Taking on the tough challenges at COFI convention

The upcoming Council of Forest Industries (COFI) convention in April will be looking at the challenges now facing the industry, including how to get a new softwood lumber deal with the U.S.—but these challenges are being tackled by an industry that’s resilient, creative and successful, says COFI President and CEO Susan Yurkovich.

By Jim Stirling

The Council of Forest Industries (COFI) Convention is being held for the first time in Vancouver, at the signature Vancouver Convention Centre West April 5-7. The venue delivers a message. The interior of the harbourside convention centre is characterized by the innovative use and visual appeal of wood products. The green surroundings will provide a timely backdrop to a packed business agenda for hundreds of forest industry executives, politicians and suppliers from around North America and beyond.

“Our conventions usually alternate between Kelowna and Prince George,” outlines Susan Yurkovich, president and CEO of COFI. “This is a good opportunity to showcase our industry in Vancouver, which is a forestry-dependent community, too.” Many of the 145,000 direct and indirect forest industry jobs in B.C. are in the province’s heavily populated southwest.

The 2017 COFI convention theme is “Forestry for the Planet. Forest Products for the World.” The theme helps underline the renewable nature of wood and its suitability for a more green-conscious design choice for building construction.

The theme also reinforces the fact B.C. wood products are increasingly sold around the world. Some of the panel sessions will focus on innovative wood building systems and particularly their suitability for applications in Asia, along with wood product use in hybrid buildings and tall wood structures. The recently completed 18-storey student residence building at the nearby University of British Columbia provides a stunning example of wood’s versatility and function potentials. As the world hears more daunting examples daily about the multiple effects of a warming climate, the inherent advantages of wood as a carbon retainer have become more apparent. Increasing numbers of building owners are becoming more aware and looking at climate friendly building options, notes Yurkovich. Work continues to get the new concepts incorporated into more building codes, she adds.

The policies of U.S. President Donald Trump continue to dominate the headlines, especially regarding trade. Just how Canada, and Canadian lumber producers, will fare under the new U.S. administration remains to be seen, and is creating uncertainty in the forest industry.

Factors influencing the trade file for B.C.’s wood product manufacturers will occupy a high profile during the COFI Convention. It’s anticipated that both federal and provincial ministers will provide a perspective on trade issues and other challenges and opportunities facing the industry.

Yurkovich says company CEOs will be back for a panel discussion at the convention. But they won’t all be representing the forest industry.

Some will demonstrate how other industries and sectors have applied emerging technologies to assist them in achieving their long term business objectives. Emerging technologies and equipment will also be in visual evidence during the convention’s trade show component. At the corresponding 2016 event in Kelowna, more than 35 businesses and suppliers supporting the B.C. forest industry participated in the trade show.

The election of U.S. President Donald Trump has dominated the headlines and influenced the subtext since last November. The election implications for the forest industry and its dependent communities in B.C. and across Canada remain unknown. Everyone waits to see evidence if the Trump in power will be more pragmatic than the Trump on the campaign trail. The U.S. lumber coalition wasted little time after Trump’s election to file a petition alleging softwood lumber imports from Canada were harmful to the American forestry sector.

The B.C. Lumber Trade Council, of which Yurkovich is the president, was equally quick to answer the U.S. lumber lobby’s petition. “While we are not surprised by the filing of the petitions by the U.S. lumber lobby, as they have long advocated for limiting Canadian access to the U.S. lumber market, we are disappointed that once again we are in litigation rather than working co-operatively with the U.S. industry to grow the market for wood products in North America,” responded Yurkovich. “The claims levelled by the U.S. lumber lobby are based on unsubstantiated arguments. Similar claims were made in the prior round of trade litigation and were ultimately rejected by independent NAFTA panels which concluded that Canadian lumber was not subsidized and did not cause injury to the U.S. industry. With respect to this new action, we are fully prepared to defend our industry and are confident we will again prevail.”

The B.C. Lumber Trade Council’s response reiterated a preference for negotiating a new trade agreement between the two countries. The trade council also noted the U.S. lumber industry alone cannot meet the demand of its domestic customers and that trade action will simply drive up the price of lumber for U.S. consumers.

Yurkovich told Logging and Sawmilling Journal that discussions with the U.S. on the trade issue are continuing. “We are fully prepared for this legal battle,” she adds. “But it’s not our preferred approach. We continue to press for a managed lumber trade environment between our two countries.”

Ironically, events are unfolding at a time when the U.S. housing market is ticking upward, says Yurkovich.

The COFI CEO recently participated in a B.C. government-led trade mission to China and Japan. It’s true that growth has slowed in China but the country is still predicting a robust six per cent expansion in 2017, she notes. China’s lumber demand was concentrated in lower grade products during its years of annual double digit growth. B.C. sawmills could supply large quantities of timber that was killed by the mountain pine beetle available. Now, says Yurkovich, the Chinese lumber buyers are looking more to higher value timber. She cites its use in the building of new resorts and hotels as examples. Work continues, with the industry talking to customers, builders and designers to specify the increased use of wood products.

Yurkovich says Japan represents a relatively stable market for B.C. lumber producers. But what’s showing up more there is interest in building systems using Cross Laminated Timber and taller wood structures. The ASEAN markets may also produce opportunity as Chinese labour costs rise, she points out. “As well, we’re dipping our toe into the Indian market, trying to understand it and the types of wood product shipments we might supply.”

Back in B.C., the forest industry is continuing its adaptation to the post-mountain pine beetle infestation era. “After an uplift in cut for salvage purposes we’re now, after more than a decade, returning to pre-uplift or below cut levels in some areas. And that will have impacts,” she affirms. It’s about accommodating the new normal. “We want mills that are stable and not chasing too little fibre.”

Despite the raft of uncertainties facing B.C.’s forest industry right now, Yurkovich is not anticipating a sombre mood to the COFI convention. On the contrary.

“This is an industry full of great people with a positive roll-up-your-sleeves attitude. This is not the first time this industry has faced hardships and it won’t be the last,” she declares. “This is an industry that’s resilient, creative and successful and that’s evidenced within our mills and our markets.”

For further information and registration details for COFI’s 2017 convention consult www.cofi.org.