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A forestry contractor perspective on Northern Pulp

April 17 2015

Published on April 14, 2015 The News 

By Calvin Archibald
Next Generation Forest Management Ltd. (www.nextgenerationforestry.ca) is based in Pictou County currently working for Northern Pulp.

This will provide some recent history, summarize contribution to the Nova Scotia economy and voice concern about the future of our industry. In particular it will address risks inherent in the current impasse over the Industrial Approval Permit for Northern.

History:

Next Generation was incorporated in 2001 to assist private property owners manage their woodlots.

We have been a supplier to StoraEnso, Julimar, MacTara, and New Page, all of which failed to survive in Nova Scotia. We wrote off significant unrecoverable silviculture and wood sales due to bankruptcies. Having hope for our industry, we continued, buying assets from other contractors who decided not to continue. Next Gen employees earned 2007 Contractor of the Year for Nova Scotia and a Better Business Ethics award.

Pictou County personnel were essential to our success. “Next Gen” left work in Cape Breton and began contracting for Northern Pulp so employees would work closer to home.

We are proud of how our effort with Northern Pulp and the forest industry contributes to the revenue side of our government’s balance sheet. Recently our industry has benefited from the devalued Cdn dollar and world markets.

Working for Northern Pulp

Northern Pulp is owned by Paper Excellence which has seven mills in Canada. In Nova Scotia they are 90 per cent self sufficient in power generation, operate the largest tree nursery plus own and manage 175,000 ha. Their N.S. woodlands injects $80 million per year in the N.S. economy through chip, pulpwood and bark purchases, plus $45M sales to other Nova Scotia sawmills. Not counting the mill site and nursery 400-500 jobs are created in harvesting, trucking, road building and silviculture.

Next Gen is one of approximately 25 independent Northern harvesting contractors. In the 2014 fiscal year Next Gen paid out $629,749 to 22 employees, $238,536 for labour to grow trees.  Silviculture expenses were not fully funded in 2014 from anticipated sources. Northern and the Association of Sustainable Forestry are our only remaining sources of silviculture funding.

Since 2013 Next Gen has invested more than $1 million in new equipment from Nova Scotia dealers. Northern advanced more than $120,000, repayable, interest free.

Besides corporate tax “Next Gen” pays EI and CPP premiums to Revenue Canada. All of our employees paid Nova Scotia tax on purchases and income.

Last fiscal year Next Gen harvested about 20 privately held lots. A portion of the stumpage will be returned by the property owner in taxes. Northern has provided private property silviculture funding and by agreement has committed to plant all private lots we harvest requiring planting.

There are more than five owner operators that haul our wood and pay taxes. Our saw log material flows to Scotsburn lumber, JDI in Truro, Taylor Lumber in Musquodoboit and William’s Bros in Barneys River. These businesses generate tax revenue. Other Nova Scotia businesses that provide service to Next Gen and pay taxes are too numerous to list. There are several accounts that exceed $100,000 annually that employ people and pay taxes. Local fuel suppliers, repair and fabrication shops, retailers and other businesses in eastern N.S. are anxious for our business. They all contribute to the revenue side of government.

We are proud we work in an industry that contributes as it does to our health care system, our schools and universities, highways, etc. 

Concerns:

We believe Nova Scotia markets for our round wood product are being unnecessarily threatened by persistent anti-resource and anti-large corporation bias in Nova Scotia.

For example, Chronicle Herald articles on timber allocation from former Bowater lands, now Crown, in western N.S. to Paper Excellence Canada Holdings, (Northern), reports the Ecology Action Centre is “outraged” over Northern’s Crown allocation. This is from 220,000 ha. that cost the government $117.7 million. According to the paper Northern wants 625,000 tonne total which averages 2.84 t/ha. Interest on $117.7 million a 5 per cent is $5.89M annually. Considering the provincial deficit situation stumpage on 625,000 tonne would probably cover the interest as opposed to the taxpayer paying. Harvesting will also provide return on the silviculture investment. Harvesting 625,000 tonne is work for at least 12 contractors plus silviculture crews and company staff. This generates considerable government revenue and keeps young workers our economy needs who want to work in Nova Scotia. Increasingly articles show there are vocal people in Nova Scotia who do not appreciate the contribution of sustainable forestry to the economy.

Paper Excellence and the McNeil government, both relative newcomers, have been targeted for environmental problems created and unresolved over four decades in Abercrombie. Our perception is they have not yet demonstrated sufficient willingness to work together. 

Just as labour relation problems were the precursor of the Port Hawkesbury situation, we believe the Northern Industrial Approval process is threatening the economy of Pictou County and Nova Scotia. Déjà vu, polarized groups expressing concern for all but unable or unwilling to work together to avoid long-term collateral damage. Open honest communication will build trust with industry and environmental leaders working together to find solutions and a path forward.

Government departments can be like silos each with dedicated people with secure incomes and limited focus not having experienced risks/losses of the business sector. This suggests industry, bureaucracy and polarized opinion yield to teamwork with reasoned consideration of potential consequences, using available science, funding and compromise to save our industry. Shuttering our second last pulp mill, losing current and promising markets and losing inherent government revenue would seriously and adversely affect health and education services for all Nova Scotians.

 

Calvin Archibald, P.Eng., is President, Next Generation Forest Management Ltd.

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