No quick fix for sawmill closures linked to drop in timber supply

There are no immediate solutions to prevent more sawmills closures in the B.C. Interior as the amount of timber available for logging has been significantly reduced by the mountain pine beetle epidemic.

Both the B.C. government and industry agreed on that point as a sixth wood-manufacturing facility announced a mill or shift closure in the past seven months.

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Norbord Inc., which operates an oriented strand board mill in 100 Mile House, cited the reasons for its closure as the beetle epidemic and, more recently, the increased number of wildfires that have led to wood-supply shortages and high prices. The timber-supply problem has been exacerbated by lumber prices that are falling in B.C.'s main market, the United States.

"I think we are dealing with the reality of the timber supply coming home to roost. It's not something that wasn't known," B.C. Forests Minister Doug Donaldson said Wednesday.

The B.C. government wants to focus on helping communities and workers after the closures and to find ways over the longer term to get more value out of the timber supply.

The mayor of 100 Mile House, Mitch Campsall, and others are lobbying to have Crown timber harvesting fees - called stumpage - reduced to make B.C. mills more competitive.

But giving forest companies an artificial break on stumpage to prevent sawmill closures is a non-starter as prices are set based on market forces, said Donaldson. And fiddling with stumpage would also be a "dangerous game" in the middle of the latest softwood lumber dispute with the United States, he said.

B.C. lumber producers currently must pay a 20 per cent tariff on shipments across the border.

Donaldson said the focus needs to be on maximizing the value of timber, not the volume, and finding a way to give smaller wood-manufacturing facilities access to wood fibre.

The government can also help in the interim by investing in Interior communities, including projects such as a rebuild of a hospital in Williams Lake, said Donaldson.

Showcasing wood in public buildings, as will be done in the new St. Paul's hospital project in Vancouver, can also help, he said.

More than 700 jobs will be lost with the already-announced permanent closures of a Canfor sawmill in Vavenby, a Tolko sawmill in Quesnel, a reduction of one shift at a Tolko sawmill in Kelowna and the reduction of shifts at West Fraser sawmills in Fraser Lake and Quesnel.

The companies have all cited the loss of timber supply from the beetle epidemic in the closures.

The B.C. Council of Forest Industries president, Susan Yurkovich, said Wednesday the issue is clear: the timber supply is declining and there is not enough to feed mills.

Yurkovich said what is needed is for industry, government, First Nations, communities and workers to work collectively through the transition period. "But going forward, when rebalancing milling capacity with a sustainable timber supply - we have to ensure conditions that allow us to be competitive globally," she said.

Forest industry analysts have forecast that another 12 sawmills will be closed in the next decade to cope with the shrinking timber supply, with a loss of 2,000 to 2,500 mill jobs.

According to B.C. government data, the B.C. Interior timber supply is forecast to drop as much as 40 per cent in the B.C. Interior to 40 million cubic metres from its peak during the beetle epidemic when harvesting was increased to salvage dead trees before they were no longer economically viable.

According to B.C. government data, the Interior timber supply is forecast to stay at 40 million cubic metres from 2025 to 2070, when it will begin to increase.

At its peak in 2005, the beetle killed 140 million cubic metres of pine timber.

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