https://www.cbc.ca/news/canada/new-brunswick/province-reinstates-lumber-exemption-1.6016776
Province reinstates lumber exemption for small outbuildings, camps and barns
Use of certified lumber for those projects will no longer be required
· CBC News · Posted: May 06, 2021 4:46 PM AT
Justice and Public Safety Minister Ted Flemming announced the return of the lumber exemptions in a news release Thursday. (Submitted by the Government of New Brunswick)
The Higgs government is restoring a key exemption to building code regulations and delaying other changes, reversing a decision that had sparked angry reactions in rural New Brunswick.
Earlier this year, the province approved new regulations adopting the 2015 National Building Code of Canada but failed to renew an exemption for small secondary structures such as garages and barns.
That meant those structures suddenly had to be built with "stamped" wood from certified sawmills, which tends to be more expensive.
Small camps and lodges or sheds below 56.08 square metres, or 625 square feet, will again be exempt from the code, as will so-called "accessory buildings" like barns, the province said Thursday afternoon.
"I'm excited for sure," said James Rossignol of Bathurst, who told CBC News on Wednesday the requirement for stamped wood was causing headaches with his plans for a retirement "ranch" he wants to build in North Tetagouche.
"It's surprising that they actually made a change, so I guess they're at least listening."
The province will also retroactively create a transition period between the 2010 building code and the 2015 version, which took effect in February.
In a news release, Justice and Public Safety Minister Ted Flemming said some developers were concerned about "significant work" they'd done planning construction projects based on the 2010 code.
"We listened and are extending the grace period to provide industry with more time to adjust to the new building code," he said.
Now permits can be issued under both codes until the end of 2021, when the new code will take effect.
13 Commets
Maybe DNR will require Beavers to get permits to harvest trees on Crown Lands?
You'll have to get a permit to grow a garden and grow veggie that will need to be stamped.
New rules force people in LSDs to use certified wood for projects like sheds and barns
Projects were once exempt, allowing property owners to build using cheaper wood
The removal of exemptions to building code rules means rural residents have to use certified wood to build outbuildings. (Erik White/CBC )
James Rossignol had been planning to work on his rural retirement dream home for two years, until new provincial rules stopped him in his tracks.
The federal government employee living in Beresford had his parcel of land in an unincorporated area in North Tetagouche, the perfect spot for what he calls a little "ranch": a bungalow, a garage, a second "hobby garage" and a barn for four horses.
"My wife is a country girl and she was born and raised around horses," he says. "So she's really happy about moving out there. And we're going to have the horses with us …That's the plan. That's the dream."
Rossignol is a follow-the-rules guy, so he went to the Chaleur Regional Service Commission for his building permits, where staff gave the all-clear to the barn and the second garage.
"They told me right off the bat, 'Your secondary buildings are not a concern for us. You'll purchase a 25 dollar permit.' And he basically told me that I can build whatever we want."
That suddenly changed in February when the provincial cabinet approved new regulations to adopt the latest, 2015 version of the National Building Code of Canada, giving it the force of law.
James Rossignol had already purchased building permits for a garage and barn and ordered wood from a small sawmill when he discovered the province had changed the rules on the kind of wood he could use. (CBC/Zoom)
Rossignol had secured a supply of wood from a local sawmill, but was told by a building inspector that, with the regulatory change, he was no longer allowed to use it.
"He told me that, 'No, no, you can't do that anymore'," he recalled. "You have to use manufactured lumber or stamped lumber--that's the key word he used."
"Stamped" lumber comes from a certified sawmill, and it's the kind of wood that's long been required for houses and other buildings under various versions of the building code.
The province always had an exemption for small secondary structures, but the regulations adopting the new 2015 code did not renew the exemption, leaving Rossignol in the lurch.
He says wood from a local, uncertified sawmill is not only better quality, it's less expensive.
"I don't consider myself wealthy. You know, I'm part of the middle class like everybody else. Every dollar I make, I budget for it. And I budgeted this project on that information that was given to me. And now it's a complete different ballgame ..."
"I keep telling them, at the end of the day, this is a barn. It's not a house. I fully support the building code for my home and stuff like that, 100 per cent. But this is a barn."
Green MLA Kevin Arseneau says the new rules make no sense and he's been receiving many calls and emails about it.
"We're talking about sheds. I understand a commercial project, an industrial project, even a residential project," he said.
But the change will require people in rural areas, including some with low incomes, to buy more expensive wood for the most minor structures.
"This is taking a lot of autonomy away from people in the rural lifestyle."
Arseneau said he's been working on the issue for a month and still hasn't been given an explanation of why the exemption was eliminated.
"That the government is not explaining why is a major problem. If you have a reason, spit it out," he said.
Public Safety spokesperson Elaine Bell said Thursday the department has "heard concerns" about the changes from New Brunswickers but did not explain what motivated those changes.
She said the department is "listening carefully to see how their concerns might be addressed. We will have more to say in the coming days."
Michel Boudreau, owner of the Boudreau Sawmill in Nigadoo that sold Rossignol the unstamped wood for his project, said he believes the Higgs government is trying to steer wood purchases toward larger companies including Irving-owned sawmills and retailers.
"What are we doing to hurt them?" Boudreau said, "It's not bothering them."
Arseneau wouldn't endorse that theory but said he could understand why Boudreau would assume it.
"Prices are going up," he said, "Was government thinking a lot of people would turn to the unstamped market?"
"When you see who's profiting from soaring wood prices right now, you can't help but think that there's some lobbies that are very strong in New Brunswick and some lobbies that are not as strong."
Arseneau said he was told a month ago a fix was coming.
Rossignol says now he's worried that if the province drags its feet on fixing the rules, he'll fall through the cracks, forced to shift his plans and buy stamped wood as he gears up for construction this summer.
"It actually frustrates me even more," he said. "This is delaying everything I had planned for the past two years. So I'm caught in the middle."
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New Brunswick lumber companies quietly shattering income records
Salisbury sawmill owner flooded with calls for wood
Softwood logs are loaded for processing at the JD Irving Ltd sawmill in Chipman. The facility is one of New Brunswick's most important. (Submitted by Gerard Sirois/GNB)
Demand for lumber has been so high at Randy MacNichol's independent sawmill in Salisbury, N.B., he has difficulty taking time on the phone to answer questions about it.
"There is no stockpile of lumber in my yard," MacNichol said during a five-minute conversation about the daily parade of callers asking for wood.
"It hasn't slowed. I've had six beeps since you called me"
MacNichol sells lower-grade unstamped or milled lumber that's meant for smaller scale-projects.
Unrelenting demand
His operation is modest. But with unrelenting demand and record prices for wood across North America, all lumber production businesses, including his, are having a banner season.
"My guys in the woods are going to get a little bit more this year and old Randy is going to get a little bit more this year," he jokes.
MacNichol is open about the success he is having, but others in the province are not offering as much information.
Industry groups like Forest NB and New Brunswick Lumber Producers have said little about the change in fortune that has hit their industry, and last week did not respond to requests for comment about how well the province's mills are faring.
Randy MacNichol said demand for lumber 'hasn't slowed.' (Tori Weldon/CBC)
But after years of struggling with up-and-down markets and fighting U.S. duties and subsidy allegations, New Brunswick lumber companies are almost certainly shattering their own sales records and posting record profits.
One measure of that came in a Statistics Canada report last month that showed the value of treated and untreated lumber production in New Brunswick in January and February was $286.1 million, an unheard of figure.
The amount is not just a New Brunswick record, but $140 million more than the industry has ever made in those two months according to figures that extend back to 1992.
Runaway cost of softwood lumber
The windfall is almost entirely caused by the runaway cost of softwood lumber in North America that in February was trading on markets at average prices 169 per cent higher than in 2019.
Those prices then jumped higher again in March, and went higher still in April, with every working sawmill in the country earning record amounts on every board they can push out and get to market.
Wood chips are piled high at the J.D. Irving sawmill in Sussex in March. (Submitted by Ronnie Davis)
Last week, two of Canada's top-five lumber producers, Vancouver-based Canfor Corporation and Montreal's Resolute Forest Products, reported their own results for the first three months of 2021.
The companies, which had lost a combined $84 million on their lumber businesses during the first three months of 2020, made $828 million during the same 90 days this year, a sign of how dramatic the improvement has been.
Bank of Montreal analyst Mark Wilde marvelled at the volume of money, and on Canfor's earnings call questioned company CEO Don Kayne about whether an industry not used to such large profits was prepared to deal with the sudden riches.
"It's a lot of sailors hitting the town with a lot of money in their pockets, so silly things can happen," said Wilde.
Kayne said the company is still evaluating how to deal with its windfall. "We're taking a really cautious approach before we make any decisions at all."
Several provinces have increased royalty charges for logs being used by sawmills to match price increases in the lumber made from them, but not New Brunswick. Royalty rates set in 2015 are still in force. (Graham Thompson/CBC)
Other large Canadian lumber companies are scheduled to report earnings this week, but, in New Brunswick, most operations are privately held and do not report their results publicly.
JD Irving Ltd is Canada's fifth-largest lumber producer, according to a ranking released last week by Forest Economic Advisors. JD Irving Ltd did not respond to a request for comment on its recent sales experience.
Surge has lasted a year
Overall, New Brunswick ranks fifth among provinces as a wood products manufacturer, but on a per capita basis is close to the biggest, just ahead or behind British Columbia from one month to another.
New Brunswick lumber companies have experienced surges in product prices before, like brief spikes that occurred in the summer of 2018 and in the spring of 2002, but nothing as large or as long lasting as the current wave that is in now its 12th month.
Precisely how well individual New Brunswick companies are doing in the current market is unknown. (Sara Jabakhanji/CBC)
Companies like Canfor and Resolute have to pay rising royalties for timber they use in provinces like British Columbia, Alberta and Ontario as the price they get from lumber made from those trees goes up. But companies in New Brunswick are not facing the same rising expenses.
"Those (royalty) prices reflect local demand and supply factors," Nick Brown wrote on behalf of New Brunswick's Natural Resources and Energy Development Department last month, explaining why royalty charges for timber in the province are not growing to match record prices for wood products.
"Because overall stumpage supply has remained generally constant and overall mill capacity has not increased, there has not been a significant increase to the demand or the supply of stumpage locally."
Precisely how well individual New Brunswick companies are doing in the current market is unknown, but, according to MacNichol, it's a good time to be in the business of selling lumber.
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