New Brunswick goes quiet on whether forest companies really face $50M royalty hike

The New Brunswick government says forestry companies will pay "tens of millions of dollars" more in timber royalties this year than last year, but it appears to have backed away from a widely circulated claim in July that extra revenue for the province could reach $50 million 

What caused the shift is not entirely clear, and so far provincial officials are not answering questions about it.

In a letter released last week criticizing a CBC News story that showed royalty rates on softwood pulpwood are being lowered by the province, Natural Resources and Energy Development Minister Mike Holland said most types of wood taken from provincially owned forests carry higher prices than last year, and forestry companies are paying more.

"Let me be clear, this new fee structure will result in tens of millions of dollars in additional revenue for the province of New Brunswick," says the three-page open letter signed by Holland and released publicly last Friday. 

"Total timber royalties could top $100 million."

That's a subtle but potentially significant revision of earlier estimates that the province would receive $50 million this year from increasing royalty rates.

According to government budget documents, "forest royalties" for the current year were originally projected to reach $68.1 million prior to the change in royalty rates. 

Reaching $100 million instead would require $32 million in additional royalty revenue, not $50 million, and in Holland's new letter hitting that lower target is only phrased as something that "could" happen.

Questions to Holland's department about whether the original estimate of companies paying $50 million more for Crown wood this year is still valid or has been revised downward have gone unanswered since last week.   

Additional questions about whether the original estimate might have been a miscalculation or misstatement or whether royalty rates were ultimately set lower than first planned have also received no response.

In early July, Holland gave multiple interviews to New Brunswick media outlets to announce royalty rates were increasing by $50 million this year.   

According to Holland at the time, average royalty rates for companies taking wood from provincially owned forests would be climbing $10 per cubic metre. Multiplied over the five million cubic metres or more companies take for mills each year in New Brunswick, he put the expected revenue increase at $50 million.

"We've instigated an increase for this year, a fairly significant increase," Holland told CBC News. "It could project up to $50 million worth of additional revenue to the province for this fiscal year."

Similar stories appeared in other media outlets in the province, all mentioning the $50 million figure.