growing biofuels is going to make what we have in Canada a rare and wonderful resource.”

Arsenault said the report opens the door to more opportunities for diversification, adding the emerging bio-economy – producing ethanol and plastics from wood-waste and powering mills through green technology – is at the roof of a strategy to reduce costs and help the industry become more efficient.

“This could be a great relief,” he said.

Tobique-Mactaquac Conservative MP Mike Allen, a member of the standing committee, said many paper mills throughout New Brunswick have time to rebound if the right investments are made.

He said upgrades to mills are needed to make forestry in the province competitive again.

“We have an average 25 to 30 year old stock in eastern Canada versus out west and in Finland where it’s five to seven years old,” said Allen.

Many mills in New Brunswick missed the last opportunity about a decade ago to invest  in technology and modernize when the dollar was below 70 cents, he said.

Allen said new rules to help accelerate capital cost allowance might also help the industry deal with some of the financial hardships of retrofitting.

“It’s also going to take an emphasis on research and development, and value- added products,” said Allen. “That’s why we need to make sure we spend those dollars in those areas.”

Lazar said despite the new plan, he doesn’t expect the changes to supplant all the job losses.

Arsenault said he also doesn’t expect a return to the days when New Brunswick sported a complement of 85 mills.

However, he said as operations continue to diversify, the rapid increase in bio-products will help spur on job creation.

“Some of our mills have become incredibly efficient, incredibly lean and produce a better product at a lower price,” said Arsenault. “They’re still not out of the hot water, but it’s part of a forced transformation that’s taking place. When the rebound comes, we’ll be well positioned.”