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Forest industry health hinges on timber access guarantee for secondary manufacturers

Brink says investors will shy away from B.C.'s value-added companies unless access to trees is protected
In September 2019, John Brink announced a $1 million donation to the College of New Caledonia over the next 10 years. following up on his commitment to become an industry partner with CNC and develop the trades and technology centre.

John Brink has built three value-added forestry companies without having any direct access to the trees that have made his businesses thrive.

The wood products he and hundreds of employees produce at Brink Forest Products in Prince George, Vanderhoof Specialty Wood Products and Houston-based Pleasant Valley Remanufacturing are dependent on sawmills in the region which supply the Brink Group of Companies with the wood they use to make fingerjointed lumber and wood pellets for export to international destinations.

What once seemed like an endless supply of some of the finest lumber on earth has been devastated over the past two decades by pine beetle kill and forest fires which have severely reduced the available forest for harvesting, and that has forced forestry players and the provincial government to rethink forest management strategies.

In June 2021, the NDP government released its intentions paper, Modernizing Forest Policy in British Columbia, which outlined a plan to redistribute forest tenures to Indigenous Nations, forest communities and small operators. The government aims to double the amount of available forest tenure on public land for Indigenous people to 20 per cent over the next few years.

In addition to old-growth forest protection, the plan reinforces the government’s commitment to promote higher-value wood products like mass timber laminated products used for load-bearing columns, beams and panels. It wants new and innovative value-added products to reach new markets. That commitment to support value-added secondary wood manufacturers is music to Brink’s ears, but unless it guarantees companies like his access to fibre, the plan rings hollow.

“In order to attract capital to invest in  business like this you have to have reasonable expectation of access to fibre, I’m not asking for tenure, but at least access to fibre,” said Brink.

Timber access for secondary manufacturers was protected until the business forest enterprise program was eliminated in 2003 when Gordon Campbell’s Liberal government unveiled its Forestry Revitalization Plan. It also ended appurtenancy, a requirement for trees harvested in a region to be processed in that same region.

“I call it a social contract and how it all starts, in my opinion, is the timber in the province of British Columbia belongs to you and me, the people,” said Brink. “It’s a privilege to have access to timber and with that goes social obligations to give back to the community wherever possible, including manufacturing.

“Now, all those issues are in question. Industry, mainly the larger ones, have decided that they can be much more profitable elsewhere, so they’re not really investing in B.C. because they are not globally competitive here, but they still control all the timber.”

Unless that changes and secondary manufacturers are granted timber access, Brink says growth of those companies will be stifled until a fair deal can be negotiated with the government to secure their share of the wood pile.

“No matter what happens, at the end of the day the public will demand it,” he said. “They will not stand by and allow people to control all the forests and have no consideration for other potential investors that will create all the jobs.”

Brink Forest Products opened in 1975 on River Road (formerly known as Planer Road because it was a hub of planer mill activity). The company produces fingerjointed lumber using short pieces of kiln-dried wood bought from sawmills. At that time and up until about 2000, Brink estimates there were 50 secondary wood product manufacturers in northern B.C. There are now just three or four left.

Part of that is the consolidation of primary forest companies which left the province with five or six companies which now control 75 per cent timber available to B.C.’s forest industry.  The industry was especially hard hit by the pine beetle infestation from 1999-2015, which practically wiped out the region’s supply of lodgepole pine, and that was followed by two severe wildfire seasons in 2017 and 2018, which burned seven per cent of the province’s entire forest supply.

The province responded by bumping up the annual allowable cut (AAC) from about 60 million cubic metres to 85 million in 2007 and that allowed forest companies to harvest dead or dying stands of pine that were turned into chips or wood pellets. As that supply was reduced, the AAC was dropped back to 63 million in 2021  and is forecast to be 56 million in 2026 and 51 million by 2030.

“What’s going to happen to the forest industry in British Columbia, in my opinion, is we will have a lot less annual allowable cut, probably closer to 40 million cubic metres,” said Brink. “The other thing that will happen is First Nations will be getting close to 20 per cent of the annual allowable cut, by law, and caribou (habitat) will be set aside and there will be old growth deferrals. The combination of all that together will bring it to about 30 or 35 million cubic metres annually, so there will not be enough volume.”

While many of the smaller companies that used to serve the forest industry suffered the consequences of corporate consolidation, beetle kills and fires, Brink remains optimistic the region will recover and will continue producing high-quality products to serve world markets and help ensure the wellbeing of British Columbians. He points to the Bowron region east of Quesnel as an example of how forests can recover from disasters.  

“In the early ’80s we had the spruce beetle in the Bowron and if you go there now you won’t believe it happened,” he said. “We had a sawmill set up there and nobody wanted what was left. That gives us a picture of what can be done. There is no better quality fibre than what we are growing here in B.C.”

Pulp mills feeling the pinch of sawmill closures

B.C. pulp mills, including the three in Prince George – Intercontinental Pulp, P.G. Pulp and Northwood – rely on sawmill waste (wood chips) and pulp (usually beetle-killed) logs to make their products, as do  wood pellet mills. Record high global prices for pulp, low pulp inventories, and shortages of wood fiber supply have pushed up prices the mills have to pay for pulp logs and wood chips. As the intentions paper highlights, some of those shortages could be alleviated if regulations were changed to require harvesters to make wood waste available to mills rather than burning it at harvest sites, which is done as a cost-cutting measure.

The BC Pulp and Paper Coalition predicts that if all the forest management strategies being considered by the provincial government are implemented there could be 10 fewer sawmills and three fewer pulp/paper mills operating in B.C.

“Too much sawmill capacity and not enough timber and up to 35 sawmills have shut down and there are probably five to go,” said Brink. “There have been closures all around. I don’t want to be a fear-monger but it is obvious that there is too much pulp capacity and not enough fibre. So one follows the other. There are 16 pulp mills in the province and there will be more closures, either indefinite or temporary, that’s a given.”

Of those 16 pulp and paper mills four have announced temporary closures (curtailments) and more could soon be forced to close. Canfor’s Intercontinental Pulp in Prince George is one of the mills facing labour reductions due to lack of fibre and on Monday the company announced a two-week curtailment will shut down the plant until Oct. 24, which follows a two-week shutdown due to maintenance that took effect Aug. 24.

In Quesnel, a 16-day curtailment at West Fraser’s Cariboo Pulp and Paper due to fibre supply challenges started on Sept. 29. Conifex announced on Oct. 11 a two-week curtailment of its sawmill in Mackenzie, following on the heels of an operational reduction to only one shift per day, which took effect Aug. 29.

Mackenzie is still reeling from the permanent closure of the Paper Excellence pulp mill in April 2021, which put 250 people out of work in  town of 3,700 people. That mill had been in curtailment since June 2020. On Oct. 7, Paper Excellence said it will close its Crofton Catalyst paper mill within the next two months. In December 2021, Paper Excellence announced an indefinite curtailment of its paper mill in Powell River.