Attention All Forestry Contractors

Opportunity: The Future of the Nova Scotia Forestry Contractor

First and foremost, we extend best wishes to you and your love ones and hope you are keeping safe during these unprecedented times amid the COVID-19 pandemic. By preparing for the new ‘normal’, we believe contractors, with a united effort, can mitigate the economic fall out to our companies, other businesses, and our province.

We, the undersigned contractors are calling on all forestry contractors across the province to communicate with your provincial MLA’s as well as other community and political leaders to advocate for the solutions that are highlighted in the attached Position Paper.

As you know, on December 20th, 2019, the decision by Premier MacNeil to not grant an extension of the Boat Harbour Act led to the forced closure of Northern Pulp. The marketplace changed immediately for the sawmill sector, woodlot owners and all forestry contractors. Reduced markets for sawmill residuals and limited or no outlets for pulpwood, have led to a huge level of uncertainty in the sector. The real impact on the entire industry and contractor’s businesses is only now starting to be realized as the operating season is about to start after road closure.

The government appointed transition team has initiated a series of programs attempting to support silviculture, road construction and harvesting contractors, but to date has made no headway on identifying or supporting proposed new markets to replace the volume lost by the closure.

Key players in the industry have been communicating with government through the transition team, proposing potential options to secure temporary and longer-term markets for sawmill chips, hog, and pulpwood. Along with these efforts, the need to provide forestry contractors with up to date information and a collective voice was identified.

On March 5th, a representative group of contractors from across the province representing harvesting, silviculture, road construction and trucking met in Truro, at the invitation of the Canadian Woodlands Forum (CWF) through their High Performance Logging (HPL) program. The CWF committed to providing communication in the form of updates and coordination support to forestry contractors across the province. The primary purpose of the meeting was to discuss the impacts and challenges facing the contractors and to develop a course of action for all forestry contractors in finding and supporting viable solutions that would prevent the collapse of the forest fibre supply chain that is critical to the future of the sector and rural Nova Scotia.

We are encouraging all forestry contractors across the province to become engaged and communicate with your provincial MLA’s; we also commit to requesting a meeting with the Premier to review the situation and gain support for implementation of the proposed solutions.

Engaging neighbours, communities and decision makers as a common voice can be our role as small businesses supporting forestry; this is an opportunity for you to participate in that commitment.

If you have any questions or would like to discuss elements of the report, please feel free to reach out to any of us. Please channel your comments and results of your conversations with your MLA’s and other stakeholders to Peter Robichaud of the CWF, at 902 899-6420 or probichaud@cwfcof.org .

Thanking you in advance. Sincerely,

Brent MacInnis – Hugh MacInnis Lumber Ltd.

Shaun Scott – Scott and Stewart Forestry Consultants Ltd. Ralph Stewart – RES Sustainable Forestry Ltd.

Mark Bannerman, Calvin Archibald – Next Generation Forest Management Ltd. Neil Kenney – N.R. Kenney Logging Ltd.

Gerald Battist – Gerald Battist Trucking Ltd. Marshall Bateman – ABL Timber Ltd.

David MacMillan – MacMillan Forest Inc. Steven Wood - D & B Wood Forestry Limited Darrin Carter – Darrin Carter Logging Ltd.

Matthew MacGillivray - L.G. MacGillivray & Son Lumbering Ltd.

Ed and Ryan Corkum – Evangeline Transport Inc, E B Corkum Farm & Forest Ltd. Andy Looke – Looke CanCut Limited

Chris Weare – R & C Weare Logging Ltd.


Opportunity: The Future of the Nova Scotia Forestry Contractor

Position Paper #1

Background

On March 5th, 2020, the Canadian Woodlands Forum through the High Performance Logging (HPL) initiative coordinated a session with 14 forestry contractors from across Nova Scotia to assess the impact of the closure of the Northern Pulp mill on the forest fibre supply chain in the province. The purpose of the session was to develop ‘path forward’ solutions to help sustain the forest fibre value chain and ensure a viable, healthy supply to meet current and future needs of the sector. This report has been compiled to outline the discussion and key takeaways from the session.

The group of forestry contractors who participated in the session represent significant harvesting, trucking, silviculture and road construction capacity in the province. They are indicative of all forestry contractors who are enterprising rural business owners, many of whom are multi-generational. With significant capital investment and commitment to their communities, they provide well-paying, full time employment of a highly skilled workforce. Their operations contribute towards the sustainable management of Nova Scotia’s forest resources and support the economy of rural Nova Scotia procuring a range of supplies and services from fuel to tires to safety equipment. They are a critical piece in the fabric of the rural communities they call home.

The Impact of Northern Pulp’s Shutdown

The Northern Pulp shutdown eliminated the primary market for sawmill residuals and pulpwood in Nova Scotia. Without a market for pulpwood, landowners who hire contractors to harvest their woodlots have, and will, continue to significantly reduce the volume of harvesting they perform. This reduces the work available to forestry contractors and will result in many going out of business. One logging contractor reported that prior to the Northern Pulp closure, they had two years of work secured with private landowners; they have since lost 90% of their work, as landowners withdraw their woodlots from the market.

Further, the shutdown has caused a drop in saw log and stud wood prices as sawmills seek ways to remain competitive. This has resulted in a further loss of income for logging contractors and the private woodlot owners whom they rely upon for work.

The impact on sawmills has also been significant, and while some have been able to make deals that temporarily create new markets for their sawmill residuals - these have been at lower prices and are less secure than the Northern Pulp market. Sawmills are also not immune from landowner withdrawal from the market as this reduces the supply of ALL primary forest products, including saw logs and stud wood, further jeopardizing their viability.

If markets are not found immediately, there is significant risk of rapid collapse of the forest sector as sawmills as well as forestry contractors are forced out of business and private woodlot owners stop marketing their wood fibre.

Potential Solutions

It is the opinion of the forestry contractors in this province, that the preferred, long term solution is a re- start of the Northern Pulp kraft mill.

Kraft Pulp is used to make a range of products including tissue, paper towel and toilet paper. These products are in demand and as result the market for Kraft pulp is growing globally at over 4% per year.

Northern Pulp’s purchase of pulpwood and sawmill residuals provided a steady, reliable income stream for the entire fibre supply chain including sawmills, forestry contractors, and landowners. Additionally, no other option investigated provides as much return for landowners and forestry contractors – the price for fibre Northern Pulp paid is simply un-matched by any alternatives, including those mentioned below under “Solutions to Address the Immediate Crisis” and “Longer Term Options”.

In short, Northern Pulp provided for a sustainable, high value industry and was a significant driver of the rural economy and the health of the forest industry and its contractors. Everything that can be done to facilitate a timely re-start of the Northern Pulp mill should be the focus of government and the people that support this mill.

Recognizing that this may take some time and to help the Premier fulfill his commitment to support forestry workers and create diverse market opportunities, forestry contractors reviewed a number of ideas that may be helpful and would like to offer the following options that would help avoid the collapse of the supply chain and bridge the short term gap.

Solutions to Address the Immediate Crisis

1)An option that serves the entire province and could be executed immediately is to work with Nova Scotia Power (Port Hawkesbury) and Brooklyn Energy (Liverpool) to increase output of these power facilities and therefore the consumption of sawmill residuals and roundwood. This could be a ‘win-win’ as NSP works towards achieving their renewable energy targets for 2020. Increasing fibre consumption at Brooklyn Energy would help stabilize the supply chain in western Nova Scotia but will have little impact on the rest of the province. It must be understood that although this option would provide a market for hog fuel and sawmill chips; the delivered price for chips to this facility would be roughly half of what sawmills were receiving from Northern Pulp.

2)An option to inventory pulpwood in yards, as proposed in a plan presented to the Transition Team by Great Northern Timber (GNT) and Port Hawkesbury Paper (PHP). The plan proposes working with government and using a portion of the allotted $50 million, earmarked to help transition the forest industry, to create a market for 550,000 green metric tonnes. Potential markets, for this inventoried wood, could facilitate an early re-start of Northern Pulp, a commercially viable bioenergy venture or export chips via GNT.

Longer Term Options

1)A proposal from LinksEdge Ltd to export 750,000 tons of wood fibre annually into the European markets. The project has interest from a European Pulp and Paper customer who would purchase the product. A further investment in the construction of a phytosanitary unit to heat treat wood fibre (a requirement to sell to European markets) would allow this option to proceed. This is a 18-24-month project with a significant investment of over $20 million.

2)Freeman Lumber and GNT are working together to build a new pellet mill on the Freeman sawmill site in Greenfield, Queens County. This potential facility could consume approximately 250,000 GMT of locally produced sawmill residuals and low grade roundwood annually. This is longer-term option (18- 24 months) that would help stabilize low grade wood fibre markets in Western Nova Scotia.

Impact on Sustainable Harvest Level

In total, it is estimated that these four projects would create demand for an additional 1.5 million tonnes of wood fibre annually in Nova Scotia. With a Northern Pulp re-start and assuming the remainder of the industry remains intact, total demand for wood in the province would rise to about 5 million tonnes per year - well below the sustainable harvest level estimated for the province of between 6 and 7 million tonnes per year.

In Conclusion

In light of the unprecedented impact of the COVID-19 pandemic, introducing mitigative measures to help the forest sector as outlined above will have the dual benefit of stimulating economic activity while fulfilling the Premier’s commitment to support forest workers impacted by the closure of Northern Pulp.

Many forestry contractors, regardless of their roles in the supply chain from forest to mill gate, are concerned with the imminent threat to their business viability, the livelihood of their employees, and by extension to the rural economy of the province.

As forestry contractors, we believe in well managed forests, a sustainable integrated forest industry and access to a diverse marketplace. Serious consideration, regarding the restart of the Northern Pulp mill and all interim options as outlined above are critical to preserving the role we play in the forestry supply chain and the rural economy of Nova Scotia.

(Position Paper #1 – May 4, 2020)



Opportunity: The Future of the Nova Scotia Forestry Contractor

Update #2

Forestry Contractors’ Position Paper

Back in May of this year, forestry contractors compiled their concerns in a position paper regarding the impacts of the Northern Pulp closure, calling for immediate government action to resolve the issues facing the restricted markets for pulpwood and the entire supply chain. The position paper outlining these concerns and proposed solutions were sent to forestry contractors across Nova Scotia as a point of keeping them informed and calling on the contractors to communicate with their provincial MLA’s and other community and political leaders to advocate for the solutions. For your convenience and reference, you can find the position paper HERE

As part of this ongoing process, this second update contains important information and results from recent meetings, including a progress report on the status of the proposed market solutions contained in the position paper.

Update on market proposals

1. Wood-Energy

In June, the Forestry Transition Team released an update on their efforts to support the sector following the Northern Pulp closure. The update referenced the potential to increase the use of locally sourced biomass to help the province achieve its renewable energy targets for 2020. We have heard that fibre procurement has increased at both Nova Scotia Power in Port Hawkesbury and Brooklyn Power in Brooklyn.

2. Pulpwood Yard Strategy

The Forestry Transition Team has suggested that the Pulpwood Yard strategy proposed by Great Northern Timber & Port Hawkesbury Paper be presented to the newly formed Forestry Innovation Transition Trust. This strategy would see a market created for 550,000 GMT of roundwood to help forestry contractors in light of the closure of Northern Pulp. For this project to be approved, it will be critical for the Trust to understand how it provides short term relief for forestry contractors and stabilizes the supply chain while Northern Pulp re-starts and/or new markets are developed.

3. Pulpwood Export Strategy

The proposal from LinksEdge Ltd. To export 750,000 tons of wood fibre to a European Pulp and Paper customer was delayed as a result of COVID-19, however, the customer remains interested and is planning to visit Nova Scotia in the coming weeks to assess potential export terminal sites.

4. Freeman/GNT Pellet Mill

Freeman and Great Northern Timber are continuing to work towards construction of a new pellet mill on the Freeman sawmill site in Greenfield, Queens County.  This facility will consume approximately 250,000 GMT of locally produced sawmill residuals and low grade roundwood annually. 

Nova Scotia Forestry Contractors Meeting with Tim Houston, Leader of the Opposition

On May 20th, a group of contractors and the CWF met with Tim Houston to present and highlight the current situation facing contractors and the supply chain contained in the position paper. Minutes of the meeting can be viewed HERE

Northern Pulp Mill Update

In June, Northern Pulp entered creditor protection as a consequence of the mill’s closure. However, they remain committed to the re-start of the mill and entering creditor protection provides a means to improve their financial position with the ultimate objective of resuming operations.

Also, Northern Pulp plan on working with stakeholders to explore treatment options that would have public support. While this work is in its early stages, Northern Pulp is excited that this could present an opportunity to expedite the EA process and re-start of the mill.

Meeting with Lands & Forestry Minister Iain Rankin

Forestry contractors have been in contact with the Ministers’ office to schedule a meeting to present the concerns of contractors across the province with respect to the Northern Pulp closure and the impacts on their rural businesses and the economy of Nova Scotia.

NS Contractor ‘business stability & outlook’ Survey

There has been ongoing dialogue with government departments and the forestry transition team outlining the concerns and pending impacts on the forestry supply chain, however, without having current, quantifiable information to measure the true impacts of the closure, our conversations tend to go nowhere; this is where we need your help!

In the next couple of weeks, the CWF will be in contact with a representative group of contractors to conduct a personal, one on one phone survey; the results of our conversations will provide a better understanding of the true status of the contractor infrastructure, capacity, and business viability in both the short and long term. A report will be generated to inform all forestry contractors, government, and the forest sector of upcoming issues, trends, and overall financial health of the supply chain. If you are interested in participating in this survey, please contact us directly.

Forestry Transition Team – Update to the Forestry Sector

Back in June, the provincial Forestry Transition Team provided their update to the forestry sector including a New Vision for Forestry in Nova Scotia. It outlines a framework to guide decision making for government with a new vision, principles, and strategic priorities. A copy of the update may be found HERE.

(July 8, 2020)



Nova Scotia Forestry Contractors Meeting with Tim Houston, Leader of the Opposition
Minutes of Zoom/conference call - May 20, 11 am to 12:15 pm

Tim reaffirmed his taped Dec 23rd comments re Premier's decision that he

      • realized the impact
      • had asked for more structure to the process
      • worried about impact on forestry
      • wanted to make sure we have forestry in future
      • recognized need to rebuild industry
      • wanted to make sure we have jobs
      • wanted to unite community

With respect to Northern Pulp (NP) - he stated he is supportive of an open process for environmental assessment, by way of an independent expert panel, suggesting process similar to the UARB. He indicated that government must make the process open in order to gain the trust of the majority of the population. 

Tim advised he had reviewed our position paper. This led to discussion to clarify the contractors’ points and to share with him the impact the closure of NP is having on them, their companies and the industry.

      • Loss of the high value sawmill chip market has resulted in a huge drop in market prices for logs and studwood
      • Reduced stumpage values on the lots with high % sawables, inoperability of many mixed species lots (no outlet, withdrawn from the wood supply)
      • The impact is province wide – even in areas that are in reach of Port Hawkesbury Paper, there is now no market for off species (30 % of the average lot on Cape Breton).
      • Commercial thinning and implementation of the Lahey report is effectively eliminated in central and western NS. At present, harvesting is only feasible by high grading the best forest stands for studwood and logs.
      • Current harvest levels have been reduced from half the annual growth to about one third.
      • Any loss in the harvesting and trucking infrastructure will be exceedingly difficult to regain in the future (2008/2009 NW Ontario example)
      • Contractors reminded him of the Ivany report and the recognition that forestry is and must remain a major cornerstone for the Province.
      • Young people in our industry are concerned that if the impacts are not addressed it will not be possible to attract youth to our industry.
      • Interim markets for low grade wood are critical to maintaining harvesting and trucking infrastructure and returning value to the forest landowners.
      • The contractors emphasized that Northern Pulp is prepared to invest in NS and that this is positive for the economy and rural NS communities
      • Kraft pulp is a growing stable commodity, offering significantly greater value for low grade wood than biomass.

Proposals that have been made to the Transition Team (TT) which are supported by the contractors (but appear to have fallen on deaf ears) were summarized for Tim Houston including:

a) Increased biomass consumption by NSP and Brooklyn Energy

b) The pulpwood inventory plan from Great Northern Timber and Port Hawkesbury Paper.

c) Proposal from LinksEdge to export pulp grade chips to a European customer.

d) Freeman Lumber and Great Northern Timber proposal to construct a pellet mill at the Greenfield mill to consume low grade wood fibre.

The Contractors re-emphasised that interim markets must be found to avoid a major collapse of the industry.

Tim advised his intent to attempt dialogue with the transition team. He noted that Tory Rushton, MLA for Cumberland South will be following up on this file. Tim confirmed he would abide by EA decision with respect to a mill restart. He stressed importance of trust in the process.

The contractors shared their belief that the government is anti forestry, and that the Transition Team is for optics only.

The contractors thanked Tim for his time to listen to their concerns and proposals.

Tim thanked the contractors for their passion and concern for forests, the supply chain, the current status of our industry, and the sustainability of small business in NS.




Powered by Wild Apricot Membership Software