December 10, 2018 6:35 pm
Updated: December 10, 2018 6:44 pm

New Brunswick Court of Appeals upholds Forest Products Commission ruling

WATCH: The New Brunswick Court of Appeals is clarifying how wood can be sold. The court is siding with the region's largest Forestry products company – J.D. Irving Limited – in its interpretation of how woodlot marketing boards can operate. As Silas Brown reports, the decision could have big implications for the future of the boards.


Two words will determine the future of the woodlot marketing board system in New Brunswick: “to” and “through.”

“The processors have taken the view that ‘through’ means that you can go directly to private wood producers and make a contract directly with them and then just tell the board about it and remit your levies,” said Bill Richards, chairman of the Southern New Brunswick marketing board.

“We don’t think that is the intent of the Natural Products Act.”

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On Thursday, the New Brunswick Court of Appeals upheld a 2017 ruling from the Forest Products Commission that struck down an order from the SNB, requiring all wood to be sold to the board by producers and then sold to processors.

Marketing Order No. 2015-604 came into effect on Jan 1, 2016, declaring that “all persons producing the regulated product shall sell the regulated product to the Board,” and “all persons are prohibited from buying the regulated product other than from the Board.”

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Richards says that this was the original intention of the system when it was introduced almost 40 years ago.

“The intent would be to be able to do the negotiations on behalf of the collective of private woodlot owners and have [processors and producers] go through, rather than around the marketing board,” he said.

“It still remains a matter of dispute as to whether the marketing boards can exercise the control given to them by the legislation or whether a loose interpretation of that would be buyers can circumvent the marketing board.”

The 2017 decision disagreed with the SNB’s interpretation.

The order was found to be “improperly worded and did not reflect the intent of the [Natural Products Act],” and that the SNB exceeded its legislative authority.

The authority of the board, as per the court of appeals decision, is “to require any person who produces the regulated product to offer to sell and to sell the regulated product to or through the Board.”

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J.D. Irving, one of the respondents of the decision, stopped buying wood through the board in 2012 and began negotiating individual contracts with private woodlot owners.

Jason Limongelli, vice-president of woodlands for J.D. Irving, says the company needs to be able to deal directly with buyers to ensure it receives enough product to fuel operations.

“It is important to note here that the marketing boards do not, in fact, control the volume of timber harvested from private woodlots and it’s important for our supply chain at J.D.I. and the greater New Brunswick forest products supply chain to have a secure source of supply,” Limongelli said.

“We need to be sure that the wood is going to come in on time for the agreed-upon price, and the best way to ensure that is to deal directly with those who control the wood supply and the trees.”

Limongelli added that the decision, in this case, does not dispute the marketing board’s regulatory position, only how that power is wielded.

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“This is not a question of whether or not the marketing boards have the authority to regulate the private wood market,” he said. “This is a question of how they do it, and in this particular case it was found they did not do it in the appropriate manner.”

“In this particular case, the court ruled that the Southern New Brunswick marketing board was operating outside of its legislative authority and this ruling really brought them back in.”

Richards says the SNB needs time to review the decision with their legal counsel, but the goal of the board remains the same.

“The marketing boards do other things to other than just marketing. We’re also responsible for the conservation and preservation and planning for sustainable woodlots,” Richards said.

“Should we be content with just monitoring what’s going on and reporting? I don’t think that’s really the intention of the Natural Products Act. So we will be looking at ways that we can effectively regain that control of the marketing of private wood.”

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