New Brunswick’s (NB) provincial government announced recently a plan called, “Putting Our Resources to Work: A Strategy for Crown Lands Forest Management,” which bolsters the province’s declining forestry sector. Specifically, it will increase the amount of crown land available for harvesting by nearly 20 per cent. The government asserts that removing and processing additional wood will create jobs by encouraging additional investment in the area.
However, while the plan seems logical, closer analysis reveals a great degree of uncertainty about its potential to succeed.
The forestry sector, for instance, has undergone major technological advancements that result in more capital-intensive investment, as opposed to labour-intensive. The policy may very well encourage more investment, yet, it might flow into machines, instead of workers. Therefore, although the number of mills and employees in the province’s forestry sector has decreased, it does not necessarily indicate that the amount of harvested lumber has. The ability of this policy to create jobs is limited, not to mention optimistic (however, the amount of public land that the provincial authorities are opening to corporations is very generous). As a result, while technological advances continue to make the industry more efficient, they also give reason to doubt the government’s expectation of increased demand for workers.
NB’s provincial government addressed public concerns regarding conservation efforts by committing double the amount of protected land in the province. What it failed to mention, however, was making these promises in 2012 and scheduling them to take effect in 2014. Consequently, the government is only promising an additional 6,000 hectares of Protected Natural Areas (PNA), not nearly as much as the 135,000 hectares it claimed. Inside PNAs, there is no forestry activity of any kind; yet, key elements of sustainable environmental planning, such as buffer zones along rivers, remain outside this designation. Hence, there is still a great deal of concern about the adverse effects of additional harvesting and processing in NB forests.
In addition, there is uncertainty about the magnitude of positive spinoff. For instance, while the demand for private wood will likely increase, larger firms are no longer required to purchase from private companies. The cost advantages of harvesting crown land and the increasing ability of large companies to do so illustrates exacerbates this effect. Much of the private sector has been struggling to remain profitable and it is difficult to say how much of a boost private woodlot demand will see from greater forest industry investment in the area.
NB’s new forestry plan, announced just two years after the provincial government released a ten-year plan, suggests altered motivations. Public opinion regarding the former plan was largely positive, yet, the province’s new approach is unfavorable toward public input. One year of consulting with public organizations, researchers, and experts occurred before finalizing the 2012 plan, however, this time, the government did not seek external advice or opinions. Furthermore, while smaller firms have struggled to compete, bigger firms have political influence that allows them to bargain for more rents. Perhaps, then, the province’s new strategy has less to do with creating economic growth and more to do with convincing bigger firms to stay. Indeed, their exit could cause the province a significant amount of economic distress.
In any case, this policy’s long-term approval by New Brunswick residents will presumably depend largely on whether it acts as a subsidy to the firms that lobbied for additional rents or as a true expansion of industry opportunities resulting in economic growth for the province.
Rachel Lowe is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute