Image Credit: CFJC Today

By Chad Klassen

MILL CLOSURES

Forest minister says industry has to adapt to new times with less product available

May 21, 2020 | 3:39 PM

KAMLOOPS — The B.C. forest minister says Wednesday’s (May 20) announcement by Canfor that it will close its operation in Prince George is a devastating blow to an already hurting industry. But Doug Donaldson believes the industry can adapt to the changing times with less supply on the market.

Canfor cited pine beetle kill and the COVID-19 pandemic as a reason to close the Prince George mill permanently. It’s been a similar story across the province with mills shutting down or curtailing production in the last year.

“The housing starts in the U.S. are significantly down over the last two months. A huge drop. Market prices of dimensional lumber are down,” noted Donaldson. “We know that mills have had to be reduced because of the pine beetle epidemic wood not being available anymore. But the COVID-19 on top of that creates a really challenging situation.”

Donaldson says high stumpage rates have been brought forward by the industry. But he notes stumpage has gone from more than $600 per 1,000 board feet to less than $300 in the last year and a half.

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An industry committee has been formed to come up with solutions to save other mills.

“Look at log costs, factors that are under government control. Delivered log costs are something that concerned industry, and we want to make people get a fair return on a publicly-held asset, which is the forests of B.C., when it comes to the lumber industry. We also want to do anything to ensure those costs are reasonable and can be adjusted accordingly that we’ll undertake that. That’s what we’re doing with the log costs,” he said.

Donaldson also notes the industry has to adapt to the times with limited product available.

“We don’t have as much volume in the Interior, so we’re looking at maximizing value versus volume,” he said. “That’s why we have our mass timber strategy. Building taller buildings, building wood out of engineered wood. That creates a much higher part of the value chain to every log that we’re taking out of the forest.”