The New Brunswick government still hasn't implemented a two-year-old recommendation to give private woodlot owners a more reliable share of the wood being sold to major forestry mills.

Officials from the Department of Energy and Resource Development said staff are "continuing to work" on the recommendation from a 2015 report by Auditor General Kim MacPherson.

At the time, the department said it would either comply with the law or suggest that it be changed.

"That could be legislative changes, or it may be, if we can figure out a way to approach the legislation that's there today, it may not be legislative changes," Assistant Deputy Minister Tom MacFarlane said Tuesday at meeting of the legislature's public accounts committee.

"Neither has happened so far, right?" asked Green Party Leader David Coon.

'The only thing we know for sure is you're still not complying with the regulation, correct?' - David Coon, Green Party leader

"I think we're continuing to work on that recommendation," MacFarlane said.

That prompted a laugh from Coon. "Which part?" he asked.

MacPherson wrote in 2015 that the province was not complying with a section of the Crown Lands and Forests Act.

It says the minister of natural resources "shall ensure that private woodlots are a source of wood supply consistent with the principles of proportional supply and sustained yield."

MacPherson said at the time that while private woodlot sales were growing, they represented a smaller share of overall wood sales to mills in the province.

At the same time, wood harvested by major forestry companies on leased public land made up a larger share.

'Not a straightforward process'

MacFarlane said Tuesday the department still hasn't decided whether to seek a change to the law or to go along with it. "We haven't concluded which direction we're going to be going in," he said.

"The only thing we know for sure is you're still not complying with the regulation, correct?" asked Coon.

MacFarlane responded that "in our minds we're complying with aspects." But he added, "It's not a straightforward process, I guess, which is why we need to work with all the parties to work on an appropriate solution."

Auditor General Kim MacPherson

New Brunswick Auditor General Kim MacPherson said in a 2015 report the department had a bias toward economic development and industry in managing the Crown forest, had weak oversight of private wood supply and was not complying with the Crown Lands and Forests Act. (Maria Burgos/CBC)

The dwindling share of wood from private woodlots was cited by U.S. forest industry groups when they argued that the New Brunswick industry was now subsidized at a level that warranted trade sanctions.

MacPherson's 2015 audit said a pilot project was launched by the department in 2008 to work on the issue.

But she wrote it faced "substantial challenges," in part because companies harvesting on Crown land challenged some of the powers of marketing boards that represent woodlot owners.

The dispute couldn't be settled and the pilot project ended in 2012.

Department officials told MacPherson more work on the issue was put on hold after the Alward government introduced its forestry plan in 2014.