Since announcements came in June that 100 Mile House’s Norbord OSB mill would close indefinitely, the outlook of the forest industry has seemed bleak for many residents of the South Cariboo.
In the time since then, West Fraser has also announced its intention to permanently close its lumber mill at the Chasm location near 70 Mile House, and has implemented shift reductions at its 100 Mile location. Those changes impact 176 employees at Chasm and around 34 employees in 100 Mile House.
In the back half of 2018, West Fraser began to announce production curtailments at many of its B.C. locations. Across the province, similar closures and curtailments have followed.
Tolko Industries Ltd. announced it would close the Quest Wood sawmill in Quesnel permanently back in May, while also making cuts to shifts in Kelowna. The Quesnel closure process will begin on Aug. 22 with close to 150 employees impacted. Then, on July 30, Kelowna’s Tolko operation announced it will shut down for nearly six weeks this summer.
In June, Canfor announced the closure of its Vavenby Sawmill, citing a slow market, high cost, and supply issues, which left 174 employees out of work.
Norbord’s June indefinite closure announcement for 100 Mile cited supply issues and will impact 160 local employees.
In mid-July, the town of Fort St. James actually declared a financial crisis after the closure and sale of its largest sawmill, Confifex Timber Inc. to Oregon-based Hampton Lumber. Additionally, after a shutdown that was intended to be temporary, Canfor suddenly closed its Mackenzie sawmill on July 19, citing an indefinite curtailment.
On a positive note, Canfor’s sawmill in Houston, which employs approximately 385 workers, reopened on Monday, July 29, after a four-week shutdown.
Steve Law is a local Registered Professional Forester (RPF) who lives in the community of 108 Mile but also serves as the General Manager of the Clinton and District Community Forest. Law is not of the opinion that forestry is dead, rather, he believes the industry will continue to exist, just perhaps on a smaller scale.
“Last year was a record year for everybody,” he explained. “We saw record purchase prices, but if you’ve been in the forest industry for a long time, you know what’s happening is classic. It’s a peak, then we drop down, then peak [again]. It’s bust or boom essentially. You get to [the] peak and then go down to the bottom and come back up; it’s very cyclical.”
The Village of Clinton’s Community Forest has held a working relationship with West Fraser’s Chasm sawmill, and in the wake of that closure, many have asked how the Community Forest will move forward.
Law said that wood from the Community Forest will still be put out on the open market, but may now be subject to greater shipping costs.
Law explained that the wood goes to bid, whether Law sends it to West Fraser, Tolko, or elsewhere. The bid goes to whoever is interested, and ultimately, whoever the most successful bidder is.
“The Chasm being the closest mill in proximity has ended up with the sawlog component certainly each and every time so far,” he added. “So now that the Chasm is [going to] shut down, the wood will still go to whoever is going to pay the most for it, essentially.”
The same practice is going to hold as it has in the past, said Law. Whoever comes up with the net dollars gets the bid. Law noted that trucking is very expensive, so “nothing will change there.”
“It’s unfortunate that the Chasm mill has closed down because, in the end, chances are it’s going to affect our profit margin because we’ll have to truck it to 100 Mile, or it could go to Lillooet… it just depends who pays the most money for it, considering the trucking.”
Law explained that the Community Forest is in fact responsible for the shipment of their lumber, and that’s not unheard of.
“Wood gets shipped all over the province. We were selling our pulpwood component, [it] would go to 100 Mile to Norbord and of course, now that option is not there either. So now we’re looking at other markets for the pulpwood.”
He said that market options are always open, and that the Community Forest’s mandate has always been to not only sell to the Chasm or West Fraser, but to engage in a competitive bid process to ensure the best price.
“That won’t change,” he said, “But of course, now I’ve been busy exploring every market I can find because now we have a pulpwood component that I’m gonna have to ship elsewhere. That’s the Norbord part of it.”
As far as the sawmill side of things, Law said the wood will just go somewhere else, besides the Chasm: “It will be further because of the proximity of the Chasm mill to our wood supply, but life goes on.”
As a forestry professional with 35 to 40 years in the business, Law said he has seen similar situations unfold in the province before.
“I’ve managed and sold wood for a long time,” he said. “Depending on what’s going on, we used to ship a lot of wood to Lillooet at one point because the peeler price was significant and was high enough that it outweighed the trucking differential to send it closer. Peelers were going to Lillooet from all over because they were willing to pay a premium for it. [That] depends upon a whole bunch of things: inventory, supply, profile.”
It really is an ever-changing market, Law confirmed, admitting that the Chasm closure has forced the Clinton Community Forest to consider new strategies, though.
“Chasm was a great fit [for us] because of its proximity, but now we’re constantly strategizing to find new markets and ensure that we continue to be profitable, just like any other business.”
“There’s no question [things are] going to move forward,” he added. “We’re still going to be able to give money [back] to the community.”
Despite the new challenges faced, Law remains optimistic about the future of the forest industry.
“Let’s face it. There are some people that will be seriously impacted by these shutdowns, there’s nothing we can do about that, but it will sort itself out. We’re always going to have an industry, it will probably look a little different, a little smaller scale, but it’s going to be around.”