SEEKING MORE BALANCED TIMBER ALLOCATION in the B.C. Interior

B.C.’s Interior Lumber Manufacturers’ Association is encouraging the provincial government to consider a more balanced approach to timber allocation, where commodity dimension lumber sawmills and value added wood product manufacturers each have access to the fibre flow they require to succeed.

Above: The Interior Lumber Manufacturers’ Association and the B.C. government are exploring mechanisms and incentives to manage a consistent fibre flow to support a more diversified allocation of the publicly owned forest resource.

By Jim Stirling

All trees are not created equal—but too often they’re being processed as if they were.

The Interior Lumber Manufacturers’ Association (ILMA) membership would like to see that situation change. The association is encouraging British Columbia’s Liberal government to consider altering the status quo in favour of a more balanced approach to timber allocation.

The association advocates a scenario with a mix of wood processing options, where commodity dimension lumber sawmills and value added wood product manufacturers each have access to the fibre flow they require to flourish.

The ILMA members recognize the complexity of the issue. Timber supply is under increasing pressure from insect infestation losses, wildfires and a variety of competing land uses. But the association argues that those factors alone are a persuasive reason to direct higher quality logs for processing into higher value products, rather than conversion to commodity lumber products. By doing so, twice the number of jobs are created per cubic metre of wood consumed.

The economic vibrancy of small communities in southeastern B.C.—where the association’s higher value operations are located—is protected in the process. The ILMA and the provincial government are exploring mechanisms and incentives to manage a consistent fibre flow to support a more diversified allocation of what is a publicly owned forest resource.

“We started about six months ago in talks with the assistant deputy (forests) minister and staff. At this point we’re cautiously optimistic,” reports Ken Kalesnikoff, chairman of the ILMA.

“We’re looking at pilot projects within the British Columbia Timber Sales program (BCTS),” he says. “We need to be creative working through the BCTS. We’ve asked for an economic benefit analysis of our sector and we’re working on the terms of reference for that.”

The ILMA is willing to discuss with government any method that might effect positive change for its membership. “No issue is off the table,” adds Kalesnikoff.

The ILMA has been hosting a series of informational meetings with local and regional governments to explain its message and help ensure the survival of its member mills. The association representative has met with mayors and councils and the regional districts in East Kootenay; Columbia-Shuswap; West Kootenay/Boundary and Central Kootenay. A meeting with the Thompson-Nicola Regional District had also been scheduled. The support is there, asserts Kalesnikoff. “More people are getting it. We can do more with less logs through the value added side of the business.”

Southeastern B.C. has a similar corporate concentration of fewer and larger forest company licencees as other parts of the B.C. Interior. As a result, timber supply and flow is controlled by a few large forest industry corporations. The ILMA, by contrast, is very much in a David and Goliath situation. “The ILMA has nine member companies—we recently lost one to a large licencee,” explains Kalesnikoff.

The association members are, typically, independent, family-owned, well-established and unconcerned about corner offices. They’ve survived the economic peaks and valleys physically reflective of their operating areas by being adaptable and versatile.”We’re a very diverse group,” continues Kalesnikoff. The ILMA membership includes pole manufacturing plants, veneer production facilities and sawmills and plants characterized by extracting the maximum value from each tree, rather than high value production.

Kalesnikoff Lumber is a good example. It’s a specialty lumber producer in the Kootenay wet belt that’s been under the same family management for four generations. The company has the flexibility within its plants to produce a plethora of products from different sized lumber to siding, panelling and specialty products for customers as far away as Japan.

The ILMA membership reflects a more European model of taking every piece of wood further up the value added chain.

Reinforcement of the ILMA’s call for more timber supply balance and diversity within B.C. Interior forest industry was received from an unexpected source. An independent Simon Fraser University (SFU) research team studied the Columbia-Kootenay area of the southern interior forest region and drew conclusions similar to the ILMA’s. They had no idea this paper had been produced, assures Kalesnikoff.

The SFU research team, based in Vancouver, published its report in 2013. It found that specialty mills operating in the study area were more resilient to economic downturns than commodity mills, as measured by operating days. The recession of 2007-9 was included in the study period.

The report’s authors credit the resilience of specialty mills to higher levels of flexibility, diversity and orientation. That in turn they attributed to four main characteristics within the specialty mills’ composition. First among these, according to the SFU analysis, was a willingness and ability to run their operations more flexibly and below their capacity during economic downturns. Secondly, specialty mills have the ability to produce a greater diversity of products, allowing the targeting of more and different markets. Specialty mills have the ability to produce higher valued products while supporting more than twice the number of jobs per cubic metre of wood consumed—and more than three times the jobs per million board feet of wood produced. Fourthly, the SFU research team found specialty mills have the ability to sort many grades in the bush. They have the opportunity to trade among themselves, ensuring each log ends up in the processing stream that can maximize its value and potential. In that way, regional specialty mills operate as an industry cluster.

The SFU research team concluded the combined advantages it found allowed the specialty mills to extract more value from the publicly owned timber base.

The SFU study findings echo key points the ILMA is making during its discussions with the forests ministry. “We’re seeking a solution that’s beneficial to everyone,” says Kalesnikoff “We’d like to help make the forest industry as a whole the economic driver of the province again.”

He says there’s a groundswell of support of the ILMA’s position that he hasn’t witnessed before in his 40-odd years working in the industry. “I really believe it’s our time and our story is solid. We need the balance and diversity that will truly add value to our forest resource.”