February 7, 2020
Deputy Kelliann Dean and Deputy Julie Towers,
My name is Stephen Cole. I am a Forester employed by HC Haynes in Western Nova Scotia. Together with my colleague Andrew West, we manage private woodlots, conduct silviculture and reforestation activities, and through our forest management activities we market about 14% of the private timber produced in this Province making us the single largest private wood producer in Nova Scotia. We work with, support, and hire silviculture contractors, road builders, surveyors, truckers, loggers, all of the Mills, and private woodlot owners large and small. We have operated in Nova Scotia since 1991.
We are writing to you following the meeting of the Natural Resources committee on February 5, 2020 and the media reports that followed. The CBC quoted you as saying “We know how many workers there are at Northern Pulp, and how many workers have been displaced, have been laid off at Northern Pulp”, “We only know who we are helping by who comes forward at the Access Nova Scotia centers.” There can be no mistake that all MLA’s (including the Premier and Deputy Premier) have been fully apprised of all, and the degree to which, 10,000’s of people in Nova Scotia have been materially affected. That information is not at Access Nova Scotia and it will not be.
I have to tell you that I am deeply concerned by these words. I know for a fact that the transition team and elected officials have been told loud and clear that those of us that work on the ground, in the woods are suffering. Some businesses have already failed and there are many that are failing. There is no way for Access Nova Scotia statistics/visits to accurately depict the range of affected parties. Why would anyone who works in the forest supply chain go to Access Nova Scotia to report our losses? There is nothing there for them and we have been told that there is nothing in place for us by the government hotline. There is no place to sell our pulpwood (our product) at a viable price. THIS IS OUR PAY CHEQUE THIS IS OUR JOB and it has been lost.
Our company supplied about 80,000 tonnes of the private wood making us their largest private supplier. Northern pulp purchased 400,000 tonnes a year of private pulpwood (200,000 Crown) at an average delivered price of $65/tonne for a total of $26 million. This $26 million provided pay cheques to road builders, loggers, truckers, and landowners. These hard working people lost $26 million worth of pay cheques when the Liberal government chose to break a legally binding agreement with Northern Pulp 10 years early. You will not hear about these losses through the hotline or Access Nova Scotia because they have told enough of us that there is nothing there for that loss. Please accept this as official notice of these losses.
I sat immediately to your left at the meeting in Hilden at Forest Nova Scotia where you and the other Deputies came to hear our concerns. Throughout the meeting I found you to be very attentive and genuine. At that meeting I stated to you that if the government could reach an arrangement to allow Brooklyn Power and Point Tupper to consume much of the material (including pulpwood produced by private landowners) and purchased at prices slightly lower than those paid by Northern Pulp than 65-70% of the pain you were hearing at that meeting would feel relief. Do you recall me telling you this?
We know that the biomass plants have been presented as solutions/markets. We know that there are concerns around their operation. I have had numerous conversations with the Premier that started when he was Leader of Opposition. He and I agreed then, and still do, that the way in which the Point Tupper boiler was operated in the past was very expensive to the ratepayers and it facilitated very aggressive, ecologically damaging, and unsustainable harvesting practices. That is why he removed it from “must run” when he rose to power and I fully supported his actions at that time.
We are in a very different market situation today and we have vastly improved our forestry practices. We have an abundance of sustainably harvested product (400,000 tonnes) from our woodlots that Northern Pulp purchased and provided us with our pay cheques. When NewPage shut down operations in 2011, Premier Darrell Dexter immediately agreed to purchase pulpwood from private woodlot owners at a viable price so they could continue to work which was re sold to Point Tupper at a later date. This action by the former Premier did not prevent us from receiving an exemption from softwood lumber tariffs in 2017 therefore there is no issue with this government taking the same action. During the Natural Resources Committee on February 5 you correctly stated any and all actions must consider the softwood lumber agreement and not be interpreted as interfering in market pricing. By closing Boat Harbour 10 years early this government has in fact interfered in market pricing. Please correct the negative impact that this government has had on the market pricing. Government has intervened on pulpwood pricing before and it had no impact on our exclusion from tariffs 6 years later.
Can you please share the analysis/discussions that your government has had with Emera/NSPI to date on the biomass boilers consuming product that was going to Northern Pulp? Emera/NSPI knows what price they can pay for the pulpwood WITHOUT impacting the ratepayer. We ask that the government find a suitable way to “top up” the price for our product to a point where it is viable. Government took action that dropped the price and eliminated the market for our products (and our pay cheques). We ask that government work to correct this immediately. It will still be less than Northern paid us, but it cannot be so low that it is not feasible. Northern Pulp paid to private wood producers on average $38/tonne plus trucking; $30 is feasible and acceptable. We will accept a reduction in our pay as a result of this governments decision which is absolutely no fault of ours, but we will compromise and accept it if a solution is put in place for us. Will this government meet us part way?
We are grateful for the swift assistance that your government and team have provided in the way of funding for roads and silviculture. This is a help and we appreciate it. However, recall my words to you in Hilden “if you fix the pulpwood problem with the boilers than 65-70% of this goes away”. If we can sell our pulpwood then under the Registry of Buyers program silviculture activities will have to take place to offset the use of that wood (business as usual) and you would not have to fund as much silviculture from the transition fund. Also, if we can get our pay cheques back than we can continue to operate in the woods and this includes building roads (without funding). You also would not need to assist contractors over the long term if we can keep them working. Do not misunderstand me here. We are grateful for the short term funding. We need it now and it does help BUT the longer term solution is the consumption, purchase and sale of the pulpwood we sold to Northern Pulp (400,000 tonnes). Focusing on an immediate solution to this issue will prevent having to solve a cascade of other issues and prevent further hardship and loss. HC Haynes operates in New Brunswick and Maine and we as a company have already taken steps to market whatever wood we can to other jurisdictions. It is too far to send all of the wood but we have been able to send a small amount to Maine to help the situation. We need a market in Nova Scotia and there is one if you want there to be. Let us work together and focus on prevention, we cannot always afford to be reactive to problems.
Private woodlot owners have also taken a pay cut on their sawlogs (25-35%) as a direct result of the government’s decision on December 20, 2019. We have not addressed it or asked government to intervene here because of the softwood lumber agreement. But we would like to point out that as a result of the Premier’s decision to close Boat Harbour 10 years early, the effect on private woodlot owners is in the neighborhood of a $42-$48 million loss in their stumpage payments (sawlogs and pulpwood) per year based on data collected by the Department of Lands and Forestry. This number only reflects the loss on the amount of timber that is harvested annually. It does not reflect the reduced value of the timber we own that is not harvested. That number is much larger and the analysis is being done to determine the total loss of value to private timber (it is over $2 billion). We are also not counting the truckers, loggers, etc. only what the landowners themselves have lost. What did we do to deserve that?
In his announcement on December 20, 2019 Premier McNeil read from a prepared statement that “In 2015 he made a commitment to clean up Boat Harbour and he is honoring that today, now I am making a commitment to the forest sector that government will be here for them in this transition and that commitment will be honored”. During the Natural Resources Committee meeting of February 5 2020 Minister Towers correctly stated that “maintaining the supply chain of private woodlot owners and contractors is vital and a top priority”. We are grateful Minister that you recognize our value and importance to the forest sector and we sincerely thank you for that acknowledgement. We have heard you loud and clear and look forward to suitable and meaningful actions that are taken by this government to address the issue of our 400,000 tonne pulpwood market being taken from us and consequently our jobs and pay cheques.
Surely, this government must acknowledge some responsibility in correcting the harm that has been done to private wood producers as a result of the Premier’s decision to close Boat Harbour. If there is no immediate correction by government we will have to consider all our options. Please consider the solutions and the concerns of this letter. We look forward to seeing meaningful, significant action from the government on addressing the specific issue of our losses. It is our hope that the government will assist us and that we will not continue to become causalities. We are an innocent party that wants to continue working and living in rural Nova Scotia.
We thank you for your time and valuable consideration,
Stephen B. Cole
HC Haynes Inc.
HC Haynes Inc.