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article imageB.C.'s forestry industry is shrinking, leaving economy at risk

By Karen Graham     Jul 23, 2019 in World
The B.C. lumber industry has its plate full — grappling with tough market conditions, a diminished domestic timber supply, U.S. softwood import tariffs and what many perceive as a lack of support from the provincial government.
The economic downturn in B.C.'s forestry industry has not just affected mill workers who have either been laid off or had their shifts cut, but also the forestry contractors, like those who drive logging trucks and independent timber harvesters who depend on the mills to make money.
In just the past few weeks, there have been four sawmills closed, and several have eliminated, or plan to eliminate, shifts at mills that are still operating. The forestry sector is mired in a variety of problems that have impacted on the economic growth and future reliability of the lumber industry to sustain itself.
According to Kamloops Matters, Jim Girvan, a forestry consultant is pretty good at making predictions. In 2010, he predicted 16 Interior lumber, veneer and plywood mills would shut down in B.C. by 2019, and he was right. In May this year, he predicted another 13 mills will have to go.
Tagging tape on trees at Golden Ears Provincial Park  British Columbia in 2016.
Tagging tape on trees at Golden Ears Provincial Park, British Columbia in 2016.
~riley (CC BY-SA 4.0)
With four mills already closed since May, let's hope this time he is wrong, however, the forestry sector is highly integrated, so there is the possibility of pulp mills and other processors that use wood waste from nearby sawmills also closing.
“That’s our next concern, is the next shoe has to drop,” said Bob Simpson, former BC NDP forestry critic and current mayor of Quesnel, which will suffer roughly 210 job losses as a result of mill closures. “As sawmills go down, then all the residual dependent businesses become much more vulnerable.”
David Elston, executive director of The Truck Loggers Association, which represents forestry contractors across the province, predicts the industry will take a 25 percent hit in the upcoming months which could lead to bankruptcies and more layoffs.
"The challenge is that there's the entire supply chain that feeds that sawmill and that's largely my membership, the logging contractor and their suppliers, that are working to maintain that supply chain when the sawmill does not need logs," said Elston.
Polus-Tec Pre-cut plant  on the outskirts of Tokyo imports wood from all over the world and is fully...
Polus-Tec Pre-cut plant, on the outskirts of Tokyo imports wood from all over the world and is fully automated in delivering "pre-cut" beams in Japan's post and beam housing sector. It represents a potential growth opportunity to use hemlock from B.C.'s coast. The plant was visited by delegates on the 2018 Forestry Asia Trade Mission. Japan is B.C.'s third largest market for B.C. wood products.
BC Council of Forest Industries
A high-wage economy that could fail
Lumber accounts for the largest component of the forestry sector, and it is a high-wage industry and has been the mainstay of many town's economies for a very long time. What makes this particularly worrisome is that in many cases, it is the only thing keeping the economy of these towns above water.
If you were to look at all segments of the forestry industry in B.C., you would find that all forestry activities combined account for billions of dollars of B.C.’s economic output (GDP), provide direct employment for more than 50,000 British Columbians and pay $4 billion a year in taxes, royalties and fees to various levels of government, according to the Coast Reporter.
This doesn't take into account the tens of thousands more people, like forestry contractors and the businesses dependent on the purchasing power of those in the forest sector. It is more likely to be seen as the so-called "domino effect," when one falls, the next goes down and so it goes.
Harmac Pacific Pulp Mill  Nanaimo  BC in August 2011.
Harmac Pacific Pulp Mill, Nanaimo, BC in August 2011.
David Stanley from Nanaimo, Canada (CC BY 2.0)
B.C. does have a diversified economy, but forestry still accounts for 30 to 35 percent of the earnings that B.C. garners from selling goods abroad. Quesnel was one of only a few communities that had the foresight to anticipate the current wave of mill closures.
Tolko's upcoming mill closure in Quesnel is a big hit to the Cariboo city with a population of 23,000. But the locals knew the closure was coming. "That sense of surprise still settles in because you don't want to believe it's going to happen, but as a [city] council, we said it's going to happen," said Mayor Simpson.
“I’m really struggling with mayors who are wringing their hands in public and going, ‘Oh my God, what do we do now?’” Simpson said. “In our case, we started on our transition strategy in 2014. Community plans should already have been in place for that transition.”
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