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MLA Rustad says P.G. could suffer $50 million impact from mill closure

Hard times in forestry sector creating uncertainty for future of B.C. mills
Canfor Pulp is permanently closing the pulp line at the Prince George Pulp and Paper Mill.

The permanent closure at the Canfor’s Prince George Pulp and Paper’s pulp line will put 300 mill employees out of work and those lost wages could take $30 million out of the local economy,

And that’s just the immediate impact.

Nechako Lakes MLA John Rustad says that for every job lost at the mill, local contractors, suppliers, retail stores and service providers will also feel the pinch once the mill closes in March.

“It’s obviously incredibly challenging and very difficult for the families and workers affected and it’s not just the direct jobs, the forest sector has a 2-to-1 ratio in the jobs that are going to be impacted in our community and that’s really tough for so many people,” said Rustad.

“You’re up around a $50 million impact at least in terms of the community. If these workers decide they want to leave town to find other work, they have spouses and families that may working in other fields, like health care, and people are going to be looking at leaving.”

Canfor Pulp pointed to the lack of cost-competitive fibre, a reduction in the annual allowable cut and a weak global market for pulp as the reasons for closing the pulp line at the Price George mill. Rustad says he doesn’t blame the company for its decision.

“If you carry on with the approach of not being able to make money eventually you get to place where you might be putting people’s pensions at risk,” said Rustad.

The former BC Liberal forests minster pointed to the current North American benchmark price of $450 US for 1,000 board feet of lumber as an example of how production costs have skyrocketed.

“Five years ago that would have been a record price and today, companies can’t make a go of it because of our cost structure,” Rustad said.

“Ever since the NDP’s mismanagement of the pine beetle problem in the ‘90s we knew we were going to end up with some fibre shortages. But the thing that is most challenging is to see the cost structure we have in place and the NDP compounding the problem by reducing the fibre availability.”

With fewer trees available, Rustad says pulp mills need to look to other sources of fibre such as wood waste left from logging operations or hemp, which has a rapid growth rate. Rustad said the Prince George mill could still be used as a biorefinery, converting wood waste to fuel and other marketable chemicals.

BC Liberal forestry critic Mike Bernier said many of the people affected by the closure did not see it coming. The former BC environment minister said what happened this week is happening at mills in other regions of the province and he’s worried for their futures. He pointed to 150-employee Aspen Planers mill in Merritt, which shut down in December and remains closed indefinitely.

“They’re saying, ‘We applied to the government to try  get access to timber so we can keep the mill open and we don’t even get a response back,’” said Bernier. “It’s a bit of a slap in the face to these companies who are really the lifeline that built this province.”

Bernier is encouraged Canfor is keeping its Intercon and Northwood pulp mills operating in Prince George because he knows how integral they are to the city’s economy and how devastating it is when a mill shuts down. He’s seen that already in his Peace River South riding with mill closures in Mackenzie and Taylor and the mine closure in Tumbler Ridge.

“It’s just hard times in the sector and we need to figure out how to change some policies and incentives to keep them here in B.C.,” said Bernier. “We have the highest cost jurisdiction in North America and when I talk to a lot of these large companies they’re saying it’s just very difficult to convince the board of directors to invest in British Columbia right now, let alone expand in any way.

“We’ve seen nothing to give any optimism to the forestry sector since the NDP took over and that uncertainty is what is making it difficult for these companies and we’re seeing that right around rural British Columbia right now. ”

In the wake of the PG Pulp closure, Prince George-Valemount MLA Shirley Bond says it’s critical for the province to find ways to help the 300 affected workers and their families transition into other jobs to keep them rooted in the community.

“In the immediate term, we need to take care of the employees who are losing their jobs to make sure they have all of the supports and resources they need,” Bond said

“Secondly, we need to then we have to have a conversation about what does the forest industry look like moving forward and how do we ensure that we have a thriving economy in Prince George in our region. The government needs to show some leadership to this part of British Columbia and those important conversations should have been taking place all along.

“We need to look at the issue of being competitive and what that means in terms of attracting investment. Competitiveness is an enormous issue and our forest sector is a high-cost producer and that is one of the challenges.”

In a  joint statement sent to the Citizen,  Forests Minister Bruce Ralston and Brenda Baily, Minister of Jobs, Economic Development and Innovation, assured the provincial government is doing what it can to help PG Pulp workers deal with losing their jobs .

“At a local level, ministry staff will work with the community during this period to share information and co-ordinate an in-community response to ensure supports are in place for both individuals and the community,” the statement reads.

“Government is also working collaboratively with the B.C. Pulp and Paper Coalition and has acted on many of its recommendations to improve fibre access for pulp mills. We have renewed funding for the Forest Enhancement Society of British Columbia, introduced the Coast Fibre Recovery Zone and put in place new timber pricing policies and waste penalties for fibre left in the bush.”

Cariboo-Prince George MP Todd Doherty, in an email to the Citizen, assured the affected mill workers will get federal government help as well.

“There is plenty of blame to go around, however, my primary concern is with the families impacted by these closures,” said Doherty. “I have reached out to the organization to inquire transition plans for affected employees and if there are opportunities for any integration for these employees into other Canfor or industry operations.”