B.C. forestry: Why is it short of timber?

Margareta Dovgal looks at the issue, and the impact on forestry communities. 


Last week, Canfor announced the closure of its sawmill at Bear Lake in northern B.C., with the loss of some 400 jobs. At the same time, Canfor shelved a planned investment to revive its pulp mill at Houston B.C., the closure of that facility had cost 330 jobs.

Now, sadly, you can add those lost jobs to the estimated loss of 10,000 jobs in 2023, largely as the result of a shrinking supply of timber.

These losses aren’t an isolated phenomenon, nor is it just one company. It is a widespread issue. It is a real hit, especially when those losses happen in small communities where there are fewer people, especially when these are among the most economically productive jobs that we have in the province of B.C.. 

The provincial government is putting the blame on commodity cycles. Forest products are a commodity, subject to changes in demand on a global level. We saw a huge spike, during COVID, of people renovating homes, building decks, to enjoy their outdoor spaces at their homes. 

And there has been a little decline in this demand.

But the industry says there is more to it than demand for lumber. Canfor’s CEO, Don Kayne, says: “This has got nothing to do with market conditions. It is about certainty of supply — economic supply.”

There is indeed a question of whether there is enough timber and residual fibre for the industry to use to keep the plants operational. 

The industry says nothing has had an impact on supply more than deferments and suspensions of harvesting introduced in recent years by the provincial government.

The forestry sector says B.C. has sufficient timber available for harvest, but the actual harvest level has declined dramatically. In 2023, it was 42% lower than the allowable cut  — a level not seen since the 1960s. (The allowable cut in any forest area in B.C.is determined by the chief forester and their experts.) 

So this is all about policy choices by the government. One can see harvesting shrinking in some areas to, for example, preserve old-growth forests. But instead of a realistic transition process, with steps worked out over time, we got a wonky plop into a dysfunctional situation that has real human costs. 

The health and vibrancy of our communities, large and small, should matter to everyone. But the latest news of job losses fuels fears of rural community decline in B.C. because of all the lost  opportunities in forestry, one of our foundational industries. And an industry that led many families to move to rural B.C. 

Do not look only at statistics on job losses. Think about what happens to a family when the main breadwinner loses their job. It really puts a strain on family's well-being. And it also means lost tax revenues for all levels of government. Then comes the relocation of talent away from communities that need it. 

So in an accumulative sense, the broader economic impact of the forestry industry's decline in B.C. is incredibly troubling. We rely on highly productive industries like forestry to pay the bills, literally and figuratively. It is part of why we have such a high standard of living relative to the rest of the world, and why we've had that for so many years.

When we chip away through policy decisions at the economic fundamentals, it makes businesses no longer viable; they have no alternative but to stop operating. 

And we are chipping away as a result at our collective well-being.

Back in January Premier David Eby appointed Langley MLA Andrew Mercier as minister of state for sustainable forestry innovation. Mercier’s official mandate letter from the premier spells out that there is a need to increase fibre supply, aimed at keeping people working and local operations running, while also mitigating wildfire risks and reducing climate emissions. 

The policy decisions have created positive opportunities, giving First Nations a chance and support to develop more capacity in forestry. Government policy proposed that First Nations work out how to manage relationships with forest companies.

Some nations were well and fully equipped to respond, especially those with experienced forestry and business operations, strong local representation and administrative capacity. Others, though, particularly small communities, have struggled to create the internal capacity to deal with industry.

Another key area here is innovation. Much of the infrastructure in B.C. exists to process old logs, very large logs, and the residuals that come from them. As the government pushes for more “value-added forestry” and more manufacturing, the transition to new infrastructure isn't simple, and is costly. At the end of the day, the private sector has to be the one that sees the point of making those investments so we can keep the industry going. 

Now, I do not think that where we are right now makes it inevitable that B.C. will kill this foundational forestry sector. I think that ideally, these decisions would have been averted in the first place. 

But now that we are here, we can still mitigate further damage to forestry by expecting our senior leaders in government to be accountable for the job losses, and the economic blow that they represent to our entire economy.

In another area of B.C.’s economy, we are seeing the opposite trendline in liquefied natural gas production as a major export project nears the finish line. LNG Canada at Kitimat is 

over 90% complete right now, and its sister project, the Coastal GasLink pipeline, is complete.

This is the single largest private-sector investment in Canadian history. It has put a lot of workers to work. It is part of a global industry that's rapidly growing; everyone in the world wants natural gas.

We in B.C. have vast reserves of natural gas and a well developed industry that produces it with some of the world's leading technologies. Many other parts of the world do not have that reliable clean supply of gas, they use coal for powering their economies. They need the energy. But they also need clean air to make progress on climate change.

So British Columbia's natural gas can be shipped as LNG to growing economies in Asia, and it can help the world transition away from coal. All of this can happen while advancing B.C.’s economy, putting workers to work, and opening the door to economic reconciliation with First Nations in a sizeable way

We are also uncommonly lucky in B.C. by having a tremendous amount of hydroelectric power. Not enough, it turns out, for our needs and for our ambitions. We are going to have to scale that up pretty rapidly. 

It was good to hear that B.C. Hydro’s Site C power dam will be online in time for Christmas — so we can all give Hydro a little applause as we plug in our Christmas lights.

But even when Site C comes online we will need more power. More of us are turning to electric cars, and the government is requiring more of us to do that. 

And the LNG sector, for one, means big new demands for electricity, for a potential Phase Two expansion of LNG Canada and for proposed projects such as Cedar LNG from the Haisla Nation and Ksi Lisims LNG from the Nisga’a Nation. The question is whether they can tap into B.C. Hydro’s power system, or will they have to burn some of their natural gas to power the liquefaction plants.

Hydro’s $36-billion plans include extending transmission to natural-gas processing plants and LNG facilities. Right now, B.C. Hydro has put out a call for supplies of clean electricity. Among other things, any such projects will have to include 25% equity positions for First Nations. 

We are heading towards a provincial election, on or before October 19. It is a good time for people — whether they live in a small town or large city — to ask the government and candidates from all parties  about such issues as forestry and power supplies. 

We certainly expect the government to be paying lots of attention to them, and making good decisions that support everyone's best outcomes.

Margareta Dovgal is Managing Director of Resource Works. Based in Vancouver, she holds a Master of Public Administration in Energy, Technology and Climate Policy from University College London. Beyond her regular advocacy on natural resources, environment, and economic policy, Margareta also leads our annual Indigenous Partnerships Success Showcase. She can be found on Twitter and LinkedIn.

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