High lumber prices not trickling down, say woodlot owners
Woodlot owners say that while the cost of lumber has skyrocketed, the royalties they get for roundwood haven't
Lumber prices have skyrocketed as more people do renovations and new builds during the COVID-19 pandemic.
And while retailers and mills are reaping the rewards of increased demand, the same can't be said for woodlot owners.
Rick Doucett, the president of the New Brunswick Federation of Woodlot Owners, said the royalties paid to woodlot owners for raw materials have not increased during the pandemic even as the prices for finished lumber has gone up.
"The expectation [is] when you [see] the price of lumber increase to that amount, you would see a corresponding increase in price of roundwood, which is used to make that particular lumber," said Doucett.
"In this particular case, even though there's been… record setting lumber prices, we're certainly not seeing record setting roundwood prices. In fact, we're not even seeing increases at all."
Doucett said the price of finished lumber, the kind you would buy in a hardware store, has skyrocketed.
"Lumber prices over the last six, seven, eight months have have gone up over 100 percent," said Doucett.
"Back in June on the Natural Resources Canada site, the price for two by fours per thousand [board feet] was $600. And in September, it was $1,300 per thousand [board feet]."
Doucett said the issue is that the price paid by mills is determined by how much lumber they have in lumber yards.
They can get a lot of lumber from Crown land, and Doucett says the province isn't selling that wood at a competitive price, which hurts woodlot owners.
"Because we have a large supplier of wood, basically the Crown, that doesn't seem to care whether they make any money selling wood, that wood supply gets into people's yards and it creates an inventory issue that is used to keep the prices of what needs to be paid for private wood down," said Doucett.
The disparity is so deep Doucett said he didn't cut any wood on his lot this year because he didn't feel he would get a fair return on value.
Doucett said in other jurisdictions, like Alberta, harvesters pay wood royalties on a sliding scale based on the price of the finished product.
Pushing for change
He said New Brunswick doesn't do this, and it's in the best interest of the mills for this arrangement to continue.
"I suspect that those that would have to pay those royalties, you know, on a sliding scale, based on the value of finished products, are putting up an argument why that might not be beneficial to New Brunswick," said Doucett.
"I'm not privy to that argument, but I do know that other jurisdictions have moved in that direction."
Doucett said the federation has lobbied successive governments to change legislation to make the arrangement more equitable for woodlot owners, so far with no success.
"The original Crown Lands and Forest Act has been gutted by amendments that served only one part of the equation, which is basically the interests of the industry," said Doucett.
"We made many suggestions to many governments as to what amendments need to be either replaced or put back into the Crown Land and Forest Act to bring some fairness back into the system. But nobody's moved on it."
With files from Information Morning Fredericton