New Brunswick

Finance minister stumped when higher timber royalties suggested as revenue source

Opposition parties say the New Brunswick government overlooked an obvious source of revenue — higher royalties on the increasingly valuable timber taken from Crown land — when it put together the budget presented this week.

N.B. hasn't seen rate increase since 2015 for timber harvested on Crown land

One industry that has done well during the pandemic is the lumber industry, says Green Party Leader David Coon. (CBC)

Opposition parties say the New Brunswick government overlooked an obvious source of revenue — higher royalties on the increasingly valuable timber taken from Crown land — when it put together the budget presented this week.

But when pressed on the question, Finance Minister Ernie Steeves was short of words.

"I'll tell you the truth, I'm not familiar on that one," Steeves said during the New Brunswick Political Panel.

Green Party Leader David Coon, also on the panel, said the province is leaving "millions" of dollars on the table while it deals with falling revenue because of the COVID-19 pandemic.

One industry that has done well during the pandemic is the lumber industry, Coon said, but the royalty rates paid to the province on timber cut on Crown land haven't gone up since 2015.

"If anyone's been buying a two-by-four or a piece of plywood lately, they know how expensive that is," said Coon. 

"Yet they're continuing to sell timber to the companies working on Crown lands at the same price as six years ago."

Lumber and construction industries saw a boom during the summer of 2020 as the pandemic left people unable to travel or spend money on entertainment.

Many New Brunswickers decided to do renovations or build new structures, which led to shortages of materials and to  price increases.

"Here we are needing any amount of revenue that we can use, and timber royalties haven't changed despite the lucrative lumber market these days," said Coon.

"That doesn't seem right at all to me."

Coon said the auditor general has said the natural resources minister had been ignoring legislation by not revising timber royalties. 

The province is heading deeper into debt with the budget presented this week. On the panel: Finance Minister Ernie Steeves, Rob McKee for the Liberals, David Coon for the Green Party, and Kris Austin for the People's Alliance. 32:07

People's Alliance Leader Kris Austin said he agrees with Coon's assessment and said increasing the rates would not only help government coffers, but private woodlot owners as well.

"I think in doing so [you] can also have a ripple effect and help the private woodlot owners that have been crying for a long time in regards to what they're getting off their land," said Austin.

Liberal MLA Rob McKee said private woodlot owners have long asked for a revising of rates that companies have to pay for wood cut on Crown land.

"They're feeling like they're getting pushed out of the market," said McKee

Steeves said he would consult Natural Resources Minister Mike Holland on the issue.

"I'll go and talk to Minister Holland and get more information on it," said Steeves.

With files from Information Morning Fredericton

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