Industry dispute with wood marketing boards needs government action, says ex-minister

Former New Brunswick natural resources minister Jeannot Volpé says it is time for the province to show leadership in the dispute between industry and woodlot marketing boards.

Volpé says the government should consider a requirement that industrial players like J.D. Irving, Limited. buy a portion of their wood from New Brunswick's forest product marketing boards as a condition for access to trees on Crown land.

The so-called "primary source" rule was abandoned in 1992 but should be reintroduced on a trial basis, says Volpe, who was minister of natural resources and energy from 1999 to 2003 in the Bernard Lord government.

Volpé says a current lawsuit launched by J.D. Irving will only do more damage to already struggling woodlot groups.

"Going to those courts costs a lot of money," said Volpé. "And for a marketing board to invest $100,000 in a court case, it's a lot of money. For a big company who will recover it over cheaper wood long-term, it's an investment."

Lawsuit filed by J.D. Irving

J.D. Irving has filed a legal action against the SNB Forest Products Marketing Board and the SNB Wood Co-operative.

The lawsuit asks the Court of Queen's Bench to declare a contract between the SNB Forest Products Marketing Board and its sister group, the SNB Wood Cooperative, unlawful.

It is the latest in a series of moves by J.D. Irving to break the hold New Brunswick's wood marketing boards have over sales from private woodlots.

At the root of the case is a January 2016 order issued by the co-operative declaring that wood from private woodlots can only be sold to the marketing board, and wood purchasers can only buy from the board.

The dispute dates back decades but the most recent round began in 2012 when J.D. Irving Ltd. stopped signing contracts to buy wood from the SNB Forest Products Marketing Board.

Along the way, J.D. Irving Ltd. lost appeals to both the New Brunswick Forest Products Commission and the New Brunswick Court of Appeal.

Despite those setbacks the company continues to contract wood sales directly with private woodlot owners, rather than with SNB. 

It has also filed a second appeal to the Forest Products Commission arguing that the SNB board's order is not valid.

It seems like industry's got all the cards.- Jeannot Volpé, ex-natural resources minister

Volpé says there have been times in past decades when marketing boards failed to honour contracts made with the big companies.

But the pendulum, he says, has swung in the other direction.

"Right now it's moved to the other way around where it seems like industry's got all the cards," said Volpé. "This is for government to decide and [they] don't seem to be ready to do it."

Irving defends its purchase record

In a written statement J.D. Irving vice-president Jason Limongelli defended the lawsuit and the company's record of purchasing from private woodlots.

"This is not a lawsuit against woodlot owners or wood producers," said Limongelli. "The application is intended to prevent disruption to the flow of private wood and protect the manner in which wood purchases have been successfully conducted over the past number of years."

The company's allegations have not been tested in court.

• J.D. Irving launches suit against woodlot groups
• J.D. Irving and woodlot owners feud over price
• J.D. Irving Ltd. loses private wood appeal

Limongelli goes on to say the company's purchase of private wood has increased 200 per cent over the past 10 years.

"This year, JDI's private wood and stumpage purchase programs resulted in a record volume of private wood purchases," said Limongelli.

"The company has purchased 46 per cent more wood than last year, and are on track for the highest volume of private wood purchases in the company's history."

J.D. Irving did not respond to a question by CBC News for the company's position on the role of the forest product marketing boards.

Jean Bertin responded in an email on behalf of the government, which he said supports "the current practices" for wood flow.

"Private wood harvest levels have steadily increased since 2010 and continue to flow at high levels in 2016/17. Private woodlot volumes have returned to similar levels experienced before the economic downturn in 2007.

"With the current levels of private wood harvesting back to historic levels, there does not appear to be a market issue."

Bertin said the closure of pulp mills has created an oversupply of low-grade material in the Atlantic region and the province is looking to find other uses for low-grade material.