STANDING COMMITTEE ON RESOURCES
Mr. Neil LeBlanc
MR. CHAIRMAN: My name is Neil LeBlanc. I am the Chairman of the committee. Maybe I could just have the committee introduce themselves.
[The committee members introduced themselves.]
MR. CHAIRMAN: We have three witnesses here today, Harold Alexander, who is in the centre, Ed Chisholm on the right and Greg Shay on the left. I would like to thank you for coming here today and I will indicate that we did have another witness who made some presentations on silviculture the other day and it gives us a chance to get a different perspective. Most of our witnesses make some opening comments, presentations, and we invite you to do so. After that, we will go into the questions and answers by the committee.
MR. HAROLD ALEXANDER: Thank you very much for the opportunity to come and speak to you today. Forestry is a very important issue for us in western Nova Scotia and particularly in Digby and Annapolis Counties. As Neil said, my name is Harold Alexander. I am a forester by trade. I have lived and worked in Digby County for 19 years. I run a small sawmill operation and also a forest management operation where we cut wood for our own mill and we also sell the by-products to other mills. My partner and I have two to three employees full time, year-round, besides ourselves.
MR. ED CHISHOLM: My name is Ed Chisholm. My brother and I used to run a silviculture contracting company. I am now employed with the Western Valley Development Authority in Digby as forestry coordinator.
MR. GREG SHAY: My name is Greg Shay. I am the 1st Vice-President of the Maritime Lumber Bureau. I am the 1st Vice-President of the Nova Scotia Forest Products Association and I am the President of the Wood Product Manufacturers Association of Nova Scotia. I am here today in my capacity, and trying to confine my remarks, as President of Comeau Lumber Ltd., a group of sawmill and related companies in Meteghan, Digby County, Nova Scotia.
MR. ALEXANDER: I am the Chairman of the Western Valley Development Authority Forestry Committee and primarily I am the Chairman because nobody else wants that job. But anyway, we have heard that before.
MR. CHAIRMAN: That is pretty common.
MR. ALEXANDER: Anyway, our committee was formed shortly after the inception of the Western Valley Development Authority in 1994 and is a broad-based community effort to organize the forest sector in Annapolis and Digby Counties. Representation on the committee includes contractors, sawmillers, secondary manufacturers, woodlot owners, the Department of Natural Resources staff, and environmental interests. The committee usually meets monthly to address issues of common concern, including forest management and market opportunities. Forestry is one of the major sectoral employers in this region with approximately 1,500 full-time direct jobs in Digby and Annapolis Counties, based on comparisons to a 1994 report by Jim Parker.
The Western Valley Forestry Committee believes there is a tremendous opportunity to create additional sustainable jobs in forestry in our area if woodlot owners, industry and governments can cooperate to make it happen. As a committee, we are here today because we have grave concerns about the slow pace of development and implementation of government policies that will curb the destruction of our forest resources in Digby and Annapolis Counties.
I think probably for some of you, you may need a little bit of background, so I will just go over the recent history. There has been increasing concern over the past decade regarding over-cutting in the forests of Nova Scotia and a declining financial commitment from the federal and provincial governments for silviculture programs. In August 1993, the first meeting of the Coalition of Nova Scotia Forest Interests was held at the invitation of the then Minister of Natural Resources, Donald Downe. The focus of the coalition was concentrated on two main areas. Should we encourage woodlot owners to manage their forest lands using incentives and education or should we force them to manage their land through legislation? The second one was who should pay for small private woodlot management and who and how should the money and programs be administered?
Finally, after much debate the coalition produced a discussion paper for public review in July 1996. This is the document. This was followed by public meetings conducted by Voluntary Planning and Voluntary Planning produced a public response to the discussion paper in November 1996. This is the discussion paper that voluntary planning came up with. The discussion paper was not well received by those who responded in public. The panel Chairman for Voluntary Planning considered the process to be very important, however, and he offered the following commentary, "The process of developing and implementing a fair and balanced forest strategy for Nova Scotia has considerable urgency, and to delay the process would be socially and economically irresponsible.".
Meanwhile, another year goes by, and 1997 is a banner year for the forest industry, particularly sawmilling. Lumber prices are higher than they have ever been and the pressure on the forest and the small woodlot sector in particular, increases dramatically. We have an overhead we will show what the level of harvest does from 1993 to 1997. We have focused on small private woodlots because that is really where the increase in harvesting activity has taken place. You can see the per cent increases says it all at the end of the table at the top.
MR. CHAIRMAN: Has the large private woodlot harvesting increased dramatically also?
MR. ALEXANDER: It has increased somewhat but not even close to this. There has always been a fair amount of effort on large private lands and they just more or less continued along with a small little bit of a bump the last couple of years because of increased markets, probably. But the small woodlot sector is where it is happening and the real problem with this is not that these forests can't sustain this kind of harvest, it is the kind of harvesting that is going on. It is a free-for-all, it is rape and pillage, it is the worst kind of forestry there could ever be and I am sure you people see it on the rural roads when you drive the highways every day. That is why we are there.
In October 1997, the National Round Table on the Environment and the Economy releases its report, Private Woodlot Management in the Maritimes - State of the Debate. It took them 18 months of discussion, consultations and research.
Some of the highlights of this report from the press release, "The National Round Table on the Environment and the Economy . . . released a report . . . warning that current rates of private woodlot harvesting pose a serious threat to many Maritime communities . . . More than anywhere else in Canada, privately-owned forest resources are essential to the region's economy, social fabric and ecology. The existence of many Maritime communities will be severely jeopardized without a sustainable approach to resource management . . . The report points to three overarching problems related to woodlot management: overcutting of a declining resource, lack of silviculture and sustainable forest management practices, and lack of incentives and knowledge of sustainable woodlot management practices.".
Meanwhile, on the same day, October 7, 1997, the Nova Scotia Department of Natural Resources released its own report, entitled Towards Sustainable Forestry - A Position Paper, as a follow-up to the coalition's efforts. The Department of Natural Resources Minister Kenneth MacAskill, called this paper a blueprint for decisive action and leadership towards sustainable forestry in Nova Scotia. It is important to proceed without delay.
I would just like to add that before the election was called last fall, Mr. MacAskill introduced Bill No. 20 to the House, the Forests Act, and this bill died with the election. As far as we know, it has never been brought back to the House which, for us, is a very unfortunate thing. We could solve some of the problems we have in forestry in Digby and Annapolis Counties if we would bring this legislation forward, pass it and enact regulations to make it happen.
This position paper, Towards Sustainable Forestry, and this legislation that we are talking about here, will be the focus of our presentation today. The focus will be broken down into five categories: the Registry of Buyers, financial and technical support for small woodlot management, forest wildlife guidelines, a forest practices code, and stakeholder participation and input.
First, the Registry of Buyers. We agree with the establishment of a wood buyer registry as outlined in the position paper. We agree wholeheartedly with the need for accurate, up-to-date information on harvest levels. This registry is up and running. The deadline for registering with the buyers registry, for people who buy wood, was March 17, 1998. Over six months later we find that wood is still being exported out of our area by unregistered buyers. Also, there is still some confusion over who is legally responsible for registering exported wood, depending on when the wood is paid for. So there are some loopholes in the system.
Our committee believes that the Department of Natural Resources should address the problems with the buyers registry with due diligence to ensure that the wood harvest information is accurate and that the playing field is level for all registrants. It kind of gets us a little bit upset when we know that there are mills in New Brunswick that are buying wood from our area, round wood, that are not registered and the truckers trucking the wood are not registered. We find that maybe the woodlot owners, unbeknownst to them, are responsible for registering and we don't believe that the system was set up to work in this way. This is what we are saying. The buyers registry system is not working in the way that maybe it should work and we want the Department of Natural Resources to really take the bull by the horns and fix it up.
We also believe that the position paper's proposal that would require registered buyers to submit a wood acquisition plan for approval, stipulating how wood volumes to be sourced from Nova Scotia forests will be sustainable, should be enacted immediately and this proposal is in this legislation. In other words, companies have to show the government that
the wood they are buying is sustainable. We believe that this may be one way of slowing down the shipment of saw logs out of the province from our area. This is a very important issue for us.
Bay Ferries Limited reported to local DNR officials that during the month of October, 330 truckloads of round wood went from Digby to Saint John on their ferry. Assuming that this wood is mostly saw logs, this equates to approximately 2 million board feet of logs leaving our area every month. This is equivalent to approximately 30 per cent of the sawmill production in Digby and Annapolis Counties at present and is enough wood to support two sawmills the size of Comeau Lumber in Meteghan which directly or indirectly employs 90 people. This is an alarming situation for those of us who live and work in Digby and Annapolis Counties and we need to work with government to do something about it.
The second major point is the province should continue to provide financial and technical support for sustainable forestry on small private woodlots. This is what they said they were going to do and we agree that the province should be a funding partner in providing incentives to woodlot owners to encourage sustainable forestry practices on small private holdings. We agree with the Department of Natural Resources' strategy of encouraging partnerships between industry, woodlot owners and the Nova Scotia Government to establish sustainable forestry funds to help pay for woodlot management.
It is good to see industry committing time and money to help improve small woodlots. In our area several mills, like Comeau Lumber, and one forest management organization have management agreements in place and others are in the works. The problem now is that we have several agreements with different treatment rates and different rules. Getting industry involved was supposed to improve the efficiency of the system. It is now a nightmare for people like myself, registered cooperators, or silviculture contractors, to decide which agreement to use for each treatment or each woodlot. The existing program of having each company do its own thing needs to be streamlined. The Department of Natural Resources needs to show some leadership here.
The second major point on this subject is the Nova Scotia Government's declining commitment to funding for woodlot management. In 1995 the Nova Scotia Government committed approximately $6.5 million to silviculture on small woodlots. This amount has been slashed to $3 million in 1998. The value of the forest industry to the Nova Scotia economy in 1997 was approximately $1.3 billion according to Ian Spencer's report with over 13,000 people working in the industry.
We know that the forest industry in Nova Scotia generates hundreds of millions of dollars for both the federal and provincial governments in taxes. Yet the feds put in zero dollars to silviculture funds now and the Nova Scotia Government puts in $3 million which, to us, is a mere pittance for the amount of money that they are getting out of it.
The third point we want to make is that we agree wholeheartedly with the forest wildlife guidelines. They should be implemented and enforced on all lands, not just Crown lands. We believe that if there are any revisions to the existing guidelines, they should be reviewed with stakeholders before the legislation is enacted.
The fourth point, the forest practices code for Crown lands, the DNR position paper recommends that a forests practices code be developed and adopted for Crown lands and then encourage its use on private lands. Our committee does not believe this approach will slow down the unsustainable destruction of our small private forests. We believe that over 80 per cent of the harvesting on small private woodlots at the present time is unsustainable, in other words, indiscriminate clear-cutting with no follow-up silviculture effort.
So what they're suggesting is that they're going to develop a code for Crown lands and then they are going to try to encourage its use. We're suggesting this is not going to slow down the rape and pillage that is going on. We need laws and they need to be enforced.
Our committee believes that a forest practices code should be developed for each region of the province and become the law for all lands, through consultation with industry, woodlot owners and the general public.
We recommend that all forest operators will have to ensure that their operations are registered with the Department of Natural Resources, meet the requirements of the new forest practices code and have to be certified by the Department of Natural Resources. Registered buyers will be legally responsible to cooperate with the Department of Natural Resources to ensure compliance with the forest practices code.
Industry has recently shown that they are willing to help share the cost and responsibilities for managing small private woodlots. A grace period of one year should be sufficient for forest operators to become familiar with the code.
Finally, stakeholder participation and input. We agree with the establishment of community advisory committees. These committees need to have representation from the four main groups that have interests in our forests: woodlot owners, industry, government and the general public. It is critical that local DNR staff become members of these committees and become active players. These committees need to develop goals for their region and strategies that are sustainable and will benefit communities, industry, governments and woodlot owners. We believe that any provincial forum, coalition or forest sector committee, provincially, should be made up of representatives from community advisory committees. I have a few summary comments to make as well.
We know what the problems in forestry are. We have studied it long enough, we have written about it, we have got all of these reports that tell us the same thing. It is time for action. These are some of the things that we need to do: we need to get Bill No. 20 back in
the House and get the legislation passed; we need to develop the regulations to go with it pronto and get on with the job; the Department of Natural Resources needs to show some leadership with the buyers registry in developing forest practices codes, et cetera; and the province needs to commit more dollars to silviculture programs.
Governments continually take trees and the forest sector for granted, yet the well-being of our health care system, our education system, our roads and our social programs depends, to a large extent in this province, on a healthy forest industry that generates hundreds of millions of dollars in tax revenues for us. We need to wake up before it is too late. We all know the story about the famous codfish. Our forests are going down the same road. Please, please put the crisis in our forests at the top of your political agendas and keep it there until we make some substantial progress toward sustainable management of this critically important resource.
Finally, for those of us who work in the forest sector in Digby and Annapolis Counties and volunteer our time on the Western Valley Forestry Committee, it is very frustrating to see what is happening in our forests and yet feel helpless to do anything about it. At the present time we have no power to change what is going on in the forests where we live. It is time for the Nova Scotia Government to empower community advisory committees, like ours, and mandate the Nova Scotia Department of Natural Resources to work with us to solve the problems in our forests for the benefit of all Nova Scotians. Thank you.
MR. CHAIRMAN: Thank you very much. As a group, is that going to be your statement?
MR. ALEXANDER: That is our statement.
MR. CHAIRMAN: We have opened the floor for questions from the members and rather than go by block, we usually go with whomever wants to ask questions. Mr. Balser.
MR. GORDON BALSER: Mr. Chairman, you talked about the level of funding currently, with the province putting approximately $3 million into forest management practices. What would be, in your estimation and experience, the minimum level necessary to ensure sustainability? What level of funding would be adequate?
MR. ALEXANDER: I guess I cannot answer the question specifically because I do not have enough information on the total area of Nova Scotia that needs treatment and everything else. All I can tell you is that five years ago we spent $6.5 million and that was not enough to do the job, and the level of funding has been declining. With industry support like we have now, the level of government commitment does not need to be as high as it was, all the money does not need to come from government. What we need is a lot more than $3 million from government and the contributions we are going to get from industry. It is just not enough to go around.
MR. BALSER: You said that the bulk of the harvesting that is taking place on small private woodlots is of the rape and pillage style. Why is it that small woodlot owners are so reluctant to buy into the whole strategy of sustainability? What is the problem?
MR. ALEXANDER: Probably a lot of the problem is that there is not enough focus on good forest management. As an example, there used to be Group Ventures in this province which were partly funded by the provincial and federal governments. The funding to run those operations has been completely wiped out and they have been more or less left on their own the last five years. They wanted groups in the Digby area, Sissiboo Forest Management who used to offer services to woodlot owners, who used to contact woodlot owners and offer a program that, we will manage your woodlot, that company, the amount of activity that they are doing right now is very minor compared to what it used to be. It is just a very small fraction.
So, what is happening is, it is a free-for-all for the loggers basically, and the companies that want wood. They are approaching landowners and they are offering big bucks for their wood and they will start at one end of the woodlot and they will go right to the other, cut it all down, offer a big pile of money, but then the wood is gone, in a lot of cases going to New Brunswick and we are left with a liability as far as people living in those communities.
So, education is some of it. I do not like to use the term, lies, but just to give you another example, a woodlot owner who lives in Ontario called me about a year ago and he said - he got my name from a trucker - I have people who want to buy my wood. He said, would you go and have a look at it and tell me what it is worth so I know what I should sell it for; it's called a woodlot appraisal. He said they are telling me that it is right full of bark beetle and it is dying and it should be cut. So, I went and did a cruise of it and I found that less than 1 per cent of the standing trees on that woodlot were actually dead, which is very normal in a forest, to have 1 per cent of the trees dying. He had a small amount of bark beetle, but the contractor was using the bark beetle as a vice to get the woodlot owner to sell his wood. The guy was in Ontario, he said, your wood is dying. The guy could not see it himself, so luckily for him, he called me.
There is an opinion out there, by some people, that woodlot owners do not want to manage their land, but I am one of the people who has been involved with woodlot owners for almost 20 years. I believe with the right approach, the right education, the right strategies for managing woodlots so we can put some money in their pocket when they need it, and do a good job on the land, I think the majority of woodlot owners will participate in particular programs depending on what they are.
MR. SHAY: Can I comment on that as well? I think a lot of it does come to education of the landowner, but the other part of the equation is the economics and I think a lot of what is happening, or is not happening, is because of the fiscal structure we are now under federally and provincially. The small landowner right now is at a disincentive to spend or invest any
money on silviculture. He has no reason to do that because it is just money strictly out of his pocket. If he is an occasional landowner or woodlot operator, he has no recourse in the system to realize anything from his investment except maybe to add it to his cost base sometime down the road if he sells it. So, it is either liquidate it and take the cash and run - and that is part of the problem too these days is cash - or it is, not touch it at all in which case it puts more pressure on the standing timber to be harvested, because the total resource is not being maximized to its full potential.
[10:30 a.m.]
The other problem on the fiscal side is the capital gains problems and you have probably all heard about that. I know it is a federal issue, but it is one that we should not forget and should keep pushing for. I think it is time for an update of that structure and that system to parallel somewhat the advantages that the farmers have because there are a lot of parallels between the farming community and the woodlot sector. Right now a farmer has the opportunity to pass his farm, which may or may not include a woodlot, on to his sons. The reasons for that, I think, are very clear and I agree with the reasons, which are to encourage intergenerational transfers of agricultural lands and farmlands, whereas there is no opportunity for a gentleman to pass his woodlot on to his sons and realize the same advantages or tax deferrals. There, again, it is either liquidate it for cash, just pay your tax bill and take what cash is left or they will refuse to touch it. Again, it becomes over mature and not properly looked at or managed. This economic problem is part of the equation. There is just no incentive for people to look far enough ahead in the type of investment that is required. You are talking about a resource that has 50 to 60-plus year cycles.
MR. CHAIRMAN: The next questioner is Don Chard.
MR. DONALD CHARD: It is almost frightening to see what has been happening in our forests in this province in recent years. I certainly sympathize with the private woodlot owners and the pressures that they are under. If you have kids who are ready to go to university and you are trying to scrape together the money for that and somebody comes along and offers you top dollar for your wood, it is pretty hard to resist the temptation to let somebody go in there and clear it out. What I am hearing from people, and I have visited a couple of woods operations this fall, is that these pressures to allow people to cut are tremendous and in a lot of cases contractors are coming along and they are saying, we want to liquidate. It is the easiest way for us to clear the timber off your land. It is a nice euphemism for, in effect, taking everything out. Then, of course, it is going to be a long time before that land recovers.
I guess there are no easy answers. It is obvious, though, that we need a registry just to get a proper handle on the volume of wood that is coming off our lands. What you are telling me is what I am hearing and we have all been hearing, from a variety of sources, that there is a lot of over-cutting. We are way beyond what we should be establishing as an annual
allowable cut in this province. There is a lot of wood going out of the province, going to feed mills in New Brunswick because they are now looking outside that province in order to find the fibre to feed the mills. That is, I think, a process that has to be looked at very carefully in this province.
What is your understanding of where the silviculture budget went this year? My understanding was that that money was a fund that was tapped in order to carry out the tussock moth spray program. That spray program probably has virtually no benefit in your part of the province. We have had people from the industry come to us and say that a $6 million spray program is a waste of money. It is not going to do the job. If you believe in a spray program, you are going to have to spray a lot more. I am not sure what we accomplished in terms of controlling the tussock moth and obvious diversion of that money and I realize some additional money did come in for silviculture, but, still, it is a drop in the bucket compared to what is probably needed.
MR. ALEXANDER: I am not sure where the money went, okay? Like you say, my speculations are the same as yours, that some of it went to the spray program. The problem I see with the spray program is that it is just a band-aid type of activity. I always tell people, if you want to compare good management of a resource, compare Sweden to Nova Scotia. The land tenure in Sweden is almost exactly what it is in Nova Scotia; 50 per cent of the land, roughly, or a little less, is owned by individuals, just like us, in Sweden, 25 per cent is owned by big corporations and 25 per cent is owned by the Crown, almost exactly the same land tenure. Yet they produce an unbelievable amount of wood per hectare, per acre, compared to what we do. Even at these over-harvest levels that we are looking at here, the Swedes still produce more wood per acre than we do and it is sustainable. As a matter of fact, in Sweden the problem they have right now is that the forest is growing more wood than the industry can use.
In New Brunswick, where they have raped and pillaged the forests - and, you know, we are in the same process they were in 10 years ago - you know what they are doing? They are going outside of New Brunswick to find the wood. They wouldn't need to do that either if they were managing their forests as intensely as they should be or as intensely as the Swedes are. I tell people that is what we have to do. We have an example of what can be done. One hundred years ago Sweden was in the same boat except that their forests were gone. Our forests are not completely gone yet because like Greg says, there are a lot of landowners out there with wood on their woodlots and they are not letting anybody close to it because they don't want them to be raped and pillaged. They would rather it rot down, probably, 50 per cent of them. So there is a big chunk of land out there with a lot of wood that we can have access to if we do a good job.
I manage lands for 10 different woodlot owners and I am sure if I took you people out there and showed you the job that we do in those woodlots - and we run a sawmill operation, we run a business and we pay taxes, all the kinds of things that it takes to run a business and
we are trying to be successful - you would never say it was the kind of forestry that you are familiar with. It is good-looking forestry, it is good for the wildlife, it is good for the woodlot owner because it puts bucks in his pocket almost every year; it is good for the forest because the forest is still there standing, growing.
That is the thing, a forest will grow if you pay attention to it. But we are mining the forests, that is what we are doing. Over 80 per cent of the forest operations are mining and for some reason we just don't have the guts to do something about it. We have to legislate it just like they did in Sweden 100 years ago. They said, enough is enough because it is not going to change until we make laws that stop people from doing this.
I have had people say to me, we don't need any more legislation, we are regulated right to death in our lives. You try to build a tar paper shack on your property and see how quick the building inspector shows up. I mean in Nova Scotia last year, if you guys recall, we put an old gentleman in jail because he wouldn't put insulation in his house. They took him to court and they charged him and the old guy wouldn't pay the fine and he went to jail. We have regulations for all of those kinds of things so why can't we regulate the management of our most important natural resource? Why can't we do it? We don't have guts enough to do it and that is what we are asking you people to do; it has got to be done.
MR. CHARD: We do have a bill before this session of the Legislature, Bill No. 5, to amend the old Forests Act and it will establish a registry and a fund for sustainable forest practices. I am not saying that it is perfect but hopefully it is going to put us in the right direction.
The one thing that gives me a reason to believe there is some hope is looking at the fact that we have now got one of the major players in New Brunswick very interested in changing their forest management practices and I believe they are the first major company to get any of their land certified as being sustainable. What I have been told is that the land they got certified was probably one of their worst operations so if they could get that certified, it does suggest that there are increasing market pressures on people to observe good forest management practices. I think the challenge before us in Nova Scotia is to provide the support that people need to make it worth their while to put these practices in place.
MR. SHAY: Can I go back to your original comment on the silviculture and the tussock moth because that is a bit of an example of the greater problem in the province, and that is that there is no cohesive management plan for the province. There seems to be no direction or leadership as to where the industry should be going or where we want the industry to go. We have been asking for that and looking for help. The tussock moth itself, that was an initiative that was started and organized way too late in the process to be really effective.
The other aspect of that program, to the best of my knowledge, and I don't know how many people are aware of it, but most of the spraying and most of the money was done on large industrial and Crown lands. I don't know the science or the forestry reasons for that, maybe they are valid, but that is an issue that occurred and there were landowners who did not get their land sprayed who asked to have it sprayed.
The whole point is that the government is not leading by example. Their own Crown lands, they are not being managed at all and I think the government has to start leading by example and that is one area where we need to do some work, start finding out what we have. The registry will be good. We keep looking for inventory numbers from the province but we keep getting stalled and delayed. The registry will only be good, though, if it has enough teeth to pick up the people and the operations and the organizations who are out of the province who are causing the largest part of the problem.
The way I see the registry right now, it is going to be like the gun registration law.
MR. CHAIRMAN: That bad, eh?
MR. SHAY: It is going to collect the Joe Blow, it is going to collect you and me, who have a rifle in the back yard and we register it. It is going to gather up the law-abiding citizen and cause him to go through some bureaucracy and pay money but it is not going to collect the outlaws and the criminals and the guys who are going to circumvent it anyway. I think the registry is a good idea but that is my fear with the registry right now because we see right now in southwestern Nova, it is not working, 330 loads went just in one month out of Digby on that boat of logs. Every mill, not just mine, in that county, those two counties of Digby and Yarmouth, are all suffering right now for wood. In fact, I just laid off a shift last Friday because of no wood. Not because of no markets, but because of no wood.
We have to manage the resource more professionally and we have to guard it, it is our greatest resource. We all know, at least most of us know, it is the backbone of the industry in the province. All the natural resources are the backbone of the economy of this province, whether we like to admit it or not and forestry is right up there as one of the best, the largest. We are not treating the resource with any respect.
We need to have legislation. I have been around, I am relatively young compared to Harold, but I have been around for a few years and have been quite active in the industry, on a number of associations and initiatives and coalitions and other committees and bodies. I was naive but I am beginning to be convinced now that the only way to get anything substantive done, as unpalatable as it may seem, is through legislation when it comes to the proper, professional management of our woodlots because the landowner is just too unorganized to get together as a group and discuss it, number one; and number two, there is no economic impetus for anyone to want to do that.
MR. CHAIRMAN: Can I just ask a question? I was going to go to Francene, I won't take very long, but you did mention the Forests Act. Did your organization make a presentation to the Law Amendments Committee in written form or verbal?
MR. SHAY: I believe we did through the Forest Products Association and I know they will be preparing a presentation for the Law Amendments Committee when the parks and protected places legislation is tabled which I think will be soon because that is another dangerous Act that we should be watching but we are not.
MR. CHAIRMAN: Okay, we are going to go to Francene Cosman.
MR. ALEXANDER: Just one second. I would like to make one more point for this gentleman about this legislation. The key thing in here is not so much that we register everybody, and that is important, is that we follow through on the requirement that everyone who buys wood from the forests of Nova Scotia have to be responsible to show the Nova Scotia Government, for the people's sake, that that wood is sustainable. Where did the wood come from? Is it raped and pillaged wood or is it sustainable wood? If that is not in there, you may as well throw this legislation out the window. That is what Greg has said. He has come onside like a lot of other people and realized that the rape and pillage is not going to end unless we say, let's legislate an end to it. I think every Party in this government should be focused on doing that.
MR. CHAIRMAN: Just a second, I will come back to you Donnie, I will put you on a list. Francene.
HON. FRANCENE COSMAN: First of all, I appreciate the presentation. I am trying to find something reasonably positive out of this in terms of direction and I guess what I am hearing is a lot of negative at the present time. So I am trying to pick my way through the comments to get some sense of direction. I want to go back to the comment that, forgive me, I think Harold, you made around the contribution of the provincial government about four or five years ago was in the range of $6 million, I think you said. Was there an industry contribution over and above that at the time?
MR. SHAY: Industry contributes very heavily now through the tax system.
MRS. COSMAN: Now, but I asked then.
MR. SHAY: Now and then, through the tax system.
MRS. COSMAN: There was then?
MR. SHAY: Industry doesn't get recognized, and that is fine, but industry does make its contribution via management on its own woodlots which deserves, I think, some credit and some mention. Industry does own some freehold land, I think it is 20 per cent or 25 per cent and industry makes a contribution that way, through the management of that land. Industry makes contributions in other ways, in trying to be involved in the industry and in the efforts of trying to promote the industry. So I don't know if there was a direct financial contribution to a government-sponsored silviculture program per se.
MRS. COSMAN: I don't think there was. That is where I was trying to pull out a little information because I think if I recall correctly, when the provincial side of that program dropped in the contribution that was being made it, in a sense, was made up for by direct contribution to the program from the industry, if I recall correctly, which brought it up to just about the same level, maybe a bit more than what it had been five years ago. Harold, do you feel any clearer on that?
MR. ALEXANDER: If you take the numbers, okay, there is $3 million now and what they are asking for is a, basically across-the-board, one-third contribution from woodlot owners, one-third from government and one-third from industry. Then some of the agreements were not exactly that way, right? Like in the case of Stora's agreement, Stora puts in $3.00, the government puts in $2.00 and the landowner puts in $1.00 out of $6.00.
MRS. COSMAN: We are somewhere in the ballpark of $5.4 million, I think, are we not?
MR. ALEXANDER: So basically the woodlot owners have always put money in, okay, in terms of reduced stumpage rates and having to pay 10 per cent of the cost of silviculture and everything else. So if you take the $3 million that the government put in last year, I think you could expect that there would probably be another $3 million contribution from industry. So that bumps it back up to $6 million. The only problem with that is, it is not anywhere close to what the expenditures were 10 years ago and I think we have an overhead somewhere that may show that. I will just let Ed have a chance to look for it.
What Ed Bailey has said, and he is the guy who is supposedly most in the know as to what the requirements are, and I should have responded that to Gordie earlier, was he said that we need $17 million to $18 million a year just to sustain the level of activity that we have right now. So $6 million, plus the contribution from the woodlot owners, is not going to bring us anywhere close to that level. I think, from my perspective, this is one of the things that has kept me going the last couple of years because I have been volunteering in this capacity long even before the Western Valley Development Authority. Before that it was Community Futures and before that it was pounding away at how valuable our forest resources are and we need to wake up and do something. I have been doing it for 19 years and I am getting tired but in the last few years, what has kept me going is the fact that the industry has really come onside with dollars and staff time and they are committed to it.
I think it is time for the government to show the same kind of leadership, the government and the Department of Natural Resources. That department is mandated with the responsibility of helping the people of Nova Scotia manage our forests and I will tell you our view from where we sit in Digby and Annapolis, the whole department, not just an individual, it is just not doing a very good job.
MRS. COSMAN: Is that historic?
MR. ALEXANDER: It probably is.
MRS. COSMAN: I want to come back to the point you made about the tussock moth spraying not being enough. I think, in truth, the program tried to go into the heavily infested areas of the province. Should we just have sat back and not done anything because we couldn't do everywhere, or what is your view on that?
MR. ALEXANDER: My view is that the Band-Aid approach is probably better than doing nothing but it is just like Greg said earlier, it just points out how little we are doing, how poorly the approach to forest management is in this province. It is like, I can't talk very much about the tussock moth but let's take the example of the spruce bark beetle which we are very familiar with down in our neck of the woods. The spruce bark beetle is a problem that can be solved with no monies from government or anybody else for spray programs. You can clean up bark beetle by harvesting trees that are infected.
We are operating right now, and I was talking to my partner last night, in a stand that has spruce bark beetle in it. I reminded him to make sure that they cut all the trees that are loaded up with beetles, beetles that overwintering waiting for next spring to come along so they can go and attack other trees. It is called sanitation cutting, get rid of the problem before it gets any bigger. The spruce bark beetle is a problem that came about because we did not harvest enough trees. Down in Digby Neck, I have seen woodlots down there that are 90 per cent dead because they were . . .
MRS. COSMAN: If it is so simple to do without any intervention from government on the spruce bark beetle, why isn't it being done?
MR. ALEXANDER: It is simple to do as far as the operation goes, to go there and do it when it is timely, when the outbreak starts. It is just like tussock moth. Maybe the tussock moth could have been handled a lot easier if we had our eye on the problem before it became a monster, but that is what happens. Whose eyes are on the problem? In Nova Scotia, we are all looking at the problems but nobody is doing anything about them. That is where we are at.
Nobody is taking charge and that is why we have said, at the end of our presentation, as an advisory committee, as a local community group who have our eyes on the forests, we need some power to do something about the problems that we see in our forests. The powers are in Halifax. This $3 million budget, now who do you suppose decides where and when that money gets spent. Do you suppose anybody in Digby and Annapolis Counties has even 2 cents worth of say in where the money is spent? It is the guy who has a job, or guys or gals who have jobs in Halifax. They do not see the truckloads of wood going across on the ferry. They drive back and forth in and out of the city. So, there is where the big problem is.
MR. EDWARD CHISHOLM: Could I just answer the honourable member for just a second. You are looking for a positive spin or a good . . .
MRS. COSMAN: I am wondering where we are going with this whole discussion if all we do is push out the negatives.
MR. EDWARD CHISHOLM: Some of the positives I might point out, we see silviculture as a very good way out for everyone. We see it as a good way out for the increase in sustainable forestry, increase employment and has a very ecologically, friendly way of doing is. So, I think it is a position that would please 95 per cent of the people and it is doable for a moderate investment from everyone: landowner, industry and so on. So, I think that is a good point and that is a ray of sunshine within this whole thing.
We see another positive thing. We see Bill C-20, that the gentleman had mentioned earlier, as a positive thing to have that legislated as soon as possible. So, those at least, I would point out, are two positive things.
MRS. COSMAN: One final question, Mr. Shay. (Interruption) Well, the answers are long but the questions are short.
MR. CHAIRMAN: All I was going to say is, we will have one more positive question here. (Laughter)
MR. ALEXANDER: I get excited. I can say, I have been around this game a long time and I have not seen very much action and I am sorry that the answers are long.
MRS. COSMAN: I just want to pick up with Mr. Shay on the comment that the registration will not work. Well, what will it take to improve the concept of the registration to make it work?
MR. SHAY: I hope it does work, but right now I do not see it.
MRS. COSMAN: You said you did not think it would work.
MR. SHAY: I do not see it working too effectively right now. I think what we see is that the field staff - I guess you call them field staff, the guys in the depots around the province - have not been mandated to go out and check on the people who are moving wood, to see what their status is as to whether they are exporters or not and, if they are, to literally lay down the law with them and have them get registered, and if they are not registered, advise them of the potential fines.
A lot of it is innocent landowners who probably are not even aware of the registry and the process, and of the potential problems they could be bringing upon themselves by being owners of the wood as it leaves the province. That is where I see the registry. The other thing I certainly do not have an answer for is there has to be better cooperation with the Province of New Brunswick to make sure those mills, and those processors, are respecting our laws, abiding by our registries and registering properly. I think, by and large, most of them are, but, again, it is the unscrupulous operators in the industry who not only give us bad publicity, but give us the real problems.
MR. RAYMOND WHITE: In your remarks you mentioned big bucks for wood. If I am a private holder of land in your area and I am approached and I want to sell my logs to your sawmill, or to the people who are trucking outside of the province - let's not say your sawmill, but rather sawmills in the Digby-Annapolis area - how do prices compare if I want to sell my logs?
MR. SHAY: Well, our prices compare quite favourably at the roadside level for the landowner; that is, a landowner does not necessarily gain a lot per thousand on his wood when he sells it to New Brunswick. There are two main differences that we can determine so far. One is that they are scaling the wood, they are counting the wood, differently in New Brunswick. They are using a different method of counting the wood, tallying it up, so you may have a higher volume of wood on the load at the New Brunswick mill versus what you might receive at our mill. We are, by law here, required to use a New Brunswick log scale but, in New Brunswick, I believe that they are - well, I know that they are - using other methods to scale, which may or may not be wrong, but they certainly are different and cause an advantage that we have difficulty competing with.
The other big issue with New Brunswick is that they have a very high proportion of Crown land. A very high proportion of their wood supply comes from Crown sources which, typically, carry less than market stumpage rates. So a huge mill in New Brunswick can support a third shift or can support 5 per cent of his production at the extremely high rate that he is paying here, in New Brunswick, and average it into the cost of his wood he is getting in the rest of the province, and that is precisely what is happening now. Again, it is a very difficult thing for a small mill like me to deal with or compete with, and that is why the landowner is not really seeing, like I said, the dollar value may appear to be the same per thousand, but there are those two big differences there.
MR. WHITE: So if I understand what you are saying, if I take equal units of wood, using the way that New Brunswick calculates the volumes, then I am probably getting a higher return selling my wood to New Brunswick than Nova Scotia?
MR. SHAY: Yes, that is it in a nutshell.
MR. WHITE: So that is a pressure for people to sell. The second question. You mentioned that you manage 10 woodlots and you indicate that you are doing a sustainable silviculture practice, who pays for that?
MR. ALEXANDER: At times, some of the thinning and stuff we do, we get money from these industry/government programs. During the past year we have, I think, gotten less than $1,000 in assistance to do thinnings, as an example. Most of the cost right now, because there was no money for most of the past year for doing the kind of work that we do - we do a lot of shelter wood cutting, which is a natural regeneration management strategy - we absorbed the cost and the landowner absorbed some of the cost and reduced stumpage rates. Right now, it is a two-way partnership between the contractor and the landowner. We do it because - I don't know why we do it - I guess it is just because we are committed to the land and we know that the land will be there long after we are gone. Whether I own it or some landowner owns it, we would like to leave it in good shape.
The other point I would like to make is that the woodlots I manage for people, I manage it for them as an asset. I explain to them that their woodlot is worth this much money. This is how much it will grow every year, and this is how much we can harvest every year, or once every five years, whatever, on a schedule that will not reduce the value of your woodlot; as a matter of fact, it will probably increase its value over time.
It is like having cash in the bank and you harvest the interest every year. That is what we explain to woodlot owners, that is what we do but right now, there is not enough money to fund, I feel that we should get some incentive from government and maybe a little more from industry to do the kind of things we are doing. Industry is starting to come on side and, hopefully, the government will do the same thing.
MR. WHITE: So the last question following that sequence of thought. Do you see it, at a time, that it would be financially viable that these practices would become self-sustaining without government support?
MR. ALEXANDER: I think the way I view it is the government has to look at it from the perspective of what do we get out of it and what should we put back to guarantee that we keep getting what we are already getting.
I met a forest economist one time and he told us that at least 10 per cent of an industry's income goes directly to the federal and provincial governments in income taxes. Greg and I were talking about it on the way up and knowing the size of the cheques that I write every month to Revenue Canada, which some of it is for Nova Scotia and the size of the cheques that he writes scare me bad. We know that 10 per cent is not an extraordinary number. If you take the value of Nova Scotia's forest industry in 1997, approximately $1.3 billion in shipments, 10 per cent of that is $130 million in direct tax revenues right off the top. Now I know and you know that governments get way more taxes than just income taxes that are generated. What I am saying is $3 million in investment by the Nova Scotia Government and zero by the federal government in forestry in Nova Scotia, it is almost a joke, in my opinion.
Just one more little tiny point about the saw log issue, somebody explained it to me the other day why people are shipping their logs in New Brunswick or why a mill in New Brunswick can pay more. Greg answered that but what he didn't say was somebody explained to me that some of the mills in New Brunswick whose average price that they pay for New Brunswick logs is $350 a thousand, landed at the mill, which is basically the same price that the mills here pay. For wood coming from Nova Scotia which is top-up wood, it is like Greg says, to keep those mills running 100 per cent of the time, for the top-up wood they will pay $450 a thousand. The economics for them are you either shut the mill down because we don't have the wood, what is the cost for us to do that or what is the cost to pay extra to get this wood out of Nova Scotia? We all know what the cost is for us, we know, I know.
MR. CHAIRMAN: Just a couple of questions and then we will go around again one more time. I want to ask a quick question, one of which is, if you bring about this registry and we brought about the amendments that you have for No. 20, can the department do the work? I am looking at it now and I have talked to a lot of people involved in the industry who say, they can't do the workload of what they have on the books now and they don't have the staff to do it. If you bring anything major, whether or not you will be able to enforce it, is a question that is out there. Is that something that you have a concern about?
MR. SHAY: It is a question that the industry has been concerned about for the past few years as we have tried to work and we do have a fairly good relationship with Natural Resources. I think they respect the industry fairly well and we seem to work well in committees and seem to cooperate in information transfer and things like that. But when it comes to the crunch, there just seems to be no push to get over the gate. On that issue, that is right, it is a big concern of ours in the industry. We don't see the bodies able to enforce the work that needs to be done.
Now, on top of that, especially with all of these new industry-initiated silviculture programs coming on line, which is good and will fill a hole, I hope, in the silviculture effort, depending on the programs which vary from operation to operation, the government, particularly the Natural Resources Department, has a lot of responsibility and work cut out
for it to help administer or manage or oversee or police those programs. That is another area where, practically speaking, we don't see how it is going to be physically able to be done. Right now they don't have time to get out in the field to see what is going on. Right now we have to keep updating them and they don't know about the native issue and how it affects us in our end of the province because they don't have the people on the ground to be able to gather that information.
MR. CHAIRMAN: The next point I want to make is not so much a question as it is a statement and I appreciate where my colleague, Francene, is coming from in a sense that $3 million and we should be happy with it and it is money and it still (Interruption) But you mentioned the fact that the topping up of the (Interruption) You are making the mention that because it is cost-shared then maybe we are still doing $6 million in the woods and that the same level is taking place. It begs the question as to whether or not we are being realistic when we have an industry that is worth $1.3 billion and the amount of subsidization that is going into it and you can call it subsidization or you could look at it as incentives by government to perpetuate that industry and we are looking at it as a $3 million investment.
There are other programs such as tussock moths and all these other things, but in regard to silviculture, and if you listen to the witnesses that have come here, the forestry is much like the fishery, if you are doing something right and it takes a bit of an incentive to ensure that it grows or that it can be maintained, then I think it is a very small investment. If we don't do it, the consequences are coming out in the sense that we are not maintaining our forests and they are actually going to start shrinking and then from there the job losses in communities such as mine, although I don't have a heavily forested area but when you get back into the Kemp area, there are people who deal with it and so forth, it is going to affect people's livelihoods and once that happens, then we will be back at this table or in the House saying we should have done more in silviculture.
I think if we can look at the problem objectively now and say, this is where we want to go, let's forget who made the mistakes, because you can't change that, but we can go forward and make some recommendations and suggestions that perhaps Nova Scotia will be better served, then I think as a committee we will have done something correctly. So, I will pass it on.
Gordon, the next question.
MR. BALSER: You mentioned in passing the issue of aboriginal people harvesting. Is it a problem in southwestern Nova Scotia; if it is a problem, can you offer suggestions of ways that it could be addressed?
MR. SHAY: It is a problem that is growing. It is not as critical now as it is in New Brunswick or even in eastern parts of the province. It is becoming a more prominent problem. There is Crown wood now coming off Crown lands, obviously unauthorized harvest, that is
going to New Brunswick. I think it is a serious problem. The biggest problem I have is that the government seems to be unwilling or unable to move and resolve it one way or the other. I think that is all most people ask for, to have it resolved so that there is a common set of rules for all of us. We can't continue to operate our businesses, and you will hear this from other people in other industries, you have to have a common set of groundwork and rules for all of us to operate under. So one way or the other it has got to be settled. If it is unauthorized then you should deal with it or fit them into the industry somehow. If the aboriginal people deserve some portion of that land to make a living off of, that's fine, but we have to sort it out so we can go on and know where we stand.
Further to that, if they are allocated some lands, if they can make a living off the lands and set up and establish businesses and employ people, which is what we want, they should also make a contribution to the cost of running the society and the government, like the rest of us are. Thank you.
MR. CHAIRMAN: Mr. Chard, you had a question.
MR. CHARD: Yes, I could take up a lot of time but I will try to control it. Just a comment on the tussock moth and when this became an issue in the spring, one of the questions that I couldn't get an answer to related to the science involving the implications of a spray program. I consulted a number of people in the scientific community and said, well, if you spray, what happens to the virus that normally kicks in and controls the tussock moth? People said, we don't know, we don't know whether it will kick in or whether spraying is just going to reduce the infestation to a sustainable level the way spraying in New Brunswick for spruce budworm did for many years. It is another complication in dealing with forest issues.
I guess a question I wanted to raise relates to sustainability and the kind of jobs that we can reasonably expect to see out of the forestry sector. I visited one woodlot operation earlier this fall which has been cut sustainably for 150 years and the owner said he still doesn't know if it is really sustainable. He said, he figures 150 years is really not an adequate test. I thought that was a pretty extreme point of view and if he can cut selectively for as a long as he has and his predecessors, it sure looks sustainable. But he made a very interesting comment that the real measure of value should be the jobs, assuming you have sustainability there as a basic consideration, then the next consideration should be the number of jobs per unit of production. Yet, what we are seeing with the increased emphasis on pulp and paper production and fibre farming is a constant decline in the number of jobs we are getting per unit of production.
What I am hearing is that, in 10 to 15 years time, the pulp and paper sector in this country is going to be in a lot of trouble because the international industry is going to be moving into the Soviet Union in a big way and we're going to see a big change in industry in this country. It leads me to think we need to be putting a lot more emphasis on things like properly sustainable operations and on saw logs and smaller mills, so that we have a solid
basis here that can withstand the international changes that are coming. I wonder if you could comment on how that fits into the picture of what is happening in your part of the province?
MR. ALEXANDER: You won't believe this, but I am at a loss for words. I guess, for me, I don't pay a whole lot of attention to what somebody tells me might happen 10 years down the road. In my own case, last year I figured the world economy was just booming like everybody else and you all know what has happened since then, but I do know one thing, we're not making any more land. With the amount of deforestation on the planet, you have got to know and you have got to think, if you're like me, that anybody who manages their trees, they're going to have a market for them, whether it is pulp and paper products, which is basically a by-product of sawmilling operations.
It is only just starting to happen in Nova Scotia, that the pulp and paper mills want chips from sawmills now rather than round wood. That transition was made in the other parts of the country a long time ago, so we are starting to grow up. So the pulp and paper sector is a very good sector to the economy in Nova Scotia as part of an integrated forest sector, and I think the strategy of growing logs is a good one. The other sectors will have the by-product.
One part of the sector that we've ignored for a long time is hardwood. If the Swedes were managing Nova Scotia's forests, you would want to see the quality of hardwood that we would be growing, you know, from white birch, yellow birch, rock maple, white ash, all those species. That's the thing about Sweden, they have three species of trees: spruce, pine and white birch. We have the Acadian forests and white pine on top of that. It is just incredible the value of the forests that we could have if we would wake up and start managing it, like the woodlot that you saw, you know, 150 years later, if all the woodlots were managed like that. We can do it. We have the knowledge to do it. It is just that we cannot all come together and make it happen.
We think - and this is a point we don't want you to forget - that people out there in the communities like us have to be part of the process. We have been left out. We feel left out. We go to meetings every month. We talk about our problems and we can't do anything about it. We haven't been empowered and we need to be empowered through this legislation to help do what needs to be done.
MR. CHARD: Thank you, Mr. Chairman.
MR. PETER DELEFES: If I could just mention a little, sort of an aside, before I ask my question. I was out to Sable Island last week. It is part of this riding that I represent, Halifax Citadel and, interestingly, on the huge expanse of sand out there, some 42 kilometres long and 1.5 kilometres wide, there is one tree and . . .
MR. ALEXANDER: Is it alive?
MR. DELEFES: . . . hardly deserving of the word tree. It is more of a bush than anything else, but it is very precious to them. They always take great pride in showing all visitors that one tree and go to great ends to preserve it, safeguard it. You mentioned that your group supports the sustainable forest practices code for Crown lands and you mentioned that 80 per cent of the harvesting on small lots is presently unsustainable. Would you support legislation that imposes certain strictures on small woodlot owners to prevent that rape and pillage that you say is taking place, and what specific measures would you suggest be part of that code?
MR. ALEXANDER: We are 100 per cent in agreement that the small woodlot sector needs to be legislated to do the right thing. We have a lot of land protected in Nova Scotia right now - or proposed protected - there are 30-some protected areas, so the small woodlot sector, we feel that if we are going to stop the rape and pillage, then legislation is probably the way we have to go, and maybe we need some grace periods.
Down in our area, we have a lot of the infrastructure in place. We had three group venture companies in the two counties, North Mountain Woodland, Sissiboo Forest Management and La Forêt Acadienne, woodlot owner organizations that were set up by governments to help woodlot owners manage their land, the sort of carrot approach, right, but the government pulled the plug on that five or six years ago. Those companies are struggling along but those companies are still there. They are still there ready to be reactivated and get back to the job of helping woodlot owners manage their land.
There is so much more pressure on the resource now than there was even three years ago, a lot of outside interests and expanding local industry, right. All the big mills in Nova Scotia are expanding. They need more wood so they're reaching out further. So, yes, we believe that woodlot owners need to be legislated and we believe that the majority of them will go along with it and want it. We think it is politically correct to do it and not be worried about the few people who are going to bitch and complain and go on. We think the majority of woodlot owners want legislation to ensure that the rape and pillage stops. We do. We know the general public is onside. That's for sure.
MR. CHAIRMAN: George.
MR. GEORGE ARCHIBALD: I am kind of interested now, the fellows that are cutting wood and hauling it away, they are selling it to people in New Brunswick and elsewhere and I am just wondering how much political clout they have to continue the way they are going and bring in no regulations so they can keep on doing what they're doing?
MR. ALEXANDER: Do you want my opinion?
MR. ARCHIBALD: Yes.
MR. ALEXANDER: I don't think they have any political clout. A lot of them are from New Brunswick. The guys that are hauling the wood away, we passed two trucks on the way out this morning, 7:00 a.m., just on a 10 kilometre stretch of highway, heading to New Brunswick. One of them at least, I didn't see the other one, one of them had New Brunswick plates. Right on the side of his truck it says so and so's trucking, Fredericton, New Brunswick and he doesn't have any political power in Nova Scotia, does he?
MR. ARCHIBALD: No. We get beyond there and then we're getting into this native logging business, too, where they're wandering through Crown lands and protected areas, anywhere at all. I fully expect them to be in Point Pleasant Park some day. What's the solution to that problem?
MR. ALEXANDER: It is like Greg said a few minutes ago, rather than let the thing drag on and let it get out of hand like the tussock moth maybe did, we need to deal with the issue of native logging rights, come up with a set of rules that everybody . . .
MR. ARCHIBALD: Do the natives have any logging rights?
MR. ALEXANDER: Let's find out.
MR. ARCHIBALD: I suspect that your views are shared by most woodlot owners and managers around the region and right across the province. The Irvings are making significant inroads into Nova Scotia with their mills and their cutting and so on. Are they practising the same sort of management style here as they practice in New Brunswick or do you know?
MR. ALEXANDER: It is not a fair question from the perspective I don't know what they're doing in New Brunswick but I can tell you that I have seen what they're doing in Nova Scotia, at least in Digby County anyway, and it is very impressive for a large company. That used to always be what people used to say to me. You have the big companies and they can't afford to do that, you know, we can't legislate because the big companies can't afford to do that and you go in the woods on small woodlots that they own and look at the job they're doing and you say this can't be a big company because this looks really good, right. This is good sustainable forest management. It is long term. They are in it for the long haul. I don't like to speak for them but . . .
MR. CHAIRMAN: You say the ones they own, and I don't want to interrupt the question, but what about, do they cut on other people's land, too?
MR. ALEXANDER: If you want to sell them your wood, they will probably come and buy your wood and cut it for you, if that's what you want done. They will probably manage it for you if that's what you want done. They are in the same business we are. We are a little tiny guy, operating a small mill and managing woodlots for people. J.D. Irving will offer the same type of services on a lot bigger scale. We do not operate 24 hours a day.
MR. EDWARD CHISHOLM: The gentleman's question about the political effect of the exporters, my understanding is we are looking from our perspective from the exporting on the ferry from Digby. It is basically only six major exporters that are handling all that wood. Again, it is not a large lobby.
MR. ARCHIBALD: So really, to solve the problem would not take a whole lot. It would just take some regulations and some enforcement. Everybody is probably hoping that something will be done so they can have sustainable practices but until that comes, they are just keeping up with their next door neighbour. If he is going to clean out, they have to do the same to stay in business.
MR. ALEXANDER: We feel that with the requirement of this wood acquisition plan, if you are in a mill in New Brunswick and you are buying wood out of Nova Scotia, you will have to set up an office or have somebody in Nova Scotia working for you to ensure that you abide by the rules. You will not be able to just run in your truck. We think that will help solve the problem. They won't be fly-by-nights any more. It will help solve the problem, I hope.
MR. BALSER: You talked about changing inheritance rules so that woodland would be passed on with the same kind of procedures that were in place for agricultural land. Are there other changes to tax regimes, either preferential tax rates for woodland or suggestions that you can make there that would encourage woodlot owners to adopt sustainable management plans?
MR. ALEXANDER: Apart from the capital gains and that issue, the structural changes that are required there, an area I had always looked at with interest, there are two areas, I guess. One at the provincial level was for the province to make a contribution in a way through some type of investment tax credit system, similar to credits you can get now for buying new equipment, that a landowner could have for making an investment on his woodlot. It is a concept that I was interested in and would like to see some study done on.
The other level, going down a level lower to the municipal level, one area that seems to roll around occasionally and one area where I think there may be some room for manoeuvring is in the taxation of woodlands and woodlots and forest properties. We are also under increasing pressure from a growing number of non-resident and foreign ownerships of our resources who are making no contribution at all to the economy of the province. I think that there is room to raise the tax rates on lands that are not used as a forest resource. So, if you are using your land as a woodlot or a forestry resource or whatever the definition may turn out to be, then you receive the rates we are receiving now, for example. If you do not use it for that purpose, if it is a recreational or other non-forest purpose, there should maybe be a less favourable rate.
MR. ARCHIBALD: They do that in Ontario. If you own a bunch of land and you are managing it properly, you have one tax rate, but if you just let your forest go to pieces, you have another tax rate, and the difference is significant enough so people will hire someone to come in and manage their forest for them. It is saving them money to do it.
MR. EDWARD CHISHOLM: It is called a managed forest tax incentive program and you are very right. In order to qualify for that reduced rate in property tax, you have to first have a management plan, but there is also a follow-up procedure, which is what we lack here in Nova Scotia. Every five years you have an audit done that you are following that management plan. That management can be for wood production, it can be for wildlife, but you are actively doing something. I think it is really well thought out.
MR. ARCHIBALD: It works.
MR. EDWARD CHISHOLM: I have tried to follow up with a few people doing management plans, but this is revised in 1988 and I think the feeling is very optimistic. I think you are right and it is working. I have not got that specific information yet.
MR. CHAIRMAN: I want to ask a couple of questions, one of which is picking up on what was just mentioned. I find that in my area we have a lot of seniors who own substantial amounts of private woodlots. The problem that comes in for them is if they want to sell logs or they want to harvest, they will produce income. They are reluctant to do so because, of course, it will affect the supplement that they receive from the federal government so they feel they are receiving on one hand and then giving it back on the other.
It also has an effect on what programs they receive from the provincial government. Community Services gives a rebate for property taxes but the one year you make money, you don't receive a supplement; then in the future you can't get that program again. So there is a reluctance of a lot of seniors to use their land to the best benefit, even of themselves, because they are looking at it in the short term versus the long term which is regrettable.
I was listening with interest to the fact that maybe the municipal taxation issue may be a way of trying to address that. Do you find from your own personal experience that you are running across that? A lot of land is basically laying idle because people don't want to access it?
MR. ALEXANDER: No question. I have neighbours who won't let us cut a tree - it is not let us, we have enough trees to keep us busy to cut - who won't have any wood cut on their land by anybody for that same reason. They are scared about losing their supplement. The feeling in the industry is that maybe - and there are people working on this in Ottawa hopefully right now - stumpage should be tax exempt or at least you should get substantial tax credits for stumpage payment.
If you think about it, the average value of 1,000 board feet of logs manufactured is probably, when you figure chip value and trucking, you are probably looking at $500 to $600 per 1,000 board feet. If it takes $90 or $100 per 1,000 to buy that on the stump, that is a very little price to pay for all of that other $500 or $600 worth of activity. It is just going to rot and fall down, which is what is happening right now, particularly if it is a situation where a person is not very well off.
These older people, a lot of them are like the rest of us, going from month to month keeping the bills paid, and the idea of them losing their supplement is a very scary thought for them. That money comes in every month regularly. I know a lady who was in her 80's, she was a member of Sissiboo Forest Management. Sissiboo went and harvested some wood and paid her the stumpage and she lost her supplement; 10 years later she still hadn't allowed them back on the land, 10 years went by. The sad part of it is there had been $15,000 spent on road construction, all kinds of money spent on thinning and everything else and now you can't even drive in that road anymore because it has grown up so much.
A lot happens in 10 years and it is really sad that a stupid little thing like that could deny a whole community the benefits of having that 150 acre woodlot managed because it is a beautiful woodlot and it will grow 150 cords of wood every year, year after year, and put that money back into the community, create jobs. So there are all kinds of problems and reasons why people don't manage their lands but we have got to start at base one and start the process of getting them onside and working with government programs to make the changes that we need to change.
MR. CHAIRMAN: Have you studied the current system in Sweden to any great extent or just more the facts of how productive it has been?
MR. ALEXANDER: It is unfortunate but we had hoped that the Nova Scotia Woodlot Owner of the Year would have been with us this morning. His name is George Chisholm; he would be Ed's brother. He won that distinction last year and he spent some time in Sweden. He told us at our meeting the other night that they have legislated good forestry in Sweden for a long, long time, probably in the order of 100 years. He said that one of the parts of the legislation is similar, I think, to what is going on in New Brunswick right now where if you own a woodlot, you are not allowed to harvest more than a certain portion of it in any one year. You can't do as is happening right now down in Digby County where I know the contractors have started at this line and they have gone right to the back. The only trees left standing are the spindly little ones that weren't worth cutting. So you are not allowed to do that in Sweden. You have to keep a certain amount of your forest growing stock.
[11:30 a.m.]
MR. CHAIRMAN: I have been there, actually. I had the opportunity to visit, and that was about 1984. It was unbelievable, every forest you went by, you could see through them for long periods of time because they were aligned, the space and so forth, but the thing that they may mention is that they are trying to mix the forest. If you cut a certain species, you don't choose, yourself, which species you replant. You have to have a forestry management plan as to whether, if you cut hardwood, you probably have to plant hardwood again. It is very regulated. Although I think that is the optimum situation, you have to look at it. It is a change in philosophy that, for Nova Scotians, may be difficult to accept, but it is probably in their best interests.
It is difficult a lot of times to bring about these changes in the short term, because I believe that for yourselves as management people looking at a forest, a lot of people look at it as this is my piece of property and I shall do with it as I please, whether it is letting it rot or harvesting it. I think that, overall, we have to find some common ground where we can maximize the benefit from the forest and bring some responsibility to it. I guess in a sense, if you can talk people into it, rather than putting a gun to their head, it will probably be much more effective.
It is easy to say, but I am sure even with the Forests Act that is probably going to be referred back to the Legislature, perhaps even this evening, there are a lot of people who have concerns about it, if you put in the provisions that you are referring to, that you would like to see in it, they will be controversial also. There is nothing that is done that is difficult that does not have controversy. I can appreciate where you are coming from.
MR. SHAY: That is a double-edged sword that the industry is up against right now. We are under, obviously, a lot of pressure to be responsible and to harvest sustainably, to make our contribution to these programs. On the other hand, we have the majority of the woodlots owned by small, private, individual landowners with the exact philosophy that you just mentioned: it is my woodlot and I will do what I want with it. On one hand we are under great pressure to be sustainable and, on the other hand, we have the woodlot owner who is going to do what he wants.
We even have the case quite often where if we do not take their wood, then we have them on our backs for not taking their wood. It is a very difficult situation for us as a sawmill industry, and for the small, independent sawmills to be in, and the community to try to do the right thing, but also get enough wood to survive, but not too much wood so you are not seen to be taking it all.
I think that is where you need a road map, you need some rules that everyone can go by, some common sense, scientifically based foundation to control the activities that are - not in any specific woodlot maybe - looking at it globally and potentially, all the land bases, to
have some sound scientific basis to make their decisions on and have some direction for people to follow.
MR. CHAIRMAN: Really from your whole presentation today, I think the big thing is that you are looking for some forest measures whereby the forest is managed in a sustainable method, and also some income programs to offer some incentives to do so. Even when we were talking about some incentives for people to process on their lands, I think along the lines of municipal incentives, or even different taxation if you manage your land whether or not you leave it fallow. Is that perhaps a wrap-up of where you are coming from, those three major points? You could talk about this thing for hours and hours, but are those the three major senses you are coming from?
MR. ALEXANDER: We want to be part of the process. We want some of the power to filter down from Halifax and end up in Digby and Annapolis Counties.
MR. CHAIRMAN: Decentralization.
MR. ALEXANDER: Yes, we want to be part of the process. If the province is going to spend $3 million a year on silviculture, as an example, why should some - excuse the expression - bureaucrat who lives in Halifax decide what share of it we get and how we spend it?
MR. SHAY: The forest industry has been taken for granted for a long time. I have to say - whether it is out of place or not - that just very recently a very large business operator in the province established a secondary wood products manufacturing facility in Cornwallis. It was an $18 million-plus facility and it was going to use a resource that there is an abundance of in the province and was going to re-manufacture it into higher-value products. We were very disappointed that the Premier of the province was not even there at the grand opening, the official opening. No disrespect to the department staff who were there, but neither the Premier nor his deputy were there. This is a sad commentary, but that is a microcosm of what has happened in this industry, at least as long as I have been involved. There is no interest in the industry at all.
MR. ALEXANDER: It doesn't have the glow of offshore gas or natural gas. (Interruption) You are darn right it has more jobs.
One final point, you were talking about woodlot owners and I am a person who has worked with a lot of woodlot owners for almost 20 years. From a political perspective, I know a lot of politicians are worried about legislating woodlot owners on what they can or cannot do on their land but I would suggest to you that if you took a random sample of 100 woodlot owners and you brought them down to Digby County and I got an opportunity to show them the 10 properties that I manage for people and then we took them down and showed them George Chisholm's award-winning woodlots, Nova Scotia Woodlot Owner of
the Year and showed them the practices that we carry out on woodlots, that a big majority of those people would say this is what I want on my land. If you can do this on my land you can manage it right to the hilt, produce all of the forest products you want to produce because we are concerned about wildlife, we are concerned about the environment and we are also concerned about the economy. So it is a saleable thing. It is sad that we need legislation but that is the way we have to go.
MR. ARCHIBALD: Why don't we take the offer as a committee and go and look at that. We won't be there soon but certainly, maybe mid-December.
MR. CHAIRMAN: I was going to actually suggest that, George, because I tell you for a lot of us it would perhaps open our eyes as to what the difference is between both of them.
MR. ARCHIBALD: We need our eyes opened too.
MR. CHAIRMAN: And it would be nice for a change to have something close to where I live and we could bring the metro members and go out into the rural ridings and perhaps have a look at it. If we can arrange a time and it will depend on whether or not the committee members can be present, if you would be willing to receive us, we would very much appreciate that.
MR. ALEXANDER: We will make the time. I guarantee we will make the time.
MR. ARCHIBALD: Good. Will you look after that, Mr. Chairman?
MR. CHAIRMAN: I certainly will. You know that will be lobster season, I could almost bring - no, I won't bring lobsters, I changed my mind. Are there any other comments for our guests here today? If not I would like to thank you very much. I think you brought another perspective from our previous witnesses and I am not saying that you are in disagreement, it is perhaps maybe just coming at if from another angle. We appreciate very much you coming here and taking time off your busy schedules and bringing forward your points. We will try to pick up on that visit, I think it would be good, even for myself because I represent predominantly a fishing area but there are parts of my constituency which are in forestry and I have an interest. I know that all members here also have an interest. Thank you very much for coming and I wish you a safe trip home.
The meeting is adjourned.
[The committee adjourned at 11:39 a.m.]
