Employees at the Tolko lumber mill in Kelowna were supposed to be returning to work this Monday, following a six-week shutdown.
Instead, the 127 workers found out Thursday operations would be on hold indefinitely.
In a news release, company vice president of solid wood Troy Connolly said the decision was not an easy one, but “with lumber market prices at sustained low levels and high log costs in B.C., the mill cannot be cost-competitive.”
It’s the latest blow for the province’s forestry industry. On Wednesday, wood products company Teal Jones announced it’s curtailing harvesting operations in the Fraser Valley and on Vancouver Island, which will affect about 300 jobs. A news release from the company also blames weak lumber prices, and additionally cites high stumpage rates and harvesting costs affected by new regulations aimed at clearing out more waste fibre. The release stated: “These negative factors have made it impossible for the company to continue operating its forest licenses economically.”
On Sept. 3, Interfor revealed it would be permanently closing its Hammond sawmill in Maple Ridge before the end of the year. About 140 jobs will be affected. In a press release, Interfor’s president and CEO Duncan Davies said: “The Coastal B.C. forest industry has faced significant log supply challenges over the past two decades and manufacturing capacity needs to be brought into line with available log supply.”
David Elstone, of the Truck Loggers Association, told CTV News Vancouver unless something changes, he expects “further pain to occur,” with more curtailments and eventually news of contractors going out of business and leaving the industry.
“We are in a major crisis. Almost on a daily basis now, we’re getting announcements by the major sawmilling companies in this province,” Elstone said, adding he wants the province to start working on building a more “resilient” industry.
“I think a crisis creates opportunity. There’s lots that can be done,” Elstone said.
Forests minister Doug Donaldson said the affected workers are the first priority for the province, in terms of helping them find jobs and offering retraining.
“Overall, if you count the number of workers who’ve been touched by this, either temporarily, indefinitely, or full closures, it’s been approximately 6,000,” Donaldson said, adding that’s the number affected since about May of this year.
Donaldson said low lumber prices triggered by weakened housing starts in the U.S. are a big factor, and in the long term, diversifying the industry is key.
“We have to expand the manufacturing, value-added sector, and there’s many entrepreneurs who are already doing that,” Donaldson said.
“If this had been addressed by the previous government, who knew these mills were going to be closing, then we’d be a little bit further ahead,” the minister added.
Liberal forests critic John Rustad said he believes the industry needs help becoming more competitive, including reducing operating costs.
“You can’t have value-added if you don’t have anything to add value to. You need to have the primary industry and you need it to be healthy, and so far this government’s completely ignored it,” Rustad said.
He said one step the province could take immediately is to follow Alberta’s example and go to a monthly adjustment for stumpage fees, rather than adjusting them on an annual basis.
“It’s not about an artificial adjustment, it’s about having a monthly adjustment that more reflects what our current market conditions are,” Rustad said. “Alberta’s not taking downtime, Ontario’s not taking downtime. British Columbia is being hammered.”
Donaldson said B.C. has a “very rigorous, well-established, well-defined stumpage system”, and added changing it at this point would risk losing in U.S. courts on the issue of tariffs.
