A new funding formula for silviculture investments on private woodlots will see the contribution level from landowners reduced to 10 per cent this year, New Brunswick Natural Resources Minister Wally Stiles announced in April.
“Government recognizes the difficult circumstances that private woodlot owners are in due to poor market conditions, and we have adopted a flexible approach that is balanced and equitable,” said Stiles. “This new formula will encourage landowners to invest in silviculture even during downturns in the industry.”
Stiles said that maintaining investment in silviculture is essential in order to ensure a sustainable wood supply so that the forest industry remains an important economic contributor to a self-sufficient New Brunswick.
“Our government has budgeted $6 million in 2009-10 for silviculture operations on private woodlots, and we want private woodlot owners to be able to use this money to carry out silviculture operations on their woodlots,” said Stile. “With this change, government will contribute $90 for every $10 invested by the landowner.”
Ken Hardie, manager of the New Brunswick Federation of Woodlot Owners, said that woodlot owners and the federation are very pleased to see the amended funding formula for woodlot silviculture.
“This is an example of the government understanding the challenges faced by woodlot owners in investing in silviculture with the current downturn in the forest industry,” said Hardie. “Minister Stiles has on frequent occasions indicated his commitment to work with woodlot owners. This announcement is an indication of that commitment.”
Under the new system, the funding ratio will be established annually based on the previous year’s total wood sales from private woodlots. The lower the sales, the smaller the percentage that private woodlot owners will have to contribute in order to receive public money for silviculture operations.
“This system will be fairer to all parties, and addresses the needs of private woodlot owners, industry and government,” said Stiles. “We all want silviculture operations to continue on private woodlots, and we recognize that this is difficult when markets are down and sales are low, as they are today.”
Under the new formula, when the previous year’s sales on private woodlots are:
lower than 1.25 million cubic metres, government will contribute 90 per cent of the cost of silviculture operations; between 1.25 and 1.75 million cubic metres, government will contribute 80 per cent; between 1.75 and 2.25 million cubic metres, government will contribute 75 per cent; between 2.25 and 2.75 million cubic metres, government will contribute 60 per cent; and more than 2.75 million cubic metres, the cost will be shared 50/50 between government and private woodlot owners. “This system recognizes that when markets are strong, private woodlot owners will be better able to contribute a greater percentage toward the cost of silviculture operations on their land,” said Stiles. “This sliding-scale formula is fair to private woodlot owners and fair to taxpayers.”
The $6 million that government budgeted in 2009-10 is for planting, thinning and other approved silviculture treatments. The same amount was budgeted last year, when the funding formula was a 70/30 split. However, private woodlot owners reduced their silviculture investments, and only $4.8 million of the public money was used.
“We want to see all the money that is budgeted used so that we have the wood supply we need in the future and also to create jobs today,” said Stiles.
Private woodlot owners have been hit hard by the closure of several pulp mills in New Brunswick and Maine, and by a reduction in sawmilling operations as a result of the poor housing market in the United States. Wood sales from private woodlots have fallen from more than 2.3 million cubic metres with a value of $98 million in the 2004-05 fiscal year, to about 950,000 cubic metres with a value of $41 million in 2007-08.
Figures for the 2008-09 year are being compiled from the province’s seven marketing boards, but are expected to be even lower than the previous year.
“Our government is committed to helping private woodlot owners through these challenging times,” Stiles said. “I’ve said publicly that my two major priorities are to increase silviculture spending on both Crown and private land, and to find ways that private woodlot owners can sell more wood. The new funding formula is a start, and a clear signal that we are looking for innovative ways to support our private woodlot owners.”