HANSARD

NOVA SCOTIA HOUSE OF ASSEMBLY

COMMITTEE

ON

RESOURCES

Thursday, January 20, 2011

COMMITTEE ROOM 1

Nova Scotia Woodlot Owners & Operators Association

Printed and Published by Nova Scotia Hansard Reporting Services

RESOURCES COMMITTEE

Mr. Sidney Prest (Chairman)

Mr. Howard Epstein

Mr. Jim Boudreau

Mr. Gary Burrill

Mr. Jim Morton

Mr. Leo Glavine

Mr. Andrew Younger

Mr. Alfie MacLeod

Mr. Chuck Porter

[Mr. Mat Whynott replaced Mr. Jim Morton]

[Mr. Allan MacMaster replaced Mr. Alfie MacLeod]

In Attendance:

Ms. Jana Hodgson

Legislative Committee Clerk

Mr. Kevin Pentz

Department of Natural Resources

WITNESSES

Nova Scotia Woodlot Owners & Operators Association

Mr. Austin Parsons, President

Mr. Lorne Burrows, Past President

Mr. Matt Miller, Board Member

[Page 1]

HALIFAX, THURSDAY, JANUARY 20, 2011

STANDING COMMITTEE ON RESOURCES

9:00 A.M.

CHAIRMAN

Mr. Sidney Prest

MR. CHAIRMAN: Good morning. We will get started with the introduction of the committee members.

[The committee members introduced themselves.]

MR. CHAIRMAN: On the agenda this morning is the Nova Scotia Woodlot Owners and Operators Association. We'd like to welcome them here this morning. We're certainly looking forward to your input and the information you have to provide to us. Could the witnesses introduce themselves.

MR. AUSTIN PARSONS: Good morning and thank you for the opportunity to have a conversation this morning. My name is Austin Parsons and I'm the president of the Nova Scotia Woodlot Owners and Operators Association. To my immediate left is Lorne Burrows, past president of the association and the end of the string is Matt Miller, who is a board member of the association. Given today's schedule - which I understand is a two-hour dialogue which begins with a 10-minute introductory presentation, given the constraints of time - we thought it was best if Matt now give a 10-minute presentation, so Matt will give the presentation and hopefully we'll have a question and answer period following that.

MR. MATT MILLER: Thank you very much, Austin. I would like to begin by thanking you guys for taking the time to see us today. I have a brief presentation, a little bit about our organization, who we represent, what we've been up to and some of our thoughts on the strategy moving forward from this point.

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[Page 2]

The mission statement of the Nova Scotia Woodlot Owners and Operators Association - we are an independent organization of woodlot owners and operators achieving prosperity, stewardship and solidarity through the practice of ecologically, socially and economically sustainable forestry. We are the oldest woodlot owner organization in the province, formed in the late 1960s and we really feel that what sets us apart is our commitment to truly sustainable forest management. To us, that means that all values of our woodlands - ecological, social, cultural and economic - must be preserved for future generations.

We take a stewardship approach to owning our lands and we believe that's reflected in the management activities and specifically, the harvesting approaches we take to managing our woodlots. We support woodlot owners and operators in sustainable forestry through education, demonstration and advocacy. We have historically supported a land-based model and we do that because through that approach, we feel that we are able to maximize the value to us, who are the principal owners of land. Really the way we manage and the reason we manage for that is because at the end of the day, over the course of the time that we are stewards of the land, it helps us to achieve the most value from that and true value - the ecological, social, cultural and economic.

Some of the initiatives and activities we've been up to include, we recently signed a 25-year operating agreement with the Department of Natural Resources and Northern Pulp for the Otter Ponds demonstration forest; this is the first ever community-run demonstration forest on Crown land. We're working with Picea Forestry Consulting and Woodlot Services and the Association for Sustainable Forestry to deliver two uneven-age management outreach projects to promote a Category 7 quality improvement silviculture program and ecologically-based forest management. These were held in 2008 and the current project wrapped up just at the end of 2010. They were very well attended by small woodlot owners; there were also contractor sessions. There is huge interest among the small woodlot owner stakeholder group in Category 7 management and we'll touch a little bit more on that in a few slides here.

The association hosts annual woodlot field days to promote various aspects of sustainable woodlot management. We maintain an annual e-newsletter Web site and host an annual general meeting. We presented written and oral submissions during the stakeholder input portion of Phase I. Really part of our mandate, on top of promoting and educating woodlot owners, is to act as an advocacy group. Small woodlot owners are tremendously important to the forest management environment in Nova Scotia. We own 50 per cent of the land base, contribute proportionately more to the wood supply. If you take just a rough estimate of the approximately 5 million acres that is private in this province, you attach a value of approximately $1,000 an acre, we represent $5 billion in rural investment in forestry in the province.

I'm going to speak to the strategic directions announced on December 1^st by the province. Our association and our members are fully supportive of the strategic policy

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directions announced on December 1^st. We recognize that the path the DNR has presented in this announcement - we recognize the ability for it to improve the ecological, social and economic benefits to the process and we are committed to this process and have been for quite some time. Specifically, we feel it's really important for this to maintain a 50 per cent reduction in clear-cutting in five years and a commitment to no whole-tree harvesting.

This shift aligns with our mission statement and guiding principles. We believe in this approach, we've been following it for many years. Again, it is because it provides a greater balance of ecological and social forest values in the status quo. This land-based management model will lead to more economic value to small woodlot owners in rural communities. This will help provide increasing value to small woodlot owners over time. This approach benefits small woodlot owners and that's why we're here to speak for it.

We feel that many Nova Scotians recognize this already and they recognize the benefits of this approach and we believe that they support this vision as well. Proof of that is the interest that was seen in the Category 7 uneven-age management seminar series that we hosted two outreach events on. This project, the latest version of this project, the 2010 outreach project, generated a list of landowners who are interested in Category 7. They flooded the Association for Sustainable Forestry with requests for funding to support uneven-age management.

There is literally a lineup of woodlot owners waiting at the door to do this type of work. We believe that's because they recognize this quality-driven approach of uneven-age management benefits small landowners because it helps maximize the full range of forest values. By producing quality wood, we're able to do more with less volume and this management model also allows us to maintain the ecological and social and recreational values that woodlot owners also attach to their lands. Again, it just speaks to that stewardship approach, managing the lands to be able to hand it on to future generations. Ultimately it allows a shift from volume to value-based industries. When you are a small woodlot owner, you have a small, limited land holding. You can't just keep looking over the next hill for the next stand, to go and liquidate. Again, this maximizes a full range of forest values on a relatively small landscape. We believe there are many tangible benefits to successfully implementing this strategy and staying the course.

The potential to increase the available wood supply, I believe this is a rough estimate but we've heard for some years this term, about 20 per cent of woodlot owners are not actively participating in forest management in Nova Scotia. I believe there is potential to tap into wood supply because simply, many woodlot owners will not accept clear-cutting. The ability of the industry to deliver some sort of this different management model is going to increase uptake from small woodlot owners because they simply just will not stand for anything else. As a forestry consultant, which is what I do for a living, I often deal with woodlot owners who, even when sometimes it is the best thing to do, in terms of silviculture

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decisions, they won't accept it. Again, it is because they want a more balanced approach that promotes quality over quantity.

It will restore more climate-adaptive forest dominated by temperate species suited to uneven-age management. Certain species have the characteristics to allow us to do uneven-age management and they're ultimately going to be in a better position to deal with the effects of a warming climate. It is also going to provide increasing opportunity for the value-added sector and I think it is really important to note that this employs more rural Nova Scotians per unit volume of wood. I'd really like to see that be a goal of this strategy moving forward. It is not going to be easy. This is nothing short of a paradigm shift the department has announced and there are many challenges and I think it is important to not get lost in those early on. We'll talk about some of them and some potential ways around them.

Uneven-age management and forest improvement work must remain economically viable. At the end of the day, the wood has to pay for itself. Woodlot owners, contractors, the industry needs to be able to put wood at the side of the road in a cost-effective manner or else we're relying on subsidies. In today's economic climate that's just not going to work.

There are a number of issues from the small private producers' point of view that are making that difficult. The current Crown stumpage system puts small woodlot owners and producers at a disadvantage. Crown stumpage rates are too low and are undercutting the return that small woodlot owners can expect, especially for their lower-value wood which is often produced especially in the early stages of this type of work. Just as a rough estimate, Lorne - who is a small, private producer - estimates that he loses approximately $500 a load in lost stumpage because he is not able to get a fair price for his wood, based on the current Crown stumpage system.

Another way to help the economics of uneven-age management is through silviculture funding. The vast majority of silviculture funding in the province goes towards plantation, industrial, uneven-age forestry. We believe that the delivery of this program must better reflect the new strategic direction announced by the department. Recently I got an e-mail just the other day that the first entry Category 7 and the commercial thinning silviculture rates have been increased for the 2011 silviculture season. This is a great first step. The first entry, the first time you go into a stand to do uneven-age management is often when you target low-value wood, so those operations are inherently a little bit more expensive. Commercial thinning is the same idea - you're looking to remove low grade wood and leave trees on the stump that are going to increase in value.

It's important to note that the focus on quality of this approach will increase the economic potential of stands over time and will gradually reduce the credit rates needed to support further entries.

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As I said, that first entry is often more expensive, but over time as we build a more valuable forest condition we're able to move away from having to fund this type of harvesting because the stands are ultimately going to be more valuable and the regeneration is free when you do this. So we're able to move away from that more expensive clear-cut, plant-and-spray model to an ecosystem-based continuous cover model. Again, it supports that shift from a product-based to a land-based model, pushing value over volume.

We will need to develop approaches to restore value to highly-graded stands. I've cruised woodlots as a consultant that have been clear cut and it's simply that the species mixture just isn't there to support uneven-age management. I keep hearing the idea, we should just be clear-cutting these stands, but that's that whole - I love the Einstein quote where the same line of thinking that you got into a problem shouldn't be relied on to get you out of that problem. I think we need to explore some innovative, new approaches to restore value to these stands.

Uneven-age management is about what gets left behind in the harvest. The idea is that you're building value into a forest stand. To protect landowners and to guard against high grading, we're going to need improved biological legacy guidelines. The current system of wildlife clumps and 10 trees per hectare isn't going to be adequate to support the type of forest development that will lead to uneven-age management.

[9:15 a.m.]

Education by demonstration for landowners will help guard against high grading. Right now, the capacity for many woodlot owners to be able to carry out this type of work on their land is going down and so they have to rely on bringing in a third party to do the work. In this type of work, high grading is an issue - taking all the best stems and not leaving them on the stump, to increase in value. Education by demonstration, providing support for landowners will help guard against that.

We will need to work over the long term to reshape the industry to support this new harvesting paradigm. Right now so much of our harvesting infrastructure is based on very efficiently and economically viably putting wood on the side of the road; it's a volume-based industry. It will be important to develop contractor capacity and infrastructure for low-impact improvement harvesting and continue to develop new and improved forest management tools.

So much of our industry and the research and development that has gone into forestry in Nova Scotia has supported the industrial paradigm. The department has done some great work on forest ecosystem classification, ecological land classification, uneven-age management guides for softwood, hardwood, mixed wood - this is all great work. They can continue to work with landowners with groups like us to improve these and spread the word about their use.

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When we're talking about the challenges that we face, it is very important to keep in mind the long-term nature of this process. I think tangible results over the 10-year life span of the Environmental Goals and Sustainable Prosperity Act are viable. By 2020 we will see the results on the ground in the forests of Nova Scotia - I really think that.

On December 6^th, the department reached out to stakeholders for support in promoting and delivering the new strategic direction of Phase III. We were called to a meeting here in the city to meet with the deputy minister for help in promoting and supporting this approach. We've indicated our support and willingness to help. Again, as an ecosystem-based, ecologically-based organization, we're very happy with this direction. We are willing to commit to seeing this process through and we are willing to help. We are partnering with the Nova Scotia Federation of Agriculture on this and we are developing a proposal to help support the promotion and delivering of the new strategy.

We are here today to say that our members, our association, we believe small woodlot owners in this province will benefit from this and our message is to maintain the course, follow through on the direction of Phase I, as indicated through the public output, the direction of the steering panel in phase three and ultimately with the strategic direction the department has laid out for phase three. Thank you.

MR. CHAIRMAN: Thank you, Mr. Miller. For the first round of questioning, I'd like to keep it to 10 minutes. Mr. Glavine.

MR. LEO GLAVINE: Thank you, Matt, Lorne and Austin, for coming in today. This is a very, very important issue to Nova Scotians. As perhaps some of you know, I've been Natural Resources Critic for the Liberal Party for some time. A number of things, of course, that have come out as lead points in the strategy or areas that we've been talking about for some time, a reduction of clear-cutting, an annual allowable harvest. We promoted it, of course, for some Crown lands and we promoted it there because every time we asked whoever the government of the day was, or the department, they would say we already have an annual allowable cut on Crown lands, but they would never, ever provide the data and information to clearly indicate that was the reality. I guess pronouncing something and demonstrating clearly that it's being done are two different things.

That being said, when the six points came out, I found there was a lot of reaction around - not so much where they were going but, once again, lack of detail. Just like after Phase II, there was an opportunity to react, but really no further consultation and especially with the number of small woodlot owners we have in the province. I'm just wondering if you felt that perhaps after the directions there should have been more detail. I know we've heard from Andrew Fedora, Mike Hutchinson and their association that a number of people decided, we're just going to go ahead and get our stands looked after because we really don't know where government is going. I wonder, Matt, if you've had something similar at least

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around some dissonance with these, while they're very good points, we're not taking any run at these, but rather, again, in the wake of what it leaves in the unknown.

MR. MILLER: To respond to your point, I don't think people in December decided to go and look after their stands, I think that has been going on since the summer and obviously, since the unrolling of Phase II, there has been a lot of uncertainly about where this process is going to go. Unfortunately, when you say look after their stands, you mean clear-cutting, liquidating their woodlot.

MR. GLAVINE: Liquidating, yes.

MR. MILLER: Yes, there's certainly a lack of detail specifically around the definition of a clear-cut. Personally, I think the biggest question on everybody's mind is, what's going to happen to silviculture funding? Obviously, if we spend 97 per cent of our silviculture budgets on average to support clear-cutting-based treatments, there are going to be some big questions about where that program is going to go, where the funding is going to come from, how much funding is going to be available in the climate that the government is facing in terms of ability to support these initiatives. Certainly, we'd like the benefit of some more definition.

There are two other points I'd like to talk about, Leo, that you just mentioned. As far as an annual allowable cut goes, when I spoke about developing new management models, new management tools, a lot of the growth in yield tools that the department and the industry use are based on the industrial model. We will need to develop new ways to project growth in yield in our stands and model our forests differently under this harvesting paradigm, as opposed to the agricultural- or industrial-based model that deals with genetically-improved stock and density control. Another issue in terms of demonstrating on Crown lands, I think there's an opportunity to develop contractor capacity and reward contractors who are willing and able to practice this kind of management with access to Crown lands.

One of the things about being a small, low-impact harvesting contractor is you deal in very small lots usually, you're moving from a small, private woodlot to the next and the ability to set up shop on a piece of Crown land, to do that kind of work would be a good benefit to small contractors and would ultimately be that leading by example that I think the department should be doing here.

MR. GLAVINE: I think you hit on one of the real key points, wherever the final details of the strategy will take us, and that is around silviculture. This is the area that I know, in reading Atlantic Forestry and talking to some of the people, like Steve Bezanson in my riding, they feel that this is absolutely critical. We know they will be doing away with herbicide sprays, so pre-commercial thinning, replanting, all the aspects of silviculture will be critical. Do you have any kind of idea in terms of what your organization feels should be invested in our forestry through strong silviculture practices?

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MR. MILLER: Well, I think the announcement on December 1^st to move to 50 per cent reduction in clear-cutting means that that 50 per cent of harvesting is going to be supported by some other form. Certainly Category 7, in the way silviculture is currently funded, is the only means - Category 6 and Category 7, commercial thinning and uneven-age management, are the only two avenues to support that kind of work right now. Obviously by the Fall, I think it would be obvious to say that more support for those two treatments would help move us away from clear-cutting.

It's also really important to recognize that uneven-age management requires certain stand conditions, and species composition and structural characteristics are the two important ones. Many of the stands that we're dealing with don't have that capability right now, so we may very well need to come up with some approaches that restore levels of temperate species that are suited to uneven-age management.

MR. PARSONS: One other point. In addition to that, you also need a different set of operator skill sets. Yes, you need the silviculture treatments but you also need people who can implement those on the ground, hence requiring a different set of tools and training, et cetera.

MR. GLAVINE: How am I doing, Mr. Chairman?

MR. CHAIRMAN: Well, you're doing pretty good, you've got three minutes left.

MR. LORNE BURROWS: Can I make a comment on that?

MR. CHAIRMAN: Yes.

MR. BURROWS: Well, as an operator, when you go into an uneven-age stand to do uneven-age management, you are taking out the poor quality wood and this wood value is very low. The reference to the $500 a load can be supported, I feel. The association bargained for a number of years for the price of low-value wood with Scott Paper. The last contract was in 1993. If I use the values based on a negotiated price for low-value wood, the price received today, I can easily come up with, on poplar and low-value chip wood, at least $15 a ton, we are behind a competitive price and that $500 a load is really necessary going back to the owner-operator to make this type of management feasible.

I see the impact of Crown stumpage, the access to cheap wood, is costing the small-woodlot owner on these low-value products - and I call it a hidden tax, it's a hidden tax that we're paying on every load of low-value wood that we put out, of up to $500. You just cannot afford to do this type of forestry without having that income come back in because it's low volume, low productivity and if you're going to improve your stands, you have to have income from somewhere and if it's not coming out of that low-value wood, it means you're working below the cost of production. I think that one thing you people who have the

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ability to generate wealth or provide policies that generate wealth in rural Nova Scotia, have to understand that you can't generate wealth when you're forced by industrial models or by government policy to work below the cost of production.

As rural investors who have $5 million in investment in the rural economy, since industrial forestry came in in the late 1950s with the pulp mills, we have been forced by the industrial forest model and Crown land stumpage policy, to work below the cost of production. You're taking that wealth out of the woodlot owners-investors in the province. That has to be recognized and it has to be dealt with.

MR. GLAVINE: My time is up but I'll come back to - that's a wonderful point you made to finish off and I'll come back to that if I get time.

MR. CHAIRMAN: Mr. Younger.

MR. ANDREW YOUNGER: Thank you, Mr. Chairman. I wanted to ask about something that was in your presentation that you touched on, which was the uneven management and the different species in temperate forests. I'm just wondering, have you done much research in terms of what species are most appropriate for planting and moving ahead, both in consideration of the uneven-age management process and also in terms of climate change?

MR. MILLER: Nova Scotia is in a unique position geographically because we're located on sort of a transition zone between northern and southern forests, so we have elements of both. Conventional, large-opening, clear-cut harvesting supports boreal species because they're adapted to thrive in these environments - hot, dry climate, post-harvest regeneration climate. So the species like yellow birch, red spruce, white pine, red oak, sugar maple, these sort of temperate, Acadian forest species, are being replaced through clear-cutting by a more boreal forest composition and structure.

Now, in terms of my own, I haven't done any of my own research, no, I can't say that. Charles Bourque from the University of New Brunswick, where I studied and graduated from in 2009, he has done some modelling around those. I think it's just sort of the generally held feeling on that research that the species in our forests that come from more southern - that have southern affinities - are expected to do better in a warming environment, especially oaks and pines because they thrive in hot, dry conditions.

[9:30 a.m.]

MR. YOUNGER: So are you seeing with the small-woodlot owners, in particular, that they're changing the types of species that they're planting - when they actually do planting - to address that, or are they still staying with the species that they've always traditionally used?

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MR. PARSONS: I think, if I understood your question - and Matt can correct me on this - depending on the harvest regime, different species are more or less likely to regenerate naturally. Under an uneven-age management regime, it's the hardwoods that will come back because of the shade conditions on the forest floor. So under those cutting regimes, those hardwoods will grow again, more so than the other softwood species that we referenced a second ago. Projecting the impact of those cuts 40 or 50 or 60 or 70 or 80 years down the road, you'll have more hardwood in that stand than you would if you started off with a clear-cut regime.

MR. YOUNGER: That raises an interesting question for me because the member for Kings West and I have been to a number of places in the province, particularly up in the Guysborough area, talking with some woodlot owners. One of the things they were having frustration with was they wanted to get in and get that hardwood because they had a higher value if they could get it out, but sometimes somebody would go in and clear-cut and basically massacre the hardwood trees while they were going after the softwood, which reduced the value.

It strikes me that the industry we have set up after it's harvested in Nova Scotia is more set up for pulpwood and the use of the softwood tree, so what has to happen for us to maximize the economic potential of the hardwoods in Nova Scotia?

MR. MILLER: Well, I think we need to grow more quality hardwood. It's not just hardwood, it's quality in general. I think the important point to make is that when you're dealing with high-value products, you're able to do more in terms of your harvesting.

I use this example - I'll caution you when I use it and I'll tell you why. Windhorse Farm is a place down on the South Shore that has been managed using these approaches for over 150 years. They've produced an exceptionally high, economically valuable forest condition there and they're able to go in and cut a tree on a Monday, sell it to a guitar manufacturer for $3,000, and then there's their week. So when you go towards a value-based, you just provide yourself more opportunities to do this kind of work because you don't have to pile the wood up on the landing like you do in a volume-based industry. What has to happen is we just need to shift our approach to the way we do silviculture.

MR. PARSONS: My experience is not so much hardwood, but pine. Pine is not an interesting species in the industrial model because of various reasons, but we have a mill shop in St. Margaret's Bay and our business is to make Heritage wood windows and doors. Based on consumer demand - and that has nothing to do per se with the forest, but with people's interest in heritage properties and making wood windows - our demand is growing. As a consequence to that I have more demand for pine, so I can pay more for stumpage to the woodlot owner who grows the pine. Given what we make as a product, the more quality or high-value pine that I can buy, the more value I can give to that woodlot owner and the happier I am because at the end of the day, my customers have a better product.

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MR. YOUNGER: I think, actually, Mr. Chairman, the consumer demand is directly related to the forest issue and the example I was going to give and this is what I'm wondering was whether - and we can have a whole other debate at some point about whether decades of government policy should support pulpwood or not and that's a whole other debate. I guess what I'm wondering is as we move on an uneven-age management and you see more hardwood naturally regenerating, so you have more capacity and more availability of hardwood species, do we have the industry here or do we have to work on building that industry to utilize those?

The reason I ask is, I'll use a personal example - I do a lot of woodworking and so I'll go into East Coast Hardwoods over in Burnside and they have some fabulous stuff. But even for species you would expect to grow here and I know grow here, it's very hard to buy local stuff because - and I talked to the owner, he's a local owner - he says he just can't get it because it's hard to find people who are harvesting enough of it regularly enough, so instead he's shipping it in from Brazil or . . .

MR. MILLER: Ultimately that's because we're not practising a style of forest management that grows quality wood. It's generally held that uneven-age approaches produce quality because they mimic natural processes, it's totally different than a volume-based approach meant to maximize the amount of wood grown off a hectare of land.

I think to answer your question, do we have the capacity or do we need to develop more value-added capacity, I think yes, to both. We certainly do have the capacity; the industries are starving for wood. If you look at Groupe Savoie, they just closed down in Westville because they weren't able to access that. I think if you ask the Eastern Hardwood Management Association, they'd likely tell you they've been saying this message for years that we need to change the way that we do harvesting so that we can grow higher-quality materials that ultimately employ more rural Nova Scotians for the same volume of wood than a volume-based industry.

MR. YOUNGER: You mentioned Groupe Savoie - we're going to talk about a letter from Mr. MacKinnon, the member for Pictou East, later on on that very issue. I'll just ask you, I think we're going to discuss it later, whether we're going to call them in, but they have suggested they're seeing so many logs chipped for various purposes that it affects their ability to get the wood. I would have thought that they would be paying more for an unchipped log in decent condition than somebody who is paying some woodlot owner for a chipped product. Why is that happening? If I owned a woodlot I would be getting more value out of selling it to these guys in its whole form to make whatever - guitars, it doesn't matter.

MR. BURROWS: I think the main reason for that is there is no real infrastructure to take a few sticks from a cut and get them to market. There's such a small volume of this wood and there is very often a disappointment when the wood is sold, it is not the value that the woodlot owner thinks is in that wood, there's a disincentive for operators to pick out

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those one or two sticks that really have the high value and they just don't get to market for that reason.

When you're talking about the value of hardwood versus saw lumber, pulp and so on, as an owner and operator who tries to make a living in the rural economy, my hardwood is far more valued than any of the softwood species that I grow because I can value-add that and sell it as firewood. Even on the roadside, market-value unprocessed hardwood is the same value as stud wood now and pretty near logging material. The free-market system that exists for firewood has driven the price of that product up many percentage points where it has been flat or going down for the other products.

MR. YOUNGER: Obviously it's difficult for a government or any of us to change consumer demand; there are certain things that are difficult for us to change. We can't change what species are going to naturally regenerate in the forest, so what do you see as the things government could do to try to change that so that those higher-value products are coming out and as I see it, there's more economic spinoff in the rural economy from those forest stands?

MR. PARSONS: Support the uneven-age management model.

MR. YOUNGER: That's all?

MR. PARSONS: That's the basics, it's either a push-pull. It starts with consumer product, but it begins with whether or not you have the resource in place. I think if the resource is in place and you have consumer product, then the industries will in-fill it by themselves because of the market.

MR. MILLER: Part of the problem we're talking about with low supply is because our approaches to this point haven't been designed to grow high-quality wood. As Lorne said, it's often a stick here, a stick there, but if you're in a situation where the vast majority of the growing stock that you are operating with was high quality, then it would fundamentally change the approaches you would take to harvesting it.

MR. PARSONS: From a business point of view we have a vertically-integrated model, so we buy logs, we mill our own wood and we then put it into various end streams. If you as a consumer came to me and asked for some local hardwood for your wood shop, I could sell it to you. I think the market will take care of itself.

MR. CHAIRMAN: Mr. Boudreau.

MR. JIM BOUDREAU: Thank you, gentlemen, for coming in today. It's very nice to hear your message and it's also nice to see that the efforts of yourselves and even some of the people around this table have helped us reach this stage. As you mentioned, we've had

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an industrial policy probably for the last 60-plus years, so this is a huge shift. Like you, I firmly believe that uneven-age management is and has been the way to go in Nova Scotia for a long period of time, however, we all know that there has been significant resistance to that.

When I listen to Mr. Burrows talking about the loss of income right now that you have per load of wood, I've heard the same things coming from people down in Guysborough County who have been trying to do the same thing, they've been sort of caught into this situation and there's no way out. There is a great deal of enthusiasm on the ground, I think, from some of the woodlot owners in the area with regard to the new strategy. I think it's extremely important that we stay the course on that.

One of the things I'm concerned about and Mr. Younger just talked about it with regard to - I'm going to use his phrase here - the massacre of the hardwood. I'm very concerned about the massacre of the hardwood stands that exist on Crown land right now too. I've seen that massacre already take place in the last number of years and a number of us, including myself, have been very vocal in trying to stop that.

I know what's being referred to in Guysborough County because it's something that's very important to me and very important to the local area. We have a lot of old-growth forest there that I think, if we're looking for designation of protected areas, then that's a great place to start in some of those areas as well.

I'm interested in talking about the valued-added sector because this is really key to improving the rural economy in many places in Nova Scotia.

Obviously we don't need to talk so much about the benefits - we all know what they are - but I'd like for you to maybe identify some of the major challenges. I think you have talked about a few of them. For example, you talked about Crown stumpage rates, I'm interested to find out how that is set at the present time, for the information of the committee. How do you see or what do you see as being a necessary change in that area, so maybe we'll start with that.

MR. BURROWS: Now you put me in the hot seat. I think one of the main reasons the association was formed 40-some years ago was this issue over the competition between the private investor and the Crown forests. That has always been a major sore spot with the private woodlot owner-investor, that they had to compete with the government-grown wood.

Years ago, as a dairy farmer, as a milk producer, I sat in on meetings when the Agricultural College was building a new barn and the milk producers at that time made it very, very clear to the government that they were not going to compete with a government-supplied product in the marketplace. That was a hot issue until that was solved. The milk produced at the Agricultural College went into a lower-valued product and did not compete against what was produced by the independent farmer.

[Page 14]

[9:45 a.m.]

We're up against exactly the same thing here, in forestry. I think that the price is set in a negotiation process between industry and the Department of Natural Resources and I don't think they take in a realistic pricing schedule for that wood. When you speak of hardwood and why hardwood stands are being clear-cut, industry sees hardwood as a waste product because that land could be growing something that would feed a pulp mill or a sawmill and they want to do stand conversions on those hardwood stands. The faster they can make them go away, the happier they are because that is the industrial forest model.

As far as setting Crown stumpage prices, I think they should reflect the realistic price, based on what it costs to do this type of uneven-age management. It has to reflect what the open market - and I see the only product that you can use as a base for an un-negotiated price for right now is hardwood, because of the competition supplied by the firewood market. That means that the hardwood has a competitive price.

If you do the calculation based on when we were negotiating back in 1993, the last contract and so on, you come up with, say, a $15 difference in price. There has to be some shift away from the current method of setting Crown stumpage, to set a realistic price or to have the private woodlot owners have primary supply until that price comes up, until it is realistic. Or, if the government wants to support this and not be involved in World War III, there has to be some sort of a conversion time with some sort of a subsidy provided, to make up this price difference for a certain amount of time, until industry gets in a position that they can pay more for this low-quality wood.

The stands that we see and the high grading that we see and the devaluation of stands that has gone on for the last 40 years, very much reflects the fact that this low-quality wood is going out at below the cost of production and for absolutely no return on growing that wood for stumpage at all. The operation we're in now, likely half of the wood is going out. It's low-grade wood and it's going out below the cost of production, with no stumpage value.

MR. BOUDREAU: So in your experience, for the last - I'm going to use your words here - for the last 40 years there has been no involvement from the private woodlot owners in any price-setting or Crown stumpage negotiations. If I heard you correctly, it has just been basically industry and the Department of Natural Resources doing this.

MR. BURROWS: To my knowledge, the woodlot owners are not at the table when any of these decisions are made. The only ability we've had to price that was through negotiations between the very early 1980s and 1993, when we could sit down and bargain a price for the low-value wood with Scott Paper. There were certainly flaws in that structure that I won't go into now, but the Primary Forest Products Marketing Act which governs this, it has flaws and woodlot owners have pretty much given up ever trying to get those flaws out of the system, just because an industry has been able to supply or - every time we touch this,

[Page 15]

it just becomes a hornet's nest. It just turns into a major PR fiasco every time you try and touch anything that changes the status quo.

MR. MILLER: I think it's important to recognize, too, that NSWOOA was really born out of a need to collectively bargain and are sort of typically in the central region and dealt with Scott Maritimes, which is now Northern Pulp.

MR. BOUDREAU: I got that from your presentation and from the history in my area, why you felt this came about and what you have been trying to do. My understanding from the presentation is that 50 per cent of the land base is controlled by the private woodlot owners in the province, right?

MR. MILLER: Small private, yes. I think 70 per cent is in private hands but I think you can classify some of that as being large industrial holdings and approximately 50 per cent is . . .

MR. BOUDREAU: Yes, I'm just talking about the small-woodlot owners. So what I'm hearing then is a group that controls 50 per cent or has some say over 50 per cent of the land base in the province, up to this point has not been engaged in any of the major decisions. Okay, that's fair, that's good, that answers my question there.

Silviculture, with regard to silviculture . . .

MR. CHAIRMAN: You're pretty well out of time, Jim.

MR. BOUDREAU: Okay, I can come back to that. I just basically wanted to find out what improvements we can make there but I can come back to that.

MR. CHAIRMAN: Okay, Mr. Burrill.

MR. GARY BURRILL: I just wanted to go back to the point you were making, Matt, about the need for there to be a paradigm shift in how the whole forest economy is structured. I'd like to get the benefit of your group's analysis of where this present moment in the forest economy is, in terms of that shift. Is it kind of a medium-decent moment, a terrible moment, a good moment?

I ask it from this point of view. It seems, by my observation, that there has been no period in the last couple of decades like the last year, for small- to medium-sized industrial model contractors to be bailing out and selling their gear, that there is a large number of forwarders and harvest equipment going to auction. There's a lot of displaced people, for many reasons.

[Page 16]

I wonder, from your point of view, does this kind of set up the present moment as an opportunity for this paradigm shift or does it make extra problems for the paradigm shift? See what I mean?

MR. MILLER: I was always interested when I was at school that my professors and instructors were telling me this was a great time to be getting into forestry, when it seemed like there was a mill closure every other week.

There's a great paper that came out of the Canadian Institute of Forest Policy and Communications not all that long ago, I believe it was in 2008. It talked about the current status of the forest industries in Atlantic Canada and some future opportunities. I think we really stand on a bit of a cusp in some restructuring and some change in the industry, whether Nova Scotia was involved in a harvesting paradigm shift or not. The factors that have traditionally and historically given Nova Scotia a competitive advantage in global marketplaces for pulp, paper and commodity lumber - some of those competitive advantages have eroded over the course of the last 25 to 30 years.

The harvesting and the management model that has been established in Nova Scotia was ultimately done so to support those industries. It's generally held that those industries will contribute less to provincial economies in Atlantic Canada in the future. I think this is a great time for us to be talking about shifting the focus of management to a land-based, ecosystem-based, value-based model versus the volume-based model. In terms of it now being a hard time for the little guy who does this kind of work, I think it has always been that way. I think that small private producers, who have followed this management model over the course of the last 30 to 40 years, have always operated at a disadvantage over those who are clear-cutting.

One of our board members put it very well when he said, when he clear-cuts the land he's then able to do all these other things, he's able to get money for site preparation for planting, for herbicide, for pre-commercial thinning to manage that uneven-age stand because our system has supported that.

MR. PARSONS: Another interesting observation, I think - it's not really my area of expertise, but our existing industrial model is based on export. When global export markets are hurting, our local forest industry hurts. The shift to an uneven-age, value-added model, you're going to be getting more local demand.

My understanding of the Nova Scotia economy and this present economic state is our economy isn't that bad, at least I'm not seeing that. People are still spending money to buy products I'm selling. When you're also looking at this shift from the industrial model to the land-based model, you're also looking at a shift in where your market is, from an external market to an internal market.

[Page 17]

MR. BURRILL: That's an awfully important point.

MR. BURROWS: On the issue of the infrastructure that is wearing out and not being replaced, or being sold, or being scrapped, or is going out of productivity, we have to realize that most of this infrastructure is disappearing in relation to equipment. It's not the equipment that is needed to do this selection-type management. There is very little new iron being bought for the last several years and what is out there working is getting pretty long in the tooth. It does create an opportunity, if the future is going to be with selection-type management, it takes different equipment than what is being used now - a very large percent of the infrastructure that's there.

As we tool up to do this type of work, if the support is there and we know that the long-term policy is to do this work, then as we bring in contractors and train them to do this, they will be investing in equipment that will work on these sites and in these conditions. That creates an opportunity, if we want to see it as an opportunity. If we want to see it as a negative we just look out and say that there's not the equipment around to do this work. There are very few operators who are trained and know how to run equipment and harvest wood and not cut everything in front of them.

As somebody who does both, it is far more interesting to be doing selection-type management. You're making all kinds of decisions on the ground every time you cut a tree, every time you go around, as you do your trails, everything is much more interesting, it's just that unless you're doing it on your own ground and not paying stumpage, you cannot afford to do it at the present time.

MR. CHAIRMAN: Mr. MacMaster.

MR. ALLAN MACMASTER: With the recent government changes in the forestry sector, have you a vision for how harvests could be registered and monitored with the province?

MR. MILLER: That's an excellent question. I guess the permit idea has been thrown out the window. I guess there are a number of different models, certainly a number of certification bodies exist within the province, groups that run group certification efforts through the Forest Stewardship Council and the Canadian Standards Association, forest management standards.

I do some work with the Landowners and Forest Fibre Producers program. Any landowner within that program is accountable for the harvesting that they do on their woodlot. One hundred per cent of all harvesting and road-building activities are visited by the foresters who look after that program, so they have their finger on the button as far as that goes. If you sell a load of wood to any of the major mills now, your PID is tracked as part of

[Page 18]

that wood to move that wood, so there is sort of a system based on property identification numbers in place that could facilitate that.

I believe a big part of the answer to that question has to do with the resources of the department. I think there's also opportunity for - I don't know if landowners would enjoy it - but for some sort of outside-the-box ideas. I've heard - I don't know this but I've been told - that the department uses satellite imagery to monitor some harvesting practices in the province. So that's certainly one way to spot a huge clear-cut - from space - I think that would be one way to monitor it.

MR. BURROWS: For approximately the last 25 years I have worked, as one of my business ventures, as a land improvement contractor for agriculture, doing land clearing, land forming, ditching, whatever, there's not much reinvestment in that being done at the present time. I was involved back when the program was evolving. We were regulated to death when we first started, we had somebody looking over our shoulders all the time. As the program matured - and it did fairly soon - we were pretty much left alone and we should register, but we're not even registered anymore as land. If you're doing work and there's any government subsidy involved, you know the standards, you work by those standards. The work is inspected when it's done and if it passes, then a subsidy is available to you and if it doesn't pass, then you were working below your cost.

[10:00 a.m.]

I don't think that any program that has any assistance attached to it needs to be all that terribly complicated because when there are standards and people know what the standards are, they either work towards them or they don't and it's pretty much self-policing.

MR. PARSONS: The other point would be education by demonstration. You're asking a question, how can we stop people from doing something, but that's a short-term issue. As people become better educated in cultural value shift, then that becomes less of an issue. The example I can give you is drinking and driving, it's going to take the same effort, the same time span, the same lag. I'm saying that obviously we still police that on the ground but I would argue that in this room the majority of people's opinions about drinking and driving have changed, if they're old enough or long enough in the tooth to remember the difference.

MR. MACMASTER: Thank you. You mentioned something about subsidies. I'll ask this question, do you feel there might be ways to use incentives to help reduce some of the regulation that might be expected to exist when you have certified management plans? If there are any incentives that you think might help, what would they be?

MR. PARSONS: Incentives, by definition, are either reduce the taxes or give someone some money. So those are the two pulls you could look at and what's more

[Page 19]

effective for people would really be a political issue. I don't think it's any more complicated than that, that would be my take on it.

MR. BURROWS: This is a bit devious, but my assessment of the regime we're living in is we're paying a hidden tax on every ton or every cord of wood we sell and I would say if we're doing standard forest management work, we have that tax refunded to us. If we're not doing that type of work then you forego that access to income, it's very, very simple. To me it's not rocket science, it's just plain and simple.

MR. MILLER: There was another mechanism, as well, that was mentioned in the Bancroft-Crossland report during Phase II and that was around the forest resource tax rate, that's a very favourable municipal tax rate for lands classified as woodlots. It was done as an incentive to get private woodlot owners to participate in the provincial forest economy. It basically treats all types of forest management as equal. In this day and age - I don't want to be too contentious here - there are wider ranging and ultimately greater benefits to Nova Scotians when landowners follow a land-based management model and to this point they have often done so as a sacrifice, financially, in terms of the return that they can get.

I can say, again, that my experience as a consultant, in working only with landowners who want to follow this model, there are many out there who are willing to forego on the economic end of things in order to practise a stewardship approach. I believe that forest resource tax rate is potentially one lever that could be used.

I spoke to a municipal councillor from the South Shore in the summer who wasn't happy with the way that was broached. It's a municipal tax rate, it's a municipal issue, but it could be a possibility.

MR. MACMASTER: We talked a bit about silviculture. I know the government - I think people used to get paid according to density of stands. I'm just going to read from some notes I had from speaking with somebody. For pre-commercial stemming, there was an old program where everyone got the same rate. In the 1990s a new program started where the private sector decides what that rate is or how much is paid, I believe. Maybe there's some free-market impact there.

In dollars, I think the new program that started in the 1990s dropped from about $1,400 per hectare down to $1,000. Do you have thoughts on silviculture and is the province doing what it should be doing, or are there areas where we could improve, to support silviculture? It does employ a lot of people in the province.

MR. MILLER: It's a big can of worms, Mr. Chairman, we might need more than 10 minutes for that. (Laughter)

[Page 20]

We have seven categories of silviculture in the province. The first five support clear-cutting, so the establishment and tending of a plantation and competition control. Ninety-seven per cent of the money we spend on silviculture goes towards that type of forestry, only 3 per cent is available for uneven-age management.

First of all, if we want to move away from clear-cutting, we need to accept that we need to fund silviculture differently. I think that the ability to meet the 50 per cent in a five-year goal is going to be directly related to the amount of funding available for Category 7, especially first entry of these harvests are more expensive to implement because they target low-value material and they leave wood on the stump. This approach, over time, will develop more value and move away from that funding. The clear-cut model costs money to establish a plantation every time. I think, as a broad stroke, that's one of the major themes.

The Forest Sustainability Regulations and the Registry of Buyers program that was established in the late 1990s is viewed as a model outside of the province because it ties silviculture contribution to funding to harvest levels. I think that's very good but there are some issues around the administration of that funding and I guess, specifically, the control of mills in how those dollars are spent and in the bargaining with contractors as well.

We have a credit system where credits aren't dollars but at the end of the day, credits really are dollars. So if a credit rate for a treatment is, say, for example, $1,000 or 1,000 credits, often there is a bargaining, sort of a free-market system in place where, if contractor A will do that for $900 a hectare but the company is still able to claim 1,000 credits, then it goes kind of to the lowest bidder there. That puts the contractors, I think, at a disadvantage.

MR. BURROWS: Are you interested in my comment?

MR. MACMASTER: Sure.

MR. BURROWS: Just to further expand on what Matt was saying, this whole mill-based silviculture credit system, I think, needs to really be looked at. There seems to be an unfairness of access to this funding, based on who you are. I think at the present time the majority of that money is being injected into this program not through the mills, as it was originally intended to be one-third government, one-third mill, one-third woodlot owner. I think the majority of that money is coming from the government and I think that this money should be re-tracked, and see where it is being spent and how it's being spent and just where it's going. This whole program needs to be looked at and I don't think the woodlot owners have the input into how this program is funded or is administered to the extent that is to everybody's advantage.

MR. CHAIRMAN: You'll have to come back, Allan, in the second round of questions.

[Page 21]

MR. MILLER: I'm going to quickly add two more points. Our association supports the independent allocations of silviculture funds through the Association for Sustainable Forestry. This is sort of an arm's-reach organization that receives a taxpayer contribution to the silviculture program and allocates that. They're not tied to acquiring wood for a mill. They are an independent body that administers funds and we're very happy with that. The only thing, our complaint is they don't get enough money to support Category 7. As I mentioned, there's literally a lineup of people at the door of the ASF who want to do this kind of work.

The other point I want to hammer home is that we have silviculture problems right now that we're not able to solve with the seven categories of silviculture that we have. These are around restoring the types of species that are suitable for uneven-age management in stands that are dominated by boreal species that aren't suited for uneven-age management. Often these stands have been clear-cut and left to develop on their own. If the new approach is for uneven-age management, we will need to develop ways to restore the species and structural characteristics that are amenable to uneven-age management in those stands. There are a lot of them out there because we've done a lot of clear-cutting in the last 30, 40 years in the province.

MR. CHAIRMAN: Mr. Epstein.

MR. HOWARD EPSTEIN: Thank you, Mr. Chairman, and thank you very much for the presentation. I'm happy to be corrected but it seems to me that if we focus on this issue of clear-cutting that for the most part, what has driven the use of this harvesting method has been the strong emphasis on pulp and paper as a market for the wood product. When you talk about the kind of woodlot management and harvesting that you've been discussing with us today, a lot of it seems to be oriented towards using wood for other purposes, mostly lumber and perhaps - you mentioned, Mr. Parsons, or someone did, wood instruments or musical instruments and so on. It seems to me that it's mostly lumber on the other side and that really the model, the possibility of moving towards the model of a 50 per cent reduction in using clear-cutting is going to depend on the economics of whether there's a market for the lumber; that is, non-pulp and paper products.

What I'm wondering first is, whether this is a general analysis that you agree with and second, whether you see the market there for the lumber products if we do begin to move in a different direction.

MR. MILLER: I think you're right in terms of - like, uneven-age management produces higher value products, that's the whole goal of this quality improvement approach. In terms of a market, the only advice or the only information I can offer is that there's a small mill in my area, a hardwood mill, and his biggest problem is supply, his issue is finding the supply. He has markets, he gets calls for orders constantly. His issue is finding supply to be able to fill those needs.

[Page 22]

I believe that if we do begin to produce more high-value wood that yes, we will be able to manufacture that.

MR. PARSONS: My answer to your question is yes, I agree with your synopsis. The second part of your question, I mean I can't gaze into the future, that's part of what I get out of what you're asking me. What I do get out of your question, though, is I think it takes a holistic approach. We have to look beyond the woodlot gate to answer your question. We have to look at forestry, the potential shift in forestry, the new types of products that will come out of it, and then integrate that into the larger economic model, which takes other departments, other resources, other perspectives. I would like to think we'll have the demand and I'd like to think we'll have a local demand because people will always be renovating their homes, there will always be that need for wood, people will always have hobbies, and there will be that need for wood.

People need to know that those local products exist, would maybe be an answer to your question. I do think the consumer demand is there, it cycles, but our economy, for whatever reason, is less prone to the economic cycles in other parts of the world. I think you can argue that there will be a constant demand, I don't know what that level is. I think you can also argue that once the distributors and wholesalers realize that product exists, they'll buy local because it will be cheaper and if you project in the future, transportation costs are going to be higher, so if they can buy local it's going to be a cheaper thing for them to do.

MR. EPSTEIN: I'm not disagreeing, I also hope that it's there. I know, however, there's a serious weakness in the housing starts market and that not all of the demand is local, a lot of it is in the U.S. and the housing starts there are down significantly. Anyway, I guess we'll find out . . .

MR. PARSONS: We have different mortgages here, we have a slightly different market. We're not as susceptible to the U.S. boom/bust.

MR. EPSTEIN: True enough. I have a second question that I guess I might direct to Mr. Burrows. I was quite intrigued by the comments you made about equipment and what kind of equipment harvesters were going to be using. I thought the point kind of got left hanging and I wasn't sure exactly what you were telling us about equipment and then I wondered, especially because I heard Mr. Miller make mention of Windhorse Farm as something of perhaps a model. I've been down there, I visited Windhorse, it's an interesting place.

[10:15 a.m.]

Jim Drescher has shown me around and I've seen what he does, but one of the things he does, of course, is he goes out and does his harvesting with horses and he mostly does it in the wintertime and he has kind of a portable milling machine that he takes with him. I

[Page 23]

don't see a lot of that being done. I am aware that there are people in different counties who actually do harvest using horses and do the same kind of selection harvesting that Jim Drescher does. I wasn't sure whether Mr. Burrows was suggesting that all the woodlot owners should kind of move to a system where they're going to be using horses like Jim Drescher does, or whether there's something else that you're talking about. I see this again within the context of kind of moving towards the 50 per cent goal, but are the feller bunchers going to disappear? What's the story?

MR. BURROWS: I think the non-forest-based citizenry do not distinguish between feller bunchers and low-quality work and high-quality work. If the work is done to a proper standard it will be done at the time of year when major destruction of the land base will not occur. When somebody walks through the work that is done they will not be able to tell if it has been done by mechanical means, by a horse, or whatever. It all comes back to the operating standard and what the goals and objectives are.

I think we really have to move away from this mentality that mechanically-harvested wood is a no-no and distinguish between the quality of the work that is done. There is not the manpower out there to do this work manually, the infrastructure is not there with the number of people who will do it, you can't afford to do it. There will be some done, but majorly it will be done by smaller, more gentle, more highly-policed operations that don't run 12 months per year or 10 and a half months. There's a mud season in the Spring and a mud season in the Fall, and it just gets longer as climate change occurs, and those are months that you just cannot do quality-type work.

MR. PARSONS: I think it's important to remember scale, that we operate at different scales in forestry in Nova Scotia. I was reluctant to use the Windhorse Farm example because it's a comparatively small land base with an exceptionally high value condition. Jim Drescher is able to do things there that others aren't. But for different scales, from very small-scale, labour-intensive approaches on small woodlots, to more industrialized approaches available on Crown land, there are systems that are better suited to uneven-age management than those that are designed specifically for volume. We've been moving over the past number of years toward an increasingly small number of large contractors designed to put wood on the side of the road and it's just a different approach and it warrants different approaches for different scales, I guess.

MR. EPSTEIN: I'd say that's right, I think Windhorse Farm is great, but Jim Drescher and his family are in part the beneficiaries of an accumulative 150 years of the same style of management on the same property, which is not a situation that every woodlot owner has.

MR. MILLER: Absolutely. Don't get me wrong, we could get there, it just might take 600 years.

[Page 24]

MR. PARSONS: Excluding the land base, I have tried the idea of looking at selection management, I have my own sawmill, I've tried to cut wood, and quite frankly it's more expensive. When I do that I'm not competitive because I have other larger, more mechanized mills around my area and also my prices of wood are driven because we also import quite a bit of wood. While we export our pulp and paper products we import quite a bit of lumber from Quebec, from Ontario, from out West, from the U.S., so those are the real economic pressures in the marketplace. Wood is still a commodity, much like pulp and paper is, and consumers are making decisions. Unless they say I am interested in FSC-certified lumber or lumber from this particular person or this woodyard, it's a price-driven decision and always will be.

MR. EPSTEIN: I agree. Can I just ask one quick point? The mention was made a couple of times about the stumpage rates and the notion that the Crown land stumpage rates should change. What should they change to? Where are they now and what should they change to? I want to hear some numbers.

MR. BURROWS: I am not up to date on where they are now. The first time woodlot owners ever had a chance to look at the Crown stumpage rates was back in the mid-1980s with the Reed Report - I don't know who all remembers that - it was the first public look that any of us had at Crown stumpage rates. I'm not sure where they are at the present time, but you have to remember that with Crown stumpage rates there are a lot of other factors negotiated into them, like what the company spends building the road into access, it's very difficult to come up with that. The only thing I can state there is that I think we need to have a real serious public look at the Crown stumpage rates.

MR. EPSTEIN: Thank you.

MR. CHAIRMAN: Mr. Glavine.

MR. GLAVINE: First of all, just a couple of comments. Some of the goals that have been stated so far around the strategy are certainly laudable. However, I still think achieving them is going to be very challenging around the fact that now permits won't be required, management plans won't be required, there's going to be a self-reporting system, they don't have the people to be able to monitor the full strategy when it goes into place. Successive governments have clearly committed that we will have a pulp and paper industry and we don't seem to have made the subsequent commitment to do it differently. Many of the small woodlots, for example, that we're now talking about that will only require self-reporting are not owned by people who live in rural Nova Scotia. We have a lot of obstacles moving forward.

When I say successive governments have committed: a $75 million loan to Northern Pulp, a 650,000-ton biomass project for NewPage, a land swap of $24 million going to Bowater. We've done in Nova Scotia what Newfoundland and Labrador, New Brunswick,

[Page 25]

and some other provinces weren't prepared to do. We have subsidized our mill operations to an unbelievable extent. Consequently, we have to keep fibre going to them.

I endorse where the strategy is going. I think to achieve it is a monumental challenge because we are committed to the industrial model which pulp and paper clearly requires. We cannot compete globally unless - we're already gone down the road of subsidizing dramatically in this province and to keep the fire going, we have to continue some of the practices that we currently have.

So that being said - I make that comment and if you want to react to it, fine - I'm concerned now that government committed to CSA certification now seems to be pulling back and saying, FSC is the way to go, yet our neighbour provinces New Brunswick and P.E.I. are getting the people carrying out CSA certification on the ground in both New Brunswick and P.E.I. It looks like we're going to favour FSC versus the other certification processes, so I'm just wondering what your comments on that would be. Are they very similar? Are they going to achieve some of the same goals? Or truly, are we saying one is superior to the other?

MR. MILLER: I believe the preference for FSC that our association has shown, because we partnered with a private resource manager since the early 2000s, Nagaya Forest Restoration, and been involved. Many of our members are also members of this private resource management pool for FSC.

I think the big benefit is on the market side. It is just generally held among environmental groups that FSC is the more stringent. Part of that may very well be marketing on the part of FSC but that's the way it is now.

Now, Mr. Glavine, I believe that in P.E.I. they've gone to FSC certification, through this same company that we've traditionally partnered with.

MR. GLAVINE: I know that they've actually invited the group doing CSA over to the Island.

MR. MILLER: Right, yes, but that would be on the private land side. I believe the P.E.I. government is now in the process of certifying all Crown land to FSC and really taking a fundamentally different approach to forest management.

Just on your comment, I guess the position of our association would be to support FSC management. I believe that manufacturers - and the sawmill I spoke about earlier that had a hard time getting fibre, his issue is finding certified fibre. He was adamant that if the Crown lands in Nova Scotia all became certified to the FSC standards, it would greatly improve market access, especially on the value-added hardwood side. He was a value-added hardwood mill and he could not find the fibre to fill those orders. I think it would be a great

[Page 26]

step forward, as part of this strategy, to see Crown lands in Nova Scotia move towards the FSC certification.

MR. PARSONS: It will also support the pulp and paper model, though and that's because again, export-driven exporters, people who buy Nova Scotia paper want FSC certified paper.

MR. MILLER: I'd like to speak to that pulp and paper model, if I could. We have a model of forestry in Nova Scotia that is known as sustain-yield forestry. It's the idea that if you plant genetically-improved stock at desired spacing, that you will maximize the amount of wood grown on each hectare. Really that was brought in in the 1970s because there was a realization that once we started to model forest growth and development that we were harvesting too much wood. So plantations and prescriptions like pre-commercial thinning brought with them assumed future increases in yield and shortened timing to operability in stands that were ultimately going to allow us to produce more wood, over time.

Now there are some issues around site productivity when you do clear-cutting that may undermine that in the future. Again, I don't have a study to point to on this but this is just from my own kind of personal knowledge as a student of forestry, and I would say a contemporary student of forestry because the forestry education system has changed a lot in the 40 years since we brought in this model.

A comment that was made during our meeting on December 6^th that I thought was very telling, by the then-Deputy Minister Brian Gilbert - he referenced the biodiversity side to all this thing. That's something that we haven't talked about in here - a lot of the questions have been around markets and that sort of thing - but part of this issue has to do with biodiversity. His comment, which I thought was very telling, was that if we get the biodiversity side of the strategy right, then the forestry issue should take care of itself.

I think that a big part of the issue that we're faced with now is the realization that the sustained yield model that relies on plantations and expected future increases in yield is ultimately potentially impacting the ability for the forests of Nova Scotia to support a full suite of native biodiversity.

MR. GLAVINE: Thank you.

MR. CHAIRMAN: Mr. Boudreau.

MR. BOUDREAU: Yes, thank you. I want to come back to the concept of silviculture funding again. Presently, if I understand it correctly, the funding itself is based on one-third, one-third, one-third - that means the woodlot owner, government and industry. Is that correct?

[Page 27]

MR. MILLER: Kevin is shaking his head no. That's my understanding of the system, that there are contributions from each but maybe if we're allowed to draw on people in the periphery of the room to explain that a little better, Kevin. Introduce yourself.

MR. KEVIN PENTZ: My name is Kevin Pentz and I'm a manager of forest planning for the Department of Natural Resources. I think initially when we did start talking about the new silviculture funding that we started back in 1998, that was sort of the tendency of the model but when it came out, it wasn't. When you read the regulations, it clearly states that the requirement for silviculture in this province falls under the obligation of the user of the wood, so that would be the registered buyers. That's where the obligation is.

Where the actual dollars come from, it doesn't spell out where it comes from. It's not saying that model couldn't be used within individual registered buyers programs. But as far as the regulations state, they make it quite clear that it's the responsibility of the registered buyers.

MR. MILLER: I believe for the last two years, the contribution has been covered from stimulus funding from government?

MR. PENTZ: Well yes, again it is a complicated issue, I don't want to take too much of your time. For the last two years under the - I think it was the communities program - we've been funding the small woodlot portion of the silviculture because there's also the industrial end. The small woodlot portion has been attempted to be funded at 100 per cent but I think it is usually running around 80 to 90 per cent. That was just by policy, not by regulation - the regulation is still in place.

[10:30 a.m.]

MR. BOUDREAU: The reason I brought that up is we had another group in and that was their explanation when I asked this question so I was trying to get further clarity on it. It was a one-third, one-third and I think it was $1 each, or something to that effect.

MR. MILLER: One dollar each for softwood and less for hardwood.

MR. BOUDREAU: Less for hardwood, exactly. In your opinion, is that adequate for sustainability?

MR. MILLER: I don't believe so, no, especially on the hardwood side. The hardwood resource has typically not received the attention it should. I mean our forests in Nova Scotia have the potential to grow exceptionally high-value hardwood and having a reduced contribution towards hardwood silviculture is proof that we're not valuing that enough.

[Page 28]

I think the system, in principle, works in that it ties silviculture contribution to harvest rates. That makes sense, but it is questionable whether we're generating enough investment into silviculture to ensure that our current harvest rates are going to be sustainable in the future.

MR. PARSONS: Mr. Boudreau, one point, I think we need more money to improve our land base but also educate our woodlot owners. You can't separate them.

MR. MILLER: I really need to stress that the funding is not - I'm a consultant and I work with landowners who want to build economic, ecological and social value into their woodlots. The past practices in this province have created a condition that the current silviculture funding does not address. The result is that the only way you can operate these stands is to clear-cut them. Again, we're just going to put ourselves back in that situation where we have sites with reduced site productivity and we're not promoting the types of species that lend themselves well to uneven-age management.

MR. BOUDREAU: Yes, I think you mentioned that the majority of the money goes to clear-cutting, to the categories that support clear-cutting, actually five out of seven and that about 3 per cent presently is going to . . .

MR. MILLER: If I can just take a minute to explain that a little bit more, in a broad sense there are two costs associated with harvesting wood. The first one is the operating cost that is associated with putting wood on the side of the road - capital investment, labour, fuel, that sort of thing. The other cost is associated with re-establishing free-to-grow trees on that side and that's where the real sustainability issue comes in. What we do now in Nova Scotia, the clear-cutting model doesn't invest any money on the harvesting side so it relies on cheaper harvesting methods, but invests very heavily on the reforestation side. I'll use $1,000 per hectare to establish and tend a plantation - these are rough numbers, but this came out of a paper produced by Peter Salonius of Natural Resources Canada. The net present value of that $1,000 per hectare over 60 years at 4 per cent is over $11,000. That is investing all our money into the reforestation side of forestry.

Category 7 represents a fundamentally different approach because it invests in the harvesting side. The money gets put up into the harvesting operation, it's designed to secure natural regeneration and that money is sort of a tending operation. You invest on the harvesting end, you don't need to invest on the reforestation end. The rate in 2010 was $450 per hectare. The paper I'm talking about referenced the increase in operating costs for doing partial harvesting as opposed to clear cutting. The value that Mr. Salonius used was $350 per hectare in increased operating costs.

If you use the subsidy to offset that increased operating cost, front-load the funding into a treatment that secures natural regeneration, if you carry that forward for a similar period, 60 years at 4 per cent, you get roughly about a $6,000 difference per hectare in net

[Page 29]

present value in funding Category 7 versus funding Catagories 1 to 5. That's the difference; it's a fundamentally different way to fund harvesting.

MR. BOUDREAU: I'm glad you picked that up because we have a resident of Canso, Don George, who was a chief forester in Algonquin Park and worked with the Government of Ontario for a number of years. He explained this exactly as you did, especially with regard to the hardwood that we have in the province because he feels, as many of us do, that it's seriously undervalued and we need to work in a direction so that we cannot let it go the way of our softwood and add the value that is necessary, that we should be adding for the benefit of all Nova Scotians.

One of the things that I do want to come to at the very end - before I do, I want to talk about the FSC. It's my understanding with the FSC that that was a movement driven by you folks, industry and woodlot owners in general. That's the impression I got and that's what I wanted to sort of explore a little bit. Is that the way it happened versus CSA?

MR. PARSONS: In the brief history of it, and Nagaya Forest Restoration essentially was the spearhead of the FSC approach in the late 1900s-early 2000. Nagaya represents a small group of woodlot owners who include members of the NSAA - the NSWOOA, but not exclusive to the NSWOOA. Because of the value and the interest that people had at that point of FSC and what it represented in terms of ecological principles, it became adopted by the NSWOOA.

Concurrent to that the province through the - I forget the name of it - the economic fund, the Harper Government's fund they had a few years ago. It had money to improve the number of certified woodlots in the province because certain mills were discovering that they couldn't meet the external demand because there wasn't enough certified wood in the province. The province put a plan in place to certify woodlots and then they distributed money to the three or four various woodlot owner groups within the province.

Each woodlot owner group had the opportunity to select whatever certification system they wanted. The majority of them selected FSC, one of them selected CSA, but it's my understanding that they're even going FSC right now, so that's the brief history.

MR. MILLER: It's important to remember it's a market-driven initiative, so the buyers of the pulp and paper that's produced in Nova Scotia wanted it certified.

MR. BOUDREAU: No, I understand that.

MR. PARSONS: It's a pulp and paper certification, you have to understand that as well, it's not a . . .

MR. BOUDREAU: No, I understand that.

[Page 30]

MR. MILLER: The benefits to the small woodlot owners are market access and hopefully there will be preferred access to silviculture funding as well, but there's no price premium right now.

MR. BOUDREAU: If I have some time? If there are no other speakers?

MR. CHAIRMAN: One minute.

MR. BOUDREAU: Okay. I'm just going to give you guys an opportunity, there are three of you, I'm looking for - I ask this question all the time - your top three wishes or things that you think are important to change to continue to move ahead in this direction?

MR. PARSONS: One, maintain the course. I recognize that there has been change in the minister and deputy minister . . .

MR. BOUDREAU: Stay the course is what you're saying.

MR. PARSONS: Absolutely, stay the course.

MR. BOUDREAU: Good. Anybody next? You all get a crack at one.

MR. BURROWS: I think we need to see our stumpage rate come up to at least $10 for all the product sold and we have to realize we're not in a race to the bottom, we're in a race to the top.

MR. BOUDREAU: That's a good point, a race to the top, I like that. Go ahead.

MR. MILLER: Build value and support the people who want to do this. Myself, as a consultant, and hundreds if not thousands of woodlot owners out there who want to do this type of work. The issue is they're fighting the system right now. The system is overwhelmingly set up for the industrial model and I believe - make some tough decisions, stay the course and we can really, ultimately, increase the amount of wood available and make sure that it's harvested sustainably.

MR. BOUDREAU: Thank you gentlemen.

MR. CHAIRMAN: Mr. MacMaster.

MR. MACMASTER: I'd just like to pick up where we left off on silviculture. I've heard the supply of labour is not great in the province for doing manual work in our forests. Some companies have purchased more machinery because the machines can do the work that the people used to do. Could silviculture programs be better targeted to provide greater stability of employment for those working in forestry?

[Page 31]

MR. PARSONS: Well they would under the Category 7 program because it's a harvest-first funding model as opposed to a reforestation funding model, so yes.

MR. MILLER: I know the department deals in yearly budgets, but some idea of where silviculture funding is going to be in terms of level and availability over a longer time frame would help infuse some stability into that market. I hear that a lot - people say there are not enough people to do the work - but I think there's potential out there. I know there are a number of programs, for example, through the community college which has some forestry training programs, I believe there are opportunities for retention there. Also, my high school in Pictou County has an occupational preparedness program that has a forestry component. There are opportunities to start bringing these young men and women into the industry from there. I think the opportunities are out there.

I know most of our young people are heading out West to work in the oil patch, but I think there are a growing number of people who want to stay in Nova Scotia and if we're able to give them good-paying jobs in silviculture, I'm sure they would stay.

MR. BURROWS: For any person who is investing in infrastructure, other than a hard hat and power saw, you really need to have at least a five-year business plan. In order for people to go out and invest in the infrastructure we need to do this work, there needs to be some sort of at least a five-year window of security that the lending institutions and the people who are going to put their financial future on the line need in order to have the comfort and security to go out and make this investment.

MR. MILLER: People follow the money if they know it's there. Companies that gear up and actively go after it will be rewarded in that type of system. Just like Lorne said, that long-term stability is the way.

MR. MACMASTER: That's kind of what I've been hearing from people who work in the industry, that people won't commit to it because they can't count on it to be consistent for their wages.

MR. MILLER: I think for this to work, for the department to be able to deliver on the strategic direction it announced on December 1^st, all stakeholders are going to have to buy in and unfortunately, from what I've been reading in Atlantic Forestry Review or the water cooler chat, the stump chats you have with people, I really don't feel that there is buy-in right now at all levels. Our organization supports it, but we've supported it all along, so I mean you're preaching to the converted, with us. It's a no-brainer that we're going to be here telling you that this is a good thing.

I'm a little discouraged by the talk that I'm hearing, I'm a little discouraged that people seem to rush to the reasons why we can't do it. I'm not saying it's going to be easy but it's certainly something we support.

[Page 32]

MR. MACMASTER: I'll make one comment and I'm curious to hear your feedback on it. We've talked about improving the value of our forests, more natural growth of hardwoods and such, and I'm all for that. The area I represent is Inverness - the NewPage pulp mill is not in Inverness but it employs a lot of people in Inverness. I know the government has decided to remove 1,000 employees, through attrition, for the next four years but that's across the province. If I compare it to the pulp mill, the pulp mill employs about 1,000 people - 550 in the mill, another 500 out in the forests. Attrition of 1,000 people across the province is significant but imagine over 1,000 people in one community in one shot.

That's what I think about and that's why I'm sensitive to government policy with respect to energy because energy costs are significant for NewPage. I thought it was 10 per cent but it's actually getting closer to 15 per cent of energy in the province in their operations. It's very highly intensive for energy and also for wood fibre because those are two of their three main costs.

It is responsible - NewPage, because we talk about the value in forestry - NewPage is really responsible for Inverness County, which is a rural area of the province, for having the fourth largest per capita income. We do have some prosperity in Inverness County and a lot of it is due to the forestry sector.

[10:45 a.m.]

You just mentioned there is not a lot of buy-in. I think there is some fear out there about changes in forestry regulations and how they might impact the profitability of that industry. I know plantations and clear-cutting are not popular but this is an industry. It's an old industrial industry but it is providing a lot of jobs and a lot of wealth in part of rural Nova Scotia. Your comments on that - is there some way we can find a way to . . .

MR. PARSONS: We were an intervener in the URB discussions this summer about the biomass proposal for NewPage. We supported the biomass proposal. Our big concern, though, was that NewPage is going to get a portion - it's an argument - of at least 50 per cent of that biomass from small private woodlot owners.

NewPage understands very clearly and very succinctly what is on their land and how to manage their land. There is not that level of clarity when it comes to small private woodlot owners, so in some way it's a big unknown as to what the ecological and social impacts will be of increasing the harvest on those woodlands in your county, in terms of the impact on the environment, as I said, and also on the long-term economic health of the local people.

I think the idea of jobs is an important thing but if I was to bring one message back to you it would be, remember, in some ways you are going to a brave new world and it is because we don't know what the impact will be on the private woodlot owners. These people

[Page 33]

don't have enough money to invest to do the proper quantitative, scientific management of their woodlands. I leave it at that.

I understand what you're saying, you want to have jobs but you've got to be cautious because we don't have the clarity of thinking and the clarity of purpose that NewPage has for its own industrial lands and yet they're depending, 50-plus per cent, for the harvest of that biomass on small private woodlands, so they're making best guesses, that was our concern. So you have a lot of hardwood up there.

MR. BURROWS: My comment on the topic would be this. In the economic world we live in - and we are talking world economies and world economics here - it has shifted tremendously since that mill came in and was started and even since it was renewed and rebuilt. World economics may shift to the point that it is totally uneconomical for these mills to exist.

I think we have to realize that's a real possibility with the three mills in the province. They have been struggling for a number of years and will likely continue to struggle. We will likely see a shift from pulping material to biomass in the future, that would be my prediction. We also, as I mentioned earlier, can't always be on the race to the bottom.

As I understand the world - and the association had a partner, a co-op, a number of years ago when we were looking for world markets, we have sold wood on the international market. I personally ended up with a contract to Morocco and sold the type of wood that you would take out of thinnings, small softwood-type wood, for over $500 a cord on the world market, delivered. So we have to have our eyes open a little bit and realize that we are dealing with a commodity.

If we nurture it and if we have the ability to look beyond what we have now, that we may eventually - we'll likely be forced to do it, but there is the potential to put together an infrastructure that will bring back to the rural economy, for a portion of this fibre that we are growing, very much more wealth than we're achieving today. But first we have to open our eyes as Nova Scotians and realize that there's a world out there, that a lot of this world cannot grow wood, that they're hungry for wood, and we have to be wise enough to see if we can do a little bit of marketing too.

MR. MILLER: If I may quickly just say, I think it's all about balance. The industrial approach, which we've supported overwhelmingly for the last four years, does a very good job of growing wood. I'm 28, and my ability to work for the next 30 or 35 years in Nova Scotia, unfortunately, depends on the forest's ability to produce wood long into the future.

As I said, it's all about balance. I think it's going to take sort of three different approaches - balance and the overall objective being biodiversity conservation and really getting the biodiversity side of this thing right. I think it's going to take three approaches. It's

[Page 34]

going to take a completed protected areas network in the province and we're going to have to work to reduce or limit the amount of even-aged, softwood-dominated forest stands that we produce on the landscape. We're going to have to increase the amount of uneven-age management we do everywhere else that isn't a plantation and isn't a protected area because that type of management really does a better job at providing economic value and growing wood, but also the social and ecological values that Nova Scotians really said during Phase I, that we need to be more accountable to those forest values in the future as part of Phase III.

MR. CHAIRMAN: Okay, Mr. Boudreau, you have one last question and then we'll give the . . .

MR. BOUDREAU: If we have time. You mentioned about the non-buy-ins, groups that aren't buying in. I want to talk about something that I know very well, the industrial model in the fishery, for example. I understand what Mr. MacMaster is saying, but if we just take that and put it into perspective, imagine losing 1,000 employees in basically one community. That's what the industrial model did for us in the fishery and we're all reaping the benefits of that right now.

I'm interested in the non-buy-ins, where are you seeing that? What are the groups - I'm not asking you to name individuals - what are the major groups that aren't buying into this?

MR. MILLER: Well, if I may, as the youngest person here, I think it's really important to remember that over the course of the lifespan of industrial forest management in Nova Scotia there has been a tremendous amount of new knowledge and a shift in what the public values from forest ecosystems. Forest management, silviculture, originated out of a need to grow more wood because society wanted more wood from the forests. Since the introduction of that system in the province, we've had a revitalization or this occurrence now of these other values associated with forests that we need to begin to account for in management.

I think part of it is just around demographics, I believe. The majority of employees, the majority of the people in the forest environment in Nova Scotia have been doing one thing the same way. I consider my father, Tom, to be a very enlightened member of the old school, but he and I don't see eye to eye on everything and it has to do with exactly that: when you're a hammer, every job is a nail. So when you talk about a paradigm shift - and that's really what this is, it's a paradigm shift, it's change, it's uncertainty and when it has to do with people's livelihoods, then they're going to naturally be resistant to that. So without naming any group or individual in particular, and part of this - Mr. Glavine talked about the lack of detailed information at this point, but it is difficult maybe to see through to 2020 and be able to envision the types of changes that EGSPA really set the province in a process to moving towards.

[Page 35]

MR. PARSONS: What's the average age of an average woodlot owner in Nova Scotia?

MR. BOUDREAU: I would say it's probably 60.

MR. PARSONS: Right. As you get older you get resistant to change. These people have all grown up in the traditional model and now you're asking them at this point in their life to do change, so they're naturally going to resist change because they've only known one way to do business, so it's part that. It's everyone and no one, if you know what I'm trying to say.

MR. BOUDREAU: Yes, that gives me a flavour for it, that's good.

MR. CHAIRMAN: Okay, we're kind of running out of time and I'd like to give the witnesses a chance to give a final presentation. What would you like . . .

MR. PARSONS: Is this the time now to ask you questions? (Laughter) That would be helpful.

MR. CHAIRMAN: Tell us what you wanted to ask.

MR. PARSONS: How is the new minister going to change the lay of the land, in your opinion, or is it going to change? How do you guys read that, the change in the minister and deputy minister? Is that a fair question?

MR. EPSTEIN: It's a good question to wonder about, but we probably won't answer questions like that or speculate, but it's a good question for all of us to ponder. Thank you. (Interruptions)

MR. PARSONS: Sounds like a politician, exactly. (Laughter)

MR. CHAIRMAN: Mr. Burrows, do you have any comments you'd like to finalize?

MR. BURROWS: I appreciate this opportunity to exchange ideas, especially where we as the major investors in the province in the forest industry come from. I think it's going to take a major commitment on behalf of everybody sitting around this table to make this a success. It's not only going to be a momentary commitment, it's going to be a long-term commitment. The commitment will certainly in time show back as a good investment to rural Nova Scotia, but it's going to take a lot of co-operation among those who agree that it is the time. I just worry it's going to be a major challenge. I officially see over four or five years that industry will do an end run around this if they possibly can and that the only way to make a success here will be for those who are committed to show that there are methods

[Page 36]

available to us to make this successful. We have to have positive examples if we're going to succeed.

MR. PARSONS: I have one other concern, Mr. Chairman, one point.

MR. CHAIRMAN: Go ahead.

MR. PARSONS: Mr. MacMaster brought up something I wanted to clarify. If you look at the private land base in Nova Scotia and I think as Matt said a minute ago, it's 50 per cent small-private and 20 per cent large-industrial. The large-industrial folks have a very good understanding of the land base, what it's capable of from a scientific point of view. These groups, the folks in those wood groups are very dedicated, engaging people - I know most of them - and it's a positive thing.

I think if you looked at the private woodlot owners, the other 50 per cent, we don't have that same level of quantitative understanding of what's going on in our forests. If one was to ask where money could be put, it could be put in more research and that area because more quantitative research, scientific papers, et cetera, that generates better understanding, which in turn can be used to educate. I think particularly with Inverness, with the new biomass project coming on stream, you're going to really see that first-hand over the next 15 or 20 years, so that could be an area for you to work on as an MLA. Thank you.

MR. CHAIRMAN: I think that just about wraps it up, but we've got some business for the committee members. If you'd give us permission to carry on a little past 11:00 a.m. it would be appreciated.

I certainly want to thank the witnesses for coming and providing the information.

[10:58 a.m. The committee recessed.]

[11:01 a.m. The committee reconvened.]

MR. CHAIRMAN: Okay, we'll get back to the business part of our committee meeting. I guess everyone has a copy of the letter that came to us from the MLA for Pictou East, Clarrie MacKinnon. It reflects back on some of the topics that were talked about where some of the quality wood was being diverted to other uses. If it's the committee's wish that we could have this group come forth and present their case - what are your thoughts on that? Mr. Epstein.

MR. EPSTEIN: Mr. Chairman, I think that our colleague, the member for Pictou East, has identified what is, of course, a real problem in his constituency - the loss of that company is a real problem, no doubt. The difficulty I see, however, is that the committee already has a half-dozen topics that we have either agreed that we're going to move to or

[Page 37]

we've postponed, for one reason or another and, of course, we've also spent a fair bit of time on matters around wood and wood supply. I'm not, by any means, suggesting that it isn't a real problem that has been identified in that constituency, but I think the committee is thoroughly aware of the problem of wood and wood supply, we've had a good look at it throughout a number of meetings.

I guess my suggestion is that we thank the member for writing to us, but move on with some of our other agenda items that we've got . . .

MR. CHAIRMAN: If I could just make it clear, this would be added to our other agenda, not coming before.

MR. EPSTEIN: Right, I think that if we did want to turn our minds to inviting Groupe Savoie, we could do so but the essential point is that we do have another five or six topics that we're going to have to deal with. My concern, when I try to imagine what it is that is on the mind of the member for Pictou East, is that he probably had hopes that there would be an early scheduling of Groupe Savoie and it will no doubt be a disappointment to him to hear that that is probably just not going to happen. If it turns out that it's not possible to hear them for six months or eight months or even a year, who knows what the situation will be at that time.

I think a friendly response that indicates that we're very much aware of the problems in the forestry sector, but have other items that we have to deal with before we move to that, might be the appropriate response. That's my suggestion.

MR. YOUNGER: Mr. Chairman, I would concur with the member for Halifax Chebucto. I would just also add that I think you can let him know that we've had the forestry industry a couple of times, including today, and maybe not covered Groupe Savoie directly, but we have actually discussed the issue, so we're certainly not ignoring the very seriousness of the issue. I think, in fact, they raised it today, even that every issue.

MR. GLAVINE: I was just going to add, once we, as a committee, start reacting to Groupe Savoie, at the end of March there's a 300-job loss at Larsen's, which again is part of the whole agriculture picture in the province. I think we're better off hearing from groups like we had today and the Federation of Agriculture, the mink industry - there's a number of issues. I think we need to continue to hear from other resource-based industries. We've been very favourable to the forest industry with two presentations already in this calendar year.

MR. BOUDREAU: Yes, I look at the issue that is being raised here and it is a little bit of a different issue. He's talking about using sawlogs, chipping them under the present system that we use. I agree with the committee in the sense that we've already had groups that have been - that we've committed to that we're going to have them appear.

[Page 38]

I'm not sure of the protocol of this, but I'm wondering if, in our letter indicating to them as has been discussed here, that we're unable to do that, if it might be worthwhile to have them submit a written submission. I'd be interested in hearing what they have to say. Again, I'm not sure what the protocol is with that. When a group contacts us, is there a protocol - I'm going to Jana on this one - where we could ask for a written submission?

MS. JANA HODGSON (Legislative Committee Clerk): It's a little unusual, but I certainly can find out what the protocol would be and get back to the committee in that respect, whether or not they could submit something in writing, whatever their concerns are, to the committee.

MR. BOUDREAU: And if the committee doesn't want it, per se, if the whole group doesn't want it, I guess I'm requesting it as a member of the committee; I'd like to hear, I'd like to get the submission from them. Maybe if the committee doesn't want to do it, that's fine, I'll ask them to submit it to me individually, but I'm not sure about the protocol. I see this as a different issue, it's an issue that affects the member for Inverness as well and it affects people in my area because I hear this all the time, people involved in the hardwood industry having access to Crown; in this case, I'm sure this is what is being referred to. So I'll just throw that out then.

MS. HODGSON: I believe that you are certainly welcome to contact them on your own, not as a committee . . .

MR. BOUDREAU: I'm throwing it out, if the committee is interested. Again, I don't know, that's a decision of the committee. So if we want to have a vote on it?

MR. CHAIRMAN: No, it's pretty clear that we can get in touch with them and they can be put on the agenda for somewhere down the road, but we've got our witnesses pretty well lined up, that are coming forth and we'll handle them first. If everybody is agreeable, that's the way we'll go.

MR. BOUDREAU: But that doesn't answer my point about a written submission. Does the committee want . . .

MR. YOUNGER: Anybody can submit a written . . .

MR. BOUDREAU: Yes, okay. I'd like to have it, I mean I can do it individually or as a group.

MR. CHAIRMAN: All right, I guess next is setting our agenda for the witnesses that are coming forth in the next few months. Also February and March which normally our meeting dates would be on the third Thursdays of the month, they have to be shifted a week later or a week earlier, because of the Canada Games; then in March is March Break, so if

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we go a week earlier, both dates would come on February 10th and March 10th. If we go later, it would have to be on the 24^th of each month, is that correct?

MS. HODGSON: It would be correct for the February meeting, we could shift certainly one week before, but the meeting would have to be in the afternoon because the Veterans Affairs Committee meeting is in the morning on Thursday, February 10^th. Unfortunately we cannot shift the meeting for the week after because there is an upgrade of equipment happening in all the committee rooms and we will not have recording apparatus available to us. So for the February meeting there is really only the option to go forward, to have the meeting slightly beforehand. For March we have that leeway, we can go a week before or a week after.

MR. CHAIRMAN: My suggestion is to go earlier, the 10^th.

MR. BOUDREAU: The only thing I'm going to ask now is, can we get that schedule sent out now because I like to pencil stuff in so that I know ahead of time. I'm going on the fact that we're looking at the third Thursday right now, right? So if there are changes that we're making, can that just be sent out, as soon as possible?

MS. HODGSON (Committee Clerk): Yes, after the committee agrees on the . . .

MR. BOUDREAU: Yes, that's what I mean.

MR. EPSTEIN: So February 10^th in the afternoon and then - I didn't follow - and also March 10^th?

MS. HODGSON: Yes, March 10^th in the afternoon.

MR. EPSTEIN: Okay, that's fine.

MR. CHAIRMAN: Is it agreed?

It is agreed.

For our witnesses, and I believe it's for the Liberal caucus to decide, in the past we had - I guess the December 9^th meeting was going to be the Federation of Agriculture.

MR. YOUNGER: Yes, if they're available on the 10^th and if they're not available, then the other one that we had approved earlier would be the Offshore/Onshore Technologies Association of Nova Scotia, so that gives you a backup in case the Federation of Agriculture isn't available.

MR. EPSTEIN: That's February. Is March going to be Lower Churchill?

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MR. CHAIRMAN: For March, the PC caucus.

MR. MACMASTER: This Scotian WindFields was that done?

MR. YOUNGER: Yes.

MR. MACMASTER: Okay. Forgive me because I don't sit on the committee normally, but, yes, I would say it looks like it had already been approved back in November for the Lower Churchill Falls project, so that hasn't come before us yet. How about the Progressive Conservative caucus will make a motion to bring that project before this committee and if we could bring in the Department of Energy and possibly Nova Scotia Power?

MR. CHAIRMAN: Is it agreed?

It is agreed.

MR. CHAIRMAN: I guess that looks after just about everything.

MR. YOUNGER: I might be playing with semantics here and I apologize, but it's probably Emera, not Nova Scotia Power because I don't think Nova Scotia Power is directly involved. I know that's probably semantics, but they are two separate companies. You probably want the person who can talk about it.

MR. MACMASTER: I've heard Nova Scotia Power talk about it too, though. (Interruptions)

MR. CHAIRMAN: Just before we break, Howard, maybe we could pick another topic from each caucus before we leave?

MR. YOUNGER: Our other one would be the Offshore/Onshore Technologies Association of Nova Scotia.

MR. MACMASTER: Then why don't we say Emera and whoever they choose to bring, they'll bring them over anyway.

MR. YOUNGER: A lot of them work for both.

MR. CHAIRMAN: Any suggestions for another topic for your caucus?

MR. EPSTEIN: I think mink farms would be the next on our list.

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MR. BOUDREAU: Yes, we have two topics here that were approved; Coastal Zone Management might be timely, too, considering all that is going on.

MR. CHAIRMAN: Trout Nova Scotia is very interested in coming forth at some point.

MR. BOUDREAU: So mink farms, is it?

MR. EPSTEIN: I think so.

MR. CHAIRMAN: Is it agreed?

It is agreed.

MR. CHAIRMAN: Very good. I guess that winds up our business. I'd like to thank everybody for taking part in a very good meeting. I think it's information that we all need to know and we'll put it to good use.

[The committee adjourned at 11:16 a.m.]