The forest industry faces some tough sledding with multiple challenges ahead

By Jim Stirling

British Columbia’s forest industry is well experienced in dealing with adversity. It has learned on the job—and by necessity.

All of that experience and more might be required for the forest industry to successfully navigate the next few months. Rarely have so many factors, circumstances and uncertainties been lined up to simultaneously impact forest industry activities in the province.

In no particular order—because they’re all important and potentially devastating in combination(s)—the continually warming climate characterized by its extremes is fundamental to the industry’s challenges. The mountain pine beetle epidemic in the B.C. Interior, expanding beetle populations in other species including spruce and Douglas fir, are continuing to erode the forest industry’s life blood at source.

The same is true of wildfires. B.C. has endured two successive devastating wildfire seasons, each with its own grim statistics of record setting. The situation cannot be characterized as a “new normal”. It’s simply unsustainable. The insects and the fires are impacting the present and mid-term timber supply essential to sustain the forest industry.

Damaged trees that are salvaged mean higher prices in the harvesting and processing stages—and less value in the marketplace.

Other ramifications of the changing climate world-wide like drought, floods, storms of unprecedented ferocity and volcanic activity are reflected in other ways. Skyrocketing disaster-related compensation paid to the provinces and territories in Canada and around the world, for example. It’s naïve to think the insurance industry impacts won’t filter down through governments and add to forest companies’ operating costs.

In August, the U.S. Department of Commerce postponed until November final determinations of its anti-dumping and countervailing duty allegations on the imports of softwood lumber from Canada. But the 6.87 per cent anti-dumping tariffs—which the U.S. alleges is the selling of softwood lumber below market value—have continued.

The U.S., Canada and Mexico have been preoccupied during the summer with the NAFTA re-negotiation circus. It resulted in the ratification of a new tripartite agreement including entrenchment of the existing dispute resolution mechanism. Good news there. Weather induced disasters in the U.S. might continue stimulating lumber prices beyond the historical fall construction slow down.

The B.C. forest industry is continuing to feel the effects of its ageing work force dilemma. Efforts to recruit and retain a workforce are priorities for most industries across North America and Europe. In B.C., the most urgent personnel requirements are in the bush with truck drivers and equipment operators. They have contributed to wood shortages and unscheduled mill shutdowns.

At the other end of the process, there are issues surrounding moving finished wood products to markets in timely fashion. It seems the forest industry has always had a love/hate relationship with the railways, the most efficient volume shipper for wood products. In central and northern B.C., CN is the rail carrier and it’s been the source of much frustration for lumber shippers in the last few months. Too much product sitting on sidings for too long to suit customers and producers. CN has also been taking stick about its capacity woes from its other customers like intermodal, grain, coal and crude oil. CN has said it’s expansion and investment in its rail infrastructure capacity in western Canada are bringing about service improvements.

The need for improved raw material access and wood products diversification becomes more pressing as B.C. accumulates increasing volumes of wood from fires, insect damage and logging debris that can’t economically be converted into commodity lumber products.

Good progress is being made, albeit gradually, on developing and marketing biofuels and other sophisticated, non-traditional uses for wood fibre. Improved utilization of wood residuals for in-mill heating and process control have become industry standards. And the wood pellet manufacturing sector has proved successful. But the future for using wood biomass for generating more electricity is unclear. BC Hydro is undergoing a period of comprehensive review to streamline its operations. Part of that includes the future of biomass electricity, including wood fibre supply and its costs from BC Hydro’s perspective.

The relationships between the B.C. government, the forest industry and indigenous governments is a further area of potential friction. It will likely remain so until an agreement can be reached on a workable and mutually acceptable form of consultation for land access.

Aboriginal consent for log harvesting on traditional territories may also be part of changing provincial policies being mulled within Premier John Horgan’s NDP government in B.C. The forest company licencees had the right under the previous Liberal government to transport logs inter-regionally to best suit their processing facilities. The Horgan government has talked about re-establishing an earlier NDP policy requiring logs be processed nearer their point of origin. The objective is to create more jobs and community benefits in the rural areas of the province.

In September, the Horgan government appointed John Allan as its deputy minister of Forests, Lands, Natural Resource Operations and Rural Development. Allan brings broad experience in the B.C. forest industry including stints heading up the Council of Forest Industries and the B.C. Forest Safety Council. He’s well versed in B.C.’s recent forest industry.

The key now is that Premier Horgan has the right man on the point with the appropriate team support. He’ll need that to help the provincial government assist the forest industry with its flexibility to move ahead as it deals with its range of impending challenges.

Logging and Sawmilling Journal
November 2018

On the Cover:
It can take loggers time to get used to a new location when they move their equipment—new terrain, different timber, and perhaps different weather conditions. But Swiss logger Beni Brunner had to get used to a whole new country and continent when he set up logging operations in the B.C. Interior with his Valentini remote control tower yarder. Read all about Brunner’s B.C. experiences beginning on page 10 of this issue. (Cover photo by Paul MacDonald)

The robots are coming—to home building
A forest industry advisor recently warned wood producers that the robots are coming to American home building.

Logging in B.C., Swiss style
Swiss logger Beni Brunner has set up a remote control tower yarder operation in the B.C. Interior, and the equipment is working well in some very challenging conditions.

Waste-not sawmill
B.C.’s Kyahwood Forest Products has a green waste-not approach to business: it uses trim ends for its feedstock, the plant’s residuals are used for manufacturing wood pellets, and some of the sawdust generated at Kyahwood is used to heat the mill.

Forest planning tools can generate big $ savings
Alberta’s Millar Western Forest Products says there is the potential to save millions of dollars in its woodland operations with new forest planning tools.

Hobby sawmill takes off
What started as a hobby sawmill operation for retired teachers June and Larry Scouten has grown into a successful business—and they can now point to hundreds of fences, decks and docks in Ontario that Scouten White Cedar has been part of creating.

New and Noted at Portland’s Timber Processing & Energy Expo
We take a look at what was New and Noted at the recent Timber Processing & Energy Expo (TP&EE) in Portland, Oregon.

The Edge
Included in this edition of The Edge, Canada’s leading publication on research in the forest industry, are stories from the Canadian Wood Fibre Centre and Alberta Innovates.

The Last Word
The forest industry faces some tough sledding with multiple challenges ahead, says Jim Stirling.

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