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B.C. forest industry ending 2019 in distress

Premier’s year-end interview looks ahead to 2020
B.C. Premier John Horgan meets with Interfor managers in Castlegar, April 2019. (Castlegar News)

Black Press legislature reporter Tom Fletcher sat down with Premier John Horgan to discuss the government’s 2019 record and his expectations for the coming year. One topic was the forest industry, which is dealing with a debilitating six-month strike on Vancouver Island and a wave of logging and sawmill shutdowns across the province. For the full interview, go to

TF: In the Interior, I understand the loss of timber from beetles and fires, but you have large companies shutting down operations in B.C. and investing in the U.S. and in some cases in Alberta.

JH: And Sweden.

TF: When you were opposition leader you talked about a “capital strike” against NDP governments. Is there political pressure being applied to you by these companies?

JH: I don’t think so. In the case of Canfor for example, it’s a publicly traded company and Jimmy Pattison said, look, forestry’s not a quarterly business. You’ve got analysts with publicly traded companies saying every quarter you’ve got to shave something off your bottom line. In forestry you’re looking at a long-term future. So to have someone of Jimmy Pattison’s calibre purchase the shares and take it private, I think is a signal to the industry that there is a long-term future.

[Canfor shareholders voted down Pattison’s purchase offer on Dec. 18. His company, Great Pacific Capital Corp., already owns 51 per cent of Canfor shares and it’s not yet clear if he will make a new offer in 2020.]

JH: I think that’s the opposite of a capital strike. Canfor’s got a long-term future, its head office is here, it’s now an international company, and I think that’s good news for everybody. I don’t believe this is about capital, it’s about trying to figure out what we do after the end of the beetle kill and two of the worst fire seasons in B.C. history. And the softwood lumber dispute continues to linger.

TF: Yes. We hear a lot that our stumpage formula can’t change because the U.S. industry will use that against Canada. But I’m told that Alberta manages to make monthly adjustments on their stumpage and there are no consequences that I’m aware of.

JH: Volumes are far greater here. There are adjustments to stumpage on the Coast and in the Interior. It happened in October, it’s going to happen again in January.

[Forests Minister Doug Donaldson announced Dec. 19 that the annual review of stumpage, the province’s tax on Crown land logs, will result in a reduction from $18.73 per cubic metre to $8.82 for existing B.C. coast cutting permits effective Jan. 1. The province’s new penalties on waste wood left behind are also being reduced.]

JH: I believe industry knows full well that we have to be very sensitive to how the U.S. interprets any action we take on our publicly owned land and the tenure operators who work on it.

The issues are not stumpage, the issues are supply and markets, and we’re working as hard as we can to fix all of those things at the same time.