AID PACKAGE FOR B.C. FOREST INDUSTRY:
a little late, and a little light?

The B.C. government has announced a $69 million aid package to forest
industry workers and communities that have been affected by mill closures and curtailments—but some critics say it’s late in coming, and does not go far enough.

By Jim Stirling

Forestry dependent communities and their residents in the British Columbia Interior have been thrown a welcome life raft by the provincial government.

The NDP’s $69 million aid package is intended to help laid off forest workers weather the hardships caused by a rapid succession of sawmill closures, shift reductions and production curtailments.

From the beginning of 2019 to mid-September, there have been four permanent mill closures; and 13 categorized as indefinite and dozens of temporary shutdowns. Some production curtailments have been extended further. The affected number of workers is estimated to exceed 3,000 by the provincial government but when all the indirect numbers of people impacted are included, the total is much higher.

The aid package was announced by B.C. Forests Minister Doug Donaldson in September, in Prince George.

The largest single item was $40 million spread across two years to sustain an early retirement bridging program with the cost shared with prospective employers. Workers have to be 55 years and older to be eligible and those in that age category working in other mills may also qualify for the program.

The next largest allocation in the aid package is $15 million for a new short term employment program. It’s designed to support initiatives which are more than work projects. They include wildfire mitigation and forest resiliency programs in the interior communities affected by mill closures.

A further $2 million is to go toward establishing a job placement coordination centre. The government will also offer short term community support programs in locations that have permanently lost a sawmill as a major employer. That part of the package means Quesnel, Chasm (southern Cariboo region), Vavenby and Fort St. James will each receive $100,000 to support community programs. Communities with indefinite mill closures are eligible for $75,000 each.

The federal government has been urged to join the province in supporting laid off forest workers in B.C. The importance of action will continue to be pressed upon the newly elected government in Ottawa.

The timing of the B.C. aid package was politically astute coming as it did prior to the Union of B.C. Municipalities annual convention. The provincial government was scheduled for an earful from the delegates if had it not acted. As it was, there were criticisms that the aid package was too late in coming and didn’t go far enough. Some observers expected the package to address the politically charged issue of stumpage rate changes.

Forest companies are still facing the same basic issues they were months ago with wood fibre shortages, high operating costs and wood product market challenges. The mountain pine beetle epidemic and the disastrous forest fire seasons of 2017 and 2018 brought the costs and fibre shortage issues to a head. The Logging and Sawmilling Journal took a closer look at the impacts of mill closures and production curtailments in the forest dependent communities of Mackenzie and Fort St. James in north central B.C.

The B.C. government’s $69 million aid package is intended to help laid off forest workers weather the hardships caused by a rapid succession of sawmill closures, shift reductions and production curtailments.

The bad news for Mackenzie started in July. The rumour mill in town had been working overtime for a while before the news became official that Canfor Corp was placing its Mackenzie sawmill on “indefinite curtailment”. Then Conifex Timber Inc., the other major sawmill in town, placed its mill on temporary curtailment.

With the raw material tap turned off, East Fraser Fibre Co Ltd’s Parallel 55 value added finger joint plant in Mackenzie was soon idled. About 400 people were directly affected by the closures in the town of about 3,500 people.

It didn’t take long for the mill layoffs to affect the local business community. A Mackenzie Matters rally was organized to alert the two senior levels of government to Mackenzie’s plight. Hundreds attended the rally even as loaded logging trucks rumbled south from town taking logs from the forests around Mackenzie to distant sawmills.

“I just get frustrated watching the logging trucks drive out of our community,” said Kim Guthrie, a rally organizer echoing a frequently expressed sentiment. “Something’s got to de done. We can’t just sit back and watch our community go down the tubes.”

The United Steelworkers, the union representing workers in the forest industry, is one group on record urging the restoration of the appurtenancy rule. It calls for harvested timber to be processed close to its community of origin.

But Mackenzie did receive other some good news prior to the provincial government’s announcement of its aid package for laid off forest workers. “Conifex and East Fraser cooperated with each other to help source a wood supply so Conifex could start operating again,” said Joan Atkinson, Mackenzie’s mayor. The Conifex mill re-started production September 3 on a five-day work week. It was down to four days a week prior to the closure. Parallel 55 had its raw material stream restored which in turn helped boost the wood chip supply for Mackenzie’s pulp mill.

Mayor Atkinson noted that Mackenzie doesn’t have the fibre supply issues like other B.C. Interior communities. The mountain pine beetle epidemic didn’t have the same impact around Mackenzie as further south in the Interior.

Canfor is reportedly helping its laid off workers. Some people have found work at Centerra Gold (Mt. Milligan), a producing copper/gold mine northwest of Mackenzie. “We’re not back to normal here but we are better off than we were a few weeks earlier,” said Atkinson.

But other issues are on the horizon to potentially affect the sustainability of Mackenzie’s forest industry. For example, the warming climate is lowering the level of water entering Williston Lake, the reservoir adjacent to Mackenzie. The worst-case scenario for the forest industry is low water levels could affect the operating ability of the Paper Excellence pulp mill in Mackenzie.

In areas to the north and east of Mackenzie, efforts to improve the populations of central mountain caribou herds could have profound effects of regional natural resource industries. That includes coal and mineral mining, oil and gas as well as forestry. Caribou populations have been declining since the 1990s and the government is considering far-reaching restrictions on industry to preserve both high and low elevation caribou habitat. Protests persuaded the provincial government to initiate an interim moratorium on resource development pending further discussions with First Nations, industry and communities.

People throughout B.C., especially those living in small forest-dependent interior communities, are interested in seeing how the first test case for Bill 22 plays out. The Bill was enacted by the NDP government in May 2019 and obliges forest companies to obtain prior government approval and consider the public interest prior to the transferring of cutting rights. Canfor announced in June 2019 that it was closing its sawmill and planer complex in Vavenby, B.C. with a loss of 172 jobs. Canfor proposes selling its timber rights to Interfor Corp. Interfor would divert the fibre to its Adams Lake sawmill, east of Kamloops.

The government’s aid package for laid off forest workers was warmly received in Fort St. James.

“We’re thrilled. It’s just what Fort St. James needed,” exclaimed the district’s mayor, Bev Playfair. “The provincial government has been listening to us.”

Fort St. James, with its population of about 1600 people, has lost one of its two major sawmills with the permanent closure of the Conifex sawmill and planer directly affecting 226 people. In July, Mayor Playfair and Chief Alexander McKinnon of the Nak’azdli Whut’en First Nation signed a 30 day Declaration Financial Crisis. It was subsequently renewed for a second month. The declaration was a highly unusual measure for a small community to take.

There was a Plan B on the table in Fort St. James before the government’s aid package was announced. Hampton Lumber has proposed buying the Conifex Fort St. James quota for about $39 million and building a new, smaller mill on the Fort St. James site to process it. The timeline is estimated at two years and Mayor Playfair is hopeful the government aid package will assist the laid off Conifex workers to bridge the gap until the new mill is up and running.

Hampton Lumber is a long established, family-owned operation based in Portland, Oregon. It runs two sawmills in the Burns Lake area in partnerships with First Nations south of Fort St. James. Concerns have been raised in Fort St. James that wood from the Conifex sale was destined to sustain Hampton’s Burns Lake area mills. In September, Steve Zika, Hampton’s CEO, wrote an open letter to the community outlining the company’s intentions.

“While other companies may be reluctant to expand or enhance operations in British Columbia, we believe that a new sawmill in Fort St. James—sized for a secure future timber supply—will be competitive and sustainable,” said Zika. He added that Hampton has made partnerships with First Nations and “aggressively competed” to purchase wood over a large area to support its Burns Lake area mills. “While timber supply is a constant challenge for our Burns Lake mills, we would not be building a new sawmill in Fort St. James if we were planning to take the licence wood to Burns Lake,” he explained.

The new Fort St. James mill design will be predicated on the established secure long term timber supply, he added. Zika confirmed the estimated two-year time span between finalizing the deal with Conifex, building the new Fort St. James mill and on legalities like government reviews and licence approval transfer.