N.B. forestry may be poised for recovery

Posted March 10, 2009, at 8:42 p.m.

SAINT JOHN, New Brunswick — Ten years ago, there were 98 sawmills and pulp and paper mills operating in New Brunswick. Today about 20 are operating and many of those are on temporary shutdown or operating with reduced shifts.

In the past three years, exports of lumber from Atlantic Canada to the United States have decreased by about 70 percent.

The forestry industry employs 16,500 New Brunswickers today, but it has lost about 7,000 jobs in the last two years.

While the past few years have been particularly brutal for the province’s forestry industry, the president and CEO of an industry lobby group is optimistic about the future.

Mark Arsenault of the New Brunswick Forest Products Association told the Telegraph-Journal’s editorial board Monday that he expects the industry will emerge from the downturn even stronger than it was before.

The loss of several mills in the province, while devastating for the communities that were affected, should prove beneficial for those still standing when the sector rebounds, said Arsenault.

“We had a lot of sawmills that were very inefficient and closed down and it’s painful and there’s no way to soften the blow to a community where the mill shuts down — it’s a horrible event to have happen,” he said. “But other mills have been able to benefit from having a greater wood supply or taking in some of the workers, and I think it has made them a lot stronger.

“It certainly doesn’t make it easier for those communities that have lost mills, but at the same time, taking out some of that capacity, when we start seeing the economy turn around I think you’ll see the price of lumber and paper pick up because some of that capacity is gone, so the demand will go up quicker and that should help lead to a quicker recovery.”

Arsenault is optimistic the industry will begin to emerge from the downturn late this year or early next year.

“We thought that 2008 was going to be the turnaround year. All the forecasters were looking at 2008 as the year everything was going to improve,” he said. “There’s talk of housing starts turning around in late 2009. Experts are predicting late 2009 as the start of a turnaround.

“As difficult as these times are, our mills that are still standing have managed to survive through all these tough times and that’s going to put them in a very good place as we come out of this downturn. Even with all of this difficult period, we still managed to generate $2.8 billion of activity for the province. I think it’s something to be proud of.”

Arsenault said there are predictions the industry will bounce back strong. Some are even bold enough to say forestry could surpass its former contribution to the provincial economy.

“If you look at the long-term forecasts, the demand is going to be there, and as long as we’ve got the right systems in place, we’ll be able to compete and we’re very comfortable with that,” he said.

“It has been as high as $4 billion in the past and there are forecasts that if we do things right and we get a few things under control, it could go as high as $4.7 billion. With that potential in front of us, it’s important for us to believe that we can achieve it, we have the ability. We were there before and we can be there again.”

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