Premier David Award, Minister Blaine Higgs and their government face a challenging task in preparing the Provincial budget that steers our economy. They are under many pressures to balance the budget, reduce spending, all while trying to offer quality health care, education, and infrastructure New Brunswickers rightfully expect.
In order to bring New Brunswick back to balanced budgets and deliver quality services to New Brunswickers we must look forward to sustainable revenue sources. The good news is our greatest resource is renewable. Our forests have sustained our communities for centuries and because of intelligent management our forests can continue to provide prosperity and a healthy environment for centuries to come. We are a forestry Province. We have seen the benefit of a managed sustainable forest harvest.
Forestry is the backbone of rural New Brunswick. 21,000 families are supported by the forest sector with more than 11,650 people directly working in forestry-related jobs that pay $900 million in annual high paying salaries. Forestry represents 5.1% of provincial GDP. That’s higher than any other province in Canada. It accounts for 30% of all manufactured goods in the province. Forestry is also an export-based industry critically important to our economy as it brings in hundreds of millions of dollars in new wealth to New Brunswick each year.
Forestry is a revenue generator for this province. Industry pays 36-$45 million in annual royalties for Crown wood, $270 million in direct taxes to governments and generates an additional $249 million annually in taxes from employees. Add them up and you have more than a half billion dollars in direct revenues to the province. More-over, these revenues can be increased by making more Crown wood available and using the fibre as an economic lever to grow.
We firmly believe that future revenue opportunity lies in a secure growing wood timber objective on both Crown and Private land. Wood supply is the first and most important part of the strategy to grow our economy. Without adequate and increasing fiber it is virtually impossible to secure future investment in the sector that will be needed to modernize and ensure a competitive industry.
Eighty percent of New Brunswick’s entire land base is forested land. In the 7.9 million hectares of Crown and private forested land lies everything needed to provide for a healthy environment and a vibrant economy. What’s missing is a forestry vision and plan that would maximize the resource from Crown and private land to the benefit of all New Brunswickers ensuring the future growth of this sector.
Over the past 50 years government and private forestry firms have planted 1.5 billion trees. This continually growing resource will reach a mature age that will make the fibre merchandisable over the next 10-15 years. Many may be surprised to learn that at the current harvest levels and rate of planting, New Brunswick could, in 50 years from now, sustainably double the amount of wood that is harvested in New Brunswick and still have as many trees left standing as we have today. Simply put, due to our well managed forests and our continued commitment to sustainable forestry, we can grow all the fibre we need to create jobs and grow our economy.
With the right plan and a government commitment to assign that wood for economic development, we have the ability to double all the economic values if we gradually increase the allowable annual cut over time. It is possible to sustainably reach a goal of doubling the wood supply by the year 2063. In today’s dollars, that would provide another $37.2 million in royalties, an additional $270.5 million in forest industry direct tax contributions, $228 million in employee tax contributions and another $226.8 million in the overall economic impact. With a potential additional $762 million annual new direct revenues to the province, all from a renewable and sustainable resource, it is irresponsible for government not to have a long term growing timber objective.
Offering New Brunswick’s forest industry a stable, dependable, measured and most importantly growing wood supply will strengthen the future of our forest communities. It is not an understatement to say the Government’s management choices will dictate the future of New Brunswick’s forest sector. Allowing for long-term planning, that creates and encourages long-term investment, from the forest industry will be the best way to preserve and create jobs for our communities. It will also promote economic growth for the Province, all while increasing the much needed royalty and tax revenues.
If we want to create more economic wealth and create more jobs, we need government policy and strategic directions that support a sustainable and growing forest sector.
A long term growing timber objective and sustainable forestry is the solution for economic growth. They will generate needed revenues the province is seeking to fund a healthy share of the services all New Brunswickers rely on every day, such as healthcare, education and infrastructure. With the right vision and policy we can move forward on the path to prosperity again.
Mark Arsenault is the President and C.E.O. of the New Brunswick Forest Products Association.