Wood marketing board taken over by Forest Products Commission

All the directors of a wood marketing board have been suspended in the wake of a failed business venture that was supposed to revive a dormant Fredericton sawmill.

The New Brunswick Forest Products Commission has taken over the running of the York-Sunbury-Charlotte marketing board, whose mandate is to sell wood from private woodlots to forestry companies.

The commission says in a press release that the board’s involvement in Maritime Fibre and Energy Ltd. was an “unsound business practice” that could “prejudice the interests of the private woodlot owner producers” it is supposed to represent.

The involvement in the mill was also “outside the scope, purposes or powers” of the board, the release said.

But the lead investor in the plan says the initiative sprang from good intentions: a desire to revive the former M.L. Wilkins and Son Ltd. sawmill as a member-owned co-operative.

“I’m broken-hearted and sad,” says Murray Munn, the lead investor in the $2-million project. “It hurts. It does.”

I’m broken-hearted and sad. It hurts. It does.- Murray Munn, lead investor

Munn is a critic of provincial forestry policy that he says is designed to favour large forestry companies that hold leases to cut wood on public land — an arrangement that he says amounts to a massive subsidy.

He used his own woodlots as collateral to borrow money to invest because, he says, he wanted to help woodlot owners and other investors create an alternative buyer for wood from private woodlots, he says.

“I thought it was an excellent idea,” he says. “That’s why I was willing to invest in it.”

The 79-year-old businessman has worked in forestry for six decades and was instrumental in setting up the York-Sunbury-Charlotte marketing board decades ago.

The plan was to acquire the Wilkins mill, which closed in 2007, and let investors run it and eventually acquire it through a lease-to-own agreement. The co-op proposal attracted 52 member-buyers.

The mill ran for a few months last winter but lacked enough capital to keep going because not enough investors were willing to take a risk early in the game.

Other potential investors “want a sure thing. Their point is, `Yeah, we’d’ invest in it when you prove it’s running and making money. We’ll come on side.’ Really, that’s not when you need them.”

No one from the forest products commission was available for an interview Monday.

In a press release, the commission says it became “concerned” about the marketing board after an audit of its books last August. The commission oversees the seven marketing boards around the province.

It said its goal is to ensure the York-Sunbury-Charlotte marketing board is “financially secure” enough to protect the interests of its 7,100 woodlot owners.

Munn’s son Keith, one of the board’s directors, says the commission was aware of the Maritime Fibre plan all along, and didn’t object until things went bad.

“I, as the secretary of the marketing board, take the minutes, and they get the minutes every month,” he says. “They knew of the involvement and how deeply the marketing board was getting into the mill project.”

Keith Munn says it wasn’t clear to the board how hard it would be to persuade woodlot owners to invest. “We didn’t realize how poorly private owners were doing,” he says.

The Wilkins mill employed 70 people when it closed in 2007. Murray Munn says the new operation might have employed a hundred at full production.

He says it’s unlikely now it will run.

“We’ve looked at some options. There’s still some options, but they’re slim.”