Fort St. John forestry roundtable looks for solutions in wake of curtailments

The City of Fort St. John is looking to move workers from Peace Valley OSB to the Site C dam, and ensure governments, health agencies, and banks are providing them with supports as the mill shuts down indefinitely later this summer.

Mayor Lori Ackerman called the indefinite curtailment of the OSB plant, coupled with a summer curtailment at the Taylor pulp mill, an "economic emergency" at a forestry roundtable held with business leaders in the city last week.

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City council, along with their counterparts in Taylor, have been assigned tasks to help minimize the impacts of the shutdowns on workers and the local economy, Ackerman said. Those tasks range from mental health to education, finance to housing, to working to ensure future jobs in forestry.

"It's our job to make sure the government has provided adequate and appropriate resources to our community," Ackerman said.

"So, for mental health, we want to make sure Northern Health is stepping up to the plate. We want to make sure that education is there for anyone who needs to upgrade."

The response from BC Hydro and its primary contractors working on the $10.7-billion Site C dam was quick and positive, Ackerman said. Letters also went to Premier John Horgan, and the ministries of energy and land and natural resources, she said.

"We said our community measures agreement was negotiated in the spirit of local hire and local contractors working on the dam," Ackerman said. "So, we expect any resumes coming across their desk from a forestry worker in the North Peace will be prioritized."

Forestry employs more than 7,000 people in the Northeast, accounting for one in five jobs, and generates $422 million in worker incomes. It also generates $579 million in GDP, and $303 million in government revenues.

Transitioning any workers to the Site C dam would only be temporary, as is the nature of its construction; the long-term goal is to get the OSB mill reopened, Ackerman said.

"Our first goal is to reopen the mill. How that happens, how that works, we don't know. This was a complete surprise to us," Ackerman said.

"They've completely paid their taxes already. They've never even come to us for any kind of relief from that."

The curtailment at Canfor's pulp mill in Taylor began June 29 and is expected to last until August 5, right before the indefinite curtailment begins at Louisiana Pacific's OSB mill in Fort St. John. Both companies have blamed weak markets, along with fibre constraints, for their decisions.

The shutdown at the OSB mill puts 192 employees out of work, though the spinoff impact is much larger.

One logging contractor told the roundtable that the curtailments led to 50 layoffs, with more expected, and that 50% of his business will be lost with the OSB shutdown. The company recently bought $1.5 million of trucks to handle mill requirements just to park them. Meanwhile, other contractors are mulling shutting down completely, the roundtable heard.

"The future for me, with the caribou and stuff, is very concerning," said Wayne Harder of W&M Enterprises. "Even if we get through this, what's the next stumbling block down the road? It's one thing to fight through an economic downturn; it’s another thing when you create one."

The roundtable talked about the need for lower stumpage fees, incentives to encourage companies to better utilize their wood supply, and for government to react more quickly to market conditions.

For Canfor, the toughest struggle is stumpage fee hikes, which jumped an average of $22 on July 1 in Fort St. John.

"We're trying to get as much log inventory into the Fort St. John sawmill during that timeframe, and we'll go from there," said Canfor representative John Rowe.

For LP, stumpage for conifers in its South Peace stands went up 104%, company reps said, creating a challenge for proper mixed-wood management. Stands in the Peace are a mix of conifer and deciduous — what deciduous fibre Canfor doesn't use is sent to LP, and what conifer fibre LP doesn't use is sent to Canfor.

"Forestry in the Peace doesn't really work without a conifer licencee and a deciduous licencee working together. It is very important that both are healthy and productive," said Derry Sorgen of LP.

Peace Valley OSB was the first mill in LP's fleet to be shut down, Sorgen noted.

"It’s not just stuff that inputs in to the mill, it's also during mill production itself. Costs are higher, both in B.C. and the north, in particular," he said. "That's basically why they chose this mill first. It is a high production mill, but wood costs are below where we can make money."

In B.C., stumpage fees, paid for timber harvesting on Crown land, don't adjust as quickly as other jurisdictions, such as Alberta. In Alberta, there's a one to two-month lag between lumber prices and stumpage adjustments, Rowe said.

"There's a huge lag from when times are good to when times are bad," Rowe said. "It's going to take over a year for stumpage prices to come down to a more reasonable level."

Opposition forestry critic John Rustad said the BC Liberals have pushed the governing NDP to lower stumpage rates to prevent further forestry curtailments. There's room for the government to move quickly, Rustad said.

"We're in a place right now where lumber prices spiked up quickly, stumpage follows six to 12 months behind, then prices collapsed, and stumpage is still going up because it's following behind," Rustad said.

"Stumpage could easily be adjusted to reflect more current market conditions without being a situation where the Americans would accuse us of gerrymandering."

“The uncompetitiveness of our industry leading to why we’ve taken curtailments. As an industry, B.C. needs to compete globally, but we have a structure in place today where we’re quite a bit behind most jurisdictions," Rustad added.

The province could also be engaging Ottawa on a work share program with employment insurance, or provide immediate funding for wildfire mitigation efforts to keep contractors working through the curtailments, Rustad said.

"Part of having these discussions is to raise the level of awareness of issues and try to put some pressure on government to act and to take some steps," Rustad said.

"The response from the premier was, 'Well, it wasn't a problem of our making.' The response from the finance minister was, 'There will be no additional money to be able to support the forest sector.' And, quite frankly, we haven't had a response from the forests minister.

"So, we got to keep putting up this pressure and moving through these issues."

Around two dozen people attended the roundtable. Among them were Peace River MLAs Dan Davies and Mike Bernier, mayors and councillors from Taylor, Hudson’s Hope, and the Northern Rockies, as well as representatives from the Peace River Regional District and School District 60, among others.

Email Managing Editor Matt Preprost at editor@ahnfsj.ca. 

© Copyright Alaska Highway News

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