Description: Less than nothing? That was how the CBC described the situation where the government of New Brunswick seems to be paying forestry companies to harvest pulpwood on Crown lands in the province. The new government rate charges harvesters $3.40 per cubic metre of certain softwoods. But the government then pays the forestry companies $3.90 per cubic metre harvested for provision of management services on the Crown land.
Date: September 23, 2022
1) If you were a senior financial officer in the government of New Brunswick, what advice would you provide in this situation?
2) Why would a government be willing lose money on the harvest of these Crown assets? Is there anything similar in your home province?
3) On page 9-17 of Wiley’s Financial Accounting: Tools for Business Decision-Making tells us about the accounting for natural resources, like pulpwood. What term is used instead of “depreciation” when referring to natural resources?