Fresh cut lumber is pictured stacked at a mill along the Stave River in Maple Ridge, B.C. Thursday, April 25, 2019. THE CANADIAN PRESS/Jonathan Hayward

Fewer trees, higher costs blamed for devastating downturn in B.C. forestry

Some say the high cost of logs is the major cause of the industry’s decline in B.C.

High log prices and dwindling timber supply are driving the crisis in British Columbia’s forestry industry that has devastated communities and kneecapped the provincial economy, observers say.

Companies have announced shutdowns or curtailments in more than two dozen mills in the province, putting hundreds out of work and slashing economic growth predictions. Advocates are calling for urgent government action to stem the bleeding.

“Something needs to change immediately or these small communities that don’t have other employers are going to wither and die,” said Marty Gibbons, president of United Steelworkers Local 1-417, based in Kamloops, B.C.

The local represents hundreds of forestry workers who have lost jobs in Interior communities including Merritt, Clearwater, Vavenby and Clinton.

The largest driving factor is the province’s complex stumpage system that results in high fees, he said.

“These are private businesses. If they can’t turn a profit, there’s no reason for them to run. Right now, it’s not the markets that are the issue. It’s the cost of the logs,” he said.

Stumpage is a fee businesses pay when they harvest timber from Crown land. The B.C. government calculates stumpage annually, so the system is less responsive than in Alberta, where monthly adjustments are made, Gibbons said.

READ MORE: Big rally in northern B.C. draws attention to continuing lumber crisis

The Forests Ministry said stumpage fees are based on market demand and the current rates reflect the scarcity of timber supply that has resulted from the mountain pine beetle outbreak and been exacerbated by several severe fire seasons.

Intervention in the stumpage system would weaken the legal case in the appeals of the duties imposed by the United States on softwood lumber from Canada, the ministry said in a statement.

“It is well-known that any interference in B.C.’s market-based timber pricing system would lead to an increase in softwood lumber duties levied by the U.S.,” it said.

Most of B.C.’s forest land is publicly owned, so companies have long-term tenure rights and the government charges them stumpage to harvest trees. In contrast, most land in the U.S. is private and companies face costs associated with replanting.

“That’s what the stumpage fee is all about,” explained Ken Peacock, chief economist of the Business Council of B.C. “It tries to equate, if it was privately owned, what the cost would be to operate and manage and reforest the land.”

Peacock said the high cost of logs is the major cause of the industry’s decline in B.C. He also blamed the mountain pine beetle and record-breaking 2017 and 2018 fire seasons for decimating supply.

The policies of Premier John Horgan’s government are also breeding uncertainty, Peacock argued.

The government is developing a caribou habitat protection plan that the industry expects will further restrict access to northern timber, he said, and it’s promised to implement the United Nations Declaration on the Rights of Indigenous Peoples without explaining how companies are meant to fulfil its requirement of “free, prior and informed consent” from First Nations.

The NDP government has also introduced Bill 22, which would control tenure transfers. Currently, a company that is scaling back or shutting down a mill can transfer its tenure to one that is operating, but the government wants oversight over these transfers to protect the “public interest,” a term not defined in the legislation, Peacock said.

“The picture here in B.C. is we are a very high cost jurisdiction. It’s actually less costly to operate in Alberta and companies can make a profit milling lumber and producing two-by-fours in Alberta.”

On top of all that, market conditions in North America are softening, he noted.

READ MORE: ‘A real shame’: Kelowna MLA says factors behind Tolko mill closing should have been caught

Forestry is the no. 1 engine that drives B.C.’s economy with nearly $15 billion in annual exports, representing one-third of the province’s international merchandise exports and the largest segment by far, said Peacock.

The Business Council of B.C. just trimmed its 2019 economic forecast in part because of the forestry downturn, from 2.2 to 2 per cent growth, he said. The B.C. government also just cut its forecast to 1.7 per cent, citing mill closures in part.

The Forests Ministry said the challenges the province is facing have been in the making for many years and the previous Liberal government ignored them and failed to help the sector and communities adapt.

“We have laid out a process … to bring together industry, First Nations, labour and communities to address the challenges and build a sustainable sector to protect jobs.”

Opposition Liberal forestry critic John Rustad has blamed the current government’s policies for “killing the industry” and resulting in more layoffs and closures.

Laura Kane, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Stop checks, searches of Wet’suwet’en pipeline opposers unlawful: Watchdog

Wet’suwet’en hereditary chiefs, the B.C. Civil Liberties Association, Union of B.C. Indian Chiefs file complaint

Wet’suwet’en pipeline supporters speak up

“Protesters get one side of the story and they stand up with their fists in the air.”

Federal minister pledges to meet Wet’suwet’en chiefs in Smithers over natural gas pipeline

The Wet’suwet’en hereditary chiefs say they are visiting Mohawk territory

Lake Kathlyn school sold to Wet’suwet’en for new seat of government

The 11.64-acre property was listed in mid-January for an asking price of $1.1 million.

‘Kids saw this as their legacy’: SSS students speak against decision to remove painted ceiling tiles

As of Feb. 20 an online petition against the decision is currently at just under 1,250 signatures

Blair says RCMP have met Wet’suwet’en conditions, calls for end to blockades

The Wet’suwet’en’s hereditary chiefs oppose the Coastal GasLink project

Petition seeks to remove local police department from Lindsay Buziak murder case

American woman starts online petition in hopes of helping Buziak family

Health officials confirm sixth COVID-19 case in B.C.

Woman remains in isolation as Fraser Health officials investigate

Study says flu vaccine protected most people during unusual influenza season

Test-negative method was pioneered by the BC Centre for Disease Control in 2004

Saskatchewan and B.C. reach championship round at Scotties

British Columbia’s Corryn Brown locked up the last berth in Pool B

B.C. lawyer, professor look to piloting a mental-health court

In November, Nova Scotia’s mental-health court program marked 10 years of existence

COLUMN: Not an expert on First Nations government structures? Then maybe you should calm down

Consider your knowledge about First Nations governance structures before getting really, really mad

One dead in multi-vehicle collision involving logging truck on northern B.C. highway

DriveBC says highway expected to remain closed until 8 p.m.

B.C. teacher gets 15-year ban after lying about having sex with just-graduated student

Teacher had been dishonest with the B.C. Commissioner for Teacher Regulation

Most Read