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Government policies to blame for mill closures, say oppostion MLAs

"When you’ve got a government that’s outright hostile to the forest sector, this is what happens,” - Nechako Lakes MLA John Rustad
A loaded train moves lumber produced by Canfor from one of its northern BC mills.

John Rustad has already seen the one mill town in his Nechako Lakes riding lose its major employer this year when West Fraser Timber announced in January it will close Fraser Lake Sawmill.

Now people in Houston are wondering how long their sawmill will be open for business.

Canfor’s announcement on Thursday that it will hold off on a state-of-the-art reinvestment in Houston Sawmill and that the company intends to permanently shutter Polar Sawmill at Bear Lake and indefinitely curtail one of its pulp lines at Northwood Pulp and Timber has sent shockwaves through the region.

“It’s a devastating day for the workers and their families and the communities,” said Rustad, the BC Conservative Party leader. “I was down talking to the people at (the Council of Forest Industries conference) in Vancouver and the general sentiment is the amount of uncertainty and the cost structure in this province and the policies this government have put forward makes it almost impossible to try to operate in this province.

“Now we’re seeing that playing out with people losing their jobs and, quite frankly, it’s unconscionable how disastrous Eby and his NDP government have been towards the resource sector.”

The Northwood curtailment will result in an annual reduction of close to 300,000 tonnes of market kraft pulp. Canfor intends to continue operating both its Northwood pulp lines for next few weeks and the closure will take effect by the third quarter of 2024. The company will also keep its pulp line open at Intercon in Prince George.

Canfor has not said how long it intends to operate the mill in Houston.

“While the region has a substantive supply of sustainably grown timber, harvest levels are well below the Allowable Annual Cut partly due to natural disturbances, but increasingly because of the impact of a range of policy choices and regulatory complexity,” said Kevin Edgson, Canfor Pulp president and CEO.

“The persistent shortage of economic fibre, particularly in the Prince George region, has led to the closure or curtailment of a number of sawmills, which in turn has dramatically reduced the volume of chips available to meet the needs of our pulp operations. Despite exhaustive efforts, including expanding well beyond our traditional operating region, there is simply not enough residual fibre to supply the current production capacity of all our operations.”

The future of the three mills, combined with the closure of the mill in Fraser Lake and Canfor shutting down its Prince George Pulp and Paper pulp line last year, will have a profound effect on the local economy and has the potential to shatter the dreams of the affected families to remain rooted in the community, said BC United Prince George-Valemount MLA Shirley Bond.

“All I can do is think of the families who suddenly discovered they don’t have an income and they have no job and when you look at the cumulative total across northern B.C. the number is staggering, it’s over 700 jobs lost,” said Bond. “The calculation of the impact of the announcement also has to take into account all the other jobs that support the forest industry.

“Canfor made it clear in its announcement that one of the factors was the cumulative impact of policy decisions and regulatory complexity and that is devastating for workers in the forest industry and other resource sectors in our province. Clearly, the sector has been telling government that they need to deal with the issue of competitiveness, they need to find ways to look at the regulatory issues that are causing companies such distress.”

Bond says it’s clear to her the government, in formulating its forest policies, doesn’t consider the people most connected to the province’s resource-based economy live in rural areas, away from population centres in the Vancouver and Victoria which have the majority of provincial votes.

“It’s time for the government to recognize this is a big province and the very parts of the province that drive the economy in British Columbia are ignored,” Bond said. “Look what’s happening now, companies choosing to leave and workers paying the price for that.”

Rustad said over the past three years none of two million cubic metres of annual allowable cut in his Nechako Lakes riding has been made available to loggers through BC Timber Sales and he says the same thing is happening in Merritt, where harvesters trying to get access to trees killed by recent wildfires have had to wait two years to obtain permits.

“That’s one of the things that led to West Fraser saying we’re done with Fraser Lake Sawmill.,” said Rustad. “Companies can’t wait that long to make decisions.”

Another factor that’s changed the forest landscape is the cost of doing business. B.C. is the highest lumber cost producer in North America and Rustad says that’s scaring away investors.

“There’s no recognition by this government that their policies and approaches have driven up costs and made it very difficult to operate,” said Rustad. “Back in the ‘80s we (had the lowest cost structure) and we were one of the lowest in the early 2000s, but it has been steadily creeping up and it has gone up significantly in the last seven years with the NDP.”

New measures to protect old growth put in place in a year ago by the province are misguided, according to Rustad, and fail to take into account the growing conditions in northern BC forests.

“For us up here the old-growth mandate makes no sense at all, trees don’t live that long up here and the older they get the more susceptible they are to forest health issues like pine beetle or spruce beetle or other things,” said Rustad.

“What they’ve take out of (the available timber for harvesting) up here is our mid-term forest supply. It’s the wood we’re counting on to be able to bridge through the downfall we’ve had because of the pine beetle epidemic.

“So all of these policies have led to companies saying, ‘How on earth do we stay operating in British Columbia,’ and it’s a tragedy. I don’t want to see Canfor go, I don’t see these job losses. But when you’ve got a government that’s outright hostile to the forest sector, this is what happens.”