Prime Minister Stephen Harper announced a new northern hardwood research institute at the Edmundston campus of the University of Moncton on Friday.
Harper said resulting research from the institute will help the industry recover from poor markets for softwood lumber and newsprint.
"You know, as they say, money doesn't grow on trees, but trees can create prosperity," Harper said .
"We think it is yet another opportunity to identify possibilities for the growth of this industry in this region. We hope to do practical research here that will result in opportunities to make the industry more profitable and employ more people."
"We are proud to be supporting the creation of the Hardwood Research Institute which will generate research and teaching jobs here in New Brunswick while also enhancing the competitiveness of Canada’s forestry industry," Harper said in a statement.
Harper was joined by Madawaska-Restigouche Conservative MP Bernard Valcourt, who is the minister of state for the Atlantic Canada Opportunities Agency and the minister responsible for la Francophonie.
Premier David Alward was also on hand for the announcement. He said the institute is in-line with his government's economic development plans.
“It"s applicable research so when we look at silviculture and what we can do to improve the quality of hardwood stands, when we look at things like developing better processes, when we look at developing and diversifying markets... The announcements today really helped the Hardwood sector in our province move forward," Alward said.
The total project will cost $4.2 million.
The Atlantic Canada Opportunities Agency is investing $1.5 million into the institute over the next five years.
The provincial government will invest $1.5 million and the University of Moncton will also contribute $528,858.
As well, J.D. Irving, AV Nackawic, Groupe Savoie and Acadian Timber will also invest $528,858 in total.
The new institute is intended to perform research that will create a more profitable and sustainable hardwood industry.
Harper told reporters on Friday the forest industry has been “under considerable challenges” that are primarily out of the control of the federal and provincial governments.
The prime minister said the reason the two levels of government have been able to convince industry players and the university to participate in the initiative is because "it is yet another opportunity to identify possibilities of growth for this industry."
President Jean-Claude Savoie of the Savoie Group, one of the institute's investors, said research into better ways to grow trees will help the lumber industry survive.
"We need to know how to have a better forest, a healthier forest, more quality trees, less pulpwood in the woods," Savoie said, "So an institute like this will steer us in the right direction.”
The institute will create seven full-time jobs and open up spots for seven graduate student research positions.