New Brunswick Report

Market Based Private Land Silviculture Funding Formula 

Last fall, the private land silviculture program in New Brunswick was reduced to $4 million from the previous season's $8 million. In addition to the funding cuts, the landowner share of the treatment costs was increased to 50%, up from the historical level of 20%. This alone would cause a major drop in silvicultural activities.

Rural New Brunswick did not take this lying down. The New Brunswick Department of Natural Resources and the New Brunswick Federation of Woodlot Owners arrived at a workable solution: a $6 million program with the expectation that landowners would contribute 30%. Last years program uptake was about $4.8 million.

All this happened while markets for wood products from private lands were drying up.

Harvesting

The business of being a woodlot owner is more difficult than ever. Markets have continued to tank in New Brunswick. Gross sales of wood from private woodlots have fallen from a recent high of $97,883,305 in 2004-05 down to $41,371,010 in 2007-08 and 2008-09 is expected to be close to the $33 million mark.

These are alarming provincial gross sales figures, but more alarming are some of the harder hit regional values. The trees are still standing and continue to grow. The challenge will be mobilizing wood from private lands once harvest levels return to a more normal state.

Silviculture

The new 2009-10 funding formula is based on a $6 million dollar program with a graduated landowner participation based on the previous year's provincial harvest levels on private lands. The idea is that when harvest volumes are up, there would be landowner confidence in investing in silviculture on their property. Conversely, when volumes are low, as they are now, the lower landowner contribution percentages would contribute to maintaining some level of activity.

The current AAC for private woodlots in New Brunswick is about 3.6 million m3. The 2003-04 harvest was around 2.5 million m3, and that was a good year. The harvest levels are now at/or below the 1 million m3 mark requiring only a 10% landowner contribution. It is expected a lower landowner contribution level will revitalize the private lands silviculture program, improve landowner confidence, and encourage participation in the program.

It should be noted that the $6 million program includes a 20% administration component totaling $1.2 million to cover operating costs associated with the program at the marketing board level.

Under the current market conditions for private wood, the rationale for undertaking private land silviculture could be questioned. The response is based on principle and an emerging level of cooperation between the New Brunswick Federation of Woodlot Owners and the New Brunswick Department of Natural Resources

"The challenge will be mobilizing wood from private lands once harvest levels return to a more normal state."

First, a renewed silviculture program will improve the value of the average private woodlot in terms of volume and quality. Second, the issue of markets and market access is being addressed indirectly by another proactive initiative, "Equitable Market Access", which effectively gives the seven forest products marketing boards "single desk selling" status for all wood harvested on private lands. This should improve both the economic and business case for a silviculture program aimed at improving fibre production on private lands.

In addition to the provincial silviculture program, the Atlantic Canada Opportunities Agency (ACOA) has made available an additional $1.75 million for silviculture over each of the next two years. While this is outside the provincial mandate, the province will be monitoring 10% of the sites receiving the ACOA funding. ACOA's contribution effectively brings the private lands silviculture program back up to $7.75 million.

The new and improved graduated private lands silviculture program and equitable market access initiative have been met with enthusiasm by the New Brunswick Federation of Woodlot Owners and the seven forest products marketing boards. There has been quite a turn of events in the last twelve months.