Waiting for the smoke to clear in the B.C. Interior—and on softwood lumber

By Jim Stirling

It’s been a watershed spring and summer for the forest industry in the British Columbia Interior. Wildfires and their impacts dominated the headlines for weeks and continue to have thousands of residents living in a state of high alert.

Residents of Southern Interior communities from Princeton to Ashcroft and Cache Creek and up through the Cariboo to Clinton, 100 Mile House and Williams Lake—and many rural outposts in between—were forced from their homes, properties and jobs to await their fates in cities like Kamloops and Prince George. At least 71 homes had been reported lost.

It’s a moving target but in early August, the B.C. Wildfire Service said 860 fires had burned about 4,730 square miles of forest lands in B.C. since April 1. August is traditionally the hottest and driest month of the wildfire season.

Widespread and persistent smoke from the wildfires is a health concern for some and an additional problem for the thousands of firefighters and support staff trying to establish fires’ perimeters to better plot containment strategies. In early August, nearly 4,000 people were actively involved in the firefighting efforts, with locals joining trained expert personnel from across Canada and as far away as Mexico.

Suggestions are already circulating about how to mitigate a warming climate’s effects on forest fuels in the future. New B.C. Premier John Horgan has indicated basing a strategy on the Filmon report, prepared after the 2004 Kelowna forest fires. The report recommended making fire management considerations an integral part of the province’s land use planning processes.

The forest industry’s regional knowledge, manpower and equipment have proven invaluable allies on the fire lines. Logging crews and their equipment have cut or enlarged fire breaks around sawmills and around communities at risk.

In the Cariboo, West Fraser Timber and Tolko Industries were forced to suspend operations in July. West Fraser alone had about 1,000 people off work due to closure of its operations around its mills at Chasm—near 70 Mile House—and in 100 Mile House and Williams Lake. The sheer numbers and extreme volatility of many of the forest fires also interrupted rail freight service in the regions, power supplies and necessitated highway closures. Highway 97, the main route north, was closed to through traffic for a couple of weeks.

It’s too soon to ascertain the damage incurred by the fires on the forest resource itself. Clearly, significant volumes of timber have been lost to the region’s working forests. The timing could hardly be worse. The aftermath of the mountain pine beetle epidemic is already constraining available timber supply in many areas of the Interior. The situation may also hasten the possibility for more permanent sawmill closures and production curtailments in the Interior. Lumber prices to the U.S. jumped by about eight per cent, partly in response to the curtailment of lumber production in the Cariboo.

The political smoke (and mirrors) surrounding Canada’s access to the U.S. lumber market has, like the wildfires, ballooned this summer. The state of negotiations between the two countries on a new softwood lumber deal have been fertile ground for rumours and speculation. Persistent among them has been the desire to settle the lumber dispute before negotiations begin on re-assembling NAFTA. That exercise was scheduled to begin its first round August 16.

According to the most recent information, the two countries have agreed to a market share split in the range of the U.S. supplying 70 per cent of its domestic market and Canada 30 per cent. One of the reported hindrances was what happens when the U.S lumber market is robust, as it presently is. Should it be Canadian softwood producers which fill the gap above the 30 per cent basic line market share or should the gap be filled by offshore lumber manufacturers? It’s probably too simplistic to suggest allowing the dynamics of an unfettered market to function in such scenarios,

By the time this is read, two things should be clearer. If there’s a framework for a solid deal agreed to by Canada and the U.S., more details of how it’s crafted should be available. If there is no deal and the NAFTA talks proceed when planned, a softwood lumber agreement could be shuffled aside. But that latter scenario would also create an elephant in the NAFTA negotiating arena.

Chapter 19 is the name for the NAFTA’s dispute settlement process. The Americans would like it scrapped, or certainly considerably revised from its present form. Canada has found the Chapter 19 process very useful in the past softwood lumber disputes. Under Chapter 19, bi-national panels arbitrate the legitimacy of a country’s decision to impose duties or anti-dumping measures on imports and not the U.S. courts.

In discussions prior to the NAFTA re-negotiation process, Canada has made it clear an acceptable dispute settlement process should remain on the table. “As our ambassador said just last week to the Americans,” recalled Prime Minister Justin Trudeau in comments in late July, “a fair dispute resolution system is essential for any trade deal that Canada signs on to and we expect that that will continue to be the case in any re-negotiated NAFTA, that we will continue to have a fair dispute resolution system.”

Like the other issues swirling around the B.C. Interior forest industry this summer, it’s going to take time for the smoke to clear.

Logging and Sawmilling Journal
August/September 2017

On the Cover:
The Princeton, B.C. sawmill of Weyerhaeuser Canada has seen some major equipment upgrades in the last few years—but there is more to come, as the sawmill continues its efforts to make operations more efficient, and reduce costs. The two-line sawmill in the B.C. Interior turns out upwards of 300 million board feet of SPF lumber annually, and is undergoing a multi-year upgrade (Cover photo by Paul MacDonald).

Working to keep the risks of Climate Warming at bay
Warming climates up the risk of forest fires, and one community forest, in Burns Lake, B.C., is implementing a fire mitigation project that will help protect the town’s forest industry—and social assets.

Combo mill upgrade project
The Gilbert Smith Forest Products sawmill in Barriere, B.C. recently completed a lumber grading/sorting project that combines the lumber flow from the mill and planer through the same system, which required a good amount of ingenuity and resourcefulness since it involved combining new and used equipment.

Alberta forest industry update
Just in time for the Alberta Forest Products Association AGM in Jasper, Logging and Sawmilling Journal takes a look at what’s going on in the Alberta forest industry, and how the industry is dealing with the duties on lumber going to the industry’s #1 customer: the U.S.

Great equipment fit in the Gaspé
A new Ponsse ScorpionKing harvester is proving to be a great fit for brothers Jean François and Steve Lemieux, and their harvesting operation in Quebec’s Gaspé Region.

Mill Maintenance
Automatic lubrication is the best defense against mill downtime, say Roland Lorenz and David McDougall, of the Beka Group.

Major upgrade for Weyerhaeuser Princeton
Weyerhaeuser’s Princeton, B.C. sawmill is in the midst of a major upgrade that includes the front end of the mill and primary breakdown equipment.

Three important words in B.C. roadbuilding: diversify, diversify, diversify
B.C. roadbuilding outfit Black River Contracting does a fair amount of work for the forest industry, but company owner Kelly Sunderman finds it’s best to diversify their workload—and they may find themselves doing some work associated with the Kinder Morgan pipeline expansion, if it gets the go-ahead.

A Finnish focus in the forest
Ontario’s Shuniah Forest Products carries out logging the Finnish-Canadian family way, with a strong focus on their employees, teamwork—and their award-winning safety program.

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, Alberta Innovates and Alberta Agriculture.

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