MRC in unfair competition with forest owners

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André Macron (TR. AB)

CAMPBELL’S BAY, April 30, 2014 – For its 54th annual meeting,     officials from the Pontiac Private Timber Producers Office (OPBP), representing 3,650 property owners, presented the organization’s budget and voted on important resolutions.

André Macron (TR. AB)

CAMPBELL’S BAY, April 30, 2014 – For its 54th annual meeting,     officials from the Pontiac Private Timber Producers Office (OPBP), representing 3,650 property owners, presented the organization’s budget and voted on important resolutions.
A balanced budget was presented. Despite a 10% decline in revenues, $2,659,108 was paid to private wood producers compared to $2,942,697 last year. Despite the major challenges the Board has faced this year, a $18,131 surplus has been generated. In addition to declining revenues being explained during the meeting, resolutions were passed to try to improve the economic    situation of the Pontiac’s private producers.
“Mills do not take our wood, they prefer to accept wood from public forests offered at very low prices,” said Nicolas Brodeur, a   private wood producer and former director of the Office. According to Michel Leonard, a current director, private producers have experienced difficulties in marketing their   timber because factories have closed their doors despite agreements. “The production capacity of the Pontiac is 356,780 m3 and we haven’t been able to deliver more than 92,121 m3 of wood,” he stated.
Roy Hérault, director of the OPBP for Litchfield supported Leonard’s claim. “The government sells public forests at low prices so it is impossible for us to compete. At these prices, the government doesn’t even make money.”
According to Hérault, the MRC Pontiac also   participates in this system of unfair competition. This year, the MRC sold wood from public, municipal woodlots without consulting the Board. In 2011, the MRC used the Board to market their wood and assumed, like all other producers, marketing fees for doing so, but they stopped doing this in 2013. While selling their wood for a much lower price due to reduced costs, the MRC gives industries a pretext for lowering the price paid for timber from private forests. The situation was brought to the Council of Mayors, but so far, no action has been initiated to address the problem.
Across Quebec, the situation is similar for all woodlot owners. In 2005, the income of the approximate 130,000 forest owners amounted to $356 million, but dropped to      $178 million in 2013, a 50% decrease.    
In 2007, the price per m3 was $35; today, it is only $27 per m3 while the price of fuel, equipment, labour and property taxes are increasing. For the entire province of Quebec, the forest industry produced 28 million m3, while the government provided 32 million m3 alone. The Quebec government is the largest competitor in the forestry market.
While an arbitration is currently in place between the Offices of Gatineau , Labelle, and the Pontiac and Resolu, “enough is enough” was the overall message of private wood producers at the meeting. A resolution was passed unanimously that the residuality principle        for public forests be respected.
 By law, timber from private forests are to be given priority over public forests when it comes to marketing.  According to Hérault, the MRC does “business” by entering into direct competition with private timber producers and taxpayers. Only 25% of timber from private forests are          currently      marketed.                       
In comparison, 80% of the capacity of intramunicipal forests managed by the MRC Pontiac is sold. However, the MRC did not have to invest in the    purchase of the land and doesn’t have to pay tax on these forests.
Another resolution was also adopted unanimously during the meeting to increase the guarantee fund payment to the Office from $100,000 to $300,000 by taking 25 cents more per tonne off wood marketing, already included in the fees. This fund is used to guarantee payment to producers when payment from the industry is uncertain.
According to Martin Boucher, the timber market changed; small plants have disappeared and those that remain  transform into large, increasingly powerful companies. Reducing competition results in a monopoly, which is certainly not advantageous for private wood producers.
In addition, the price of lumber has increased by 40% over the last year, the export market to the United States improved with the higher exchange rate of the Canadian dollar, and the plants are, at present, all profitable, while the timber harvested from private forests only allows forest owners to pay the equivalent of 30% of their property and school taxes.