The latest shutdown announcement from a wood products firm in British Columbia threatens the jobs of 800 employees in what the province’s forests minister concedes is an industry “correction.”
Teal-Jones Group vice-president Gerrie Kotze said Tuesday 300 logging contractors on Vancouver Island and the Fraser Valley are out of work immediately and 500 people employed at the company’s two lumber, shake and shingle mills in Surrey will likely be out of work in a matter of weeks as timber supplies run out.
In the last few months, B.C. forest companies, citing low lumber prices, high operating costs and dwindling timber supplies, have announced closures or curtailments in more than two dozen mills that have resulted in hundreds of lost jobs and rocked communities.
“It’s an indefinite shut down, and obviously, we intend to restart those operations as soon as possible,” said Kotze. “It could be painful. It is of course impossible to predict when we will see a more sustained recovery in lumber prices. The sooner the better for us.”
He said he has seen reports from industry watchers who forecast a recovery where stumpage costs make it economical to start up logging and sawmills again but not until the middle of next year.
Stumpage is a fee businesses or individuals pay when they harvest timber from Crown land and the amount of stumpage charged is based on timber volumes, species and grades reported, said B.C.’s forests ministry.
Forests Minister Doug Donaldson said he offers his sympathies to the many hundreds of workers who have lost jobs, as well as their families and the communities hit by the cuts.
He said government support teams and retraining experts have been dispatched to communities.
“The industry is correcting itself and that’s what’s going on right now,” said Donaldson. “The industry needs a correction and it’s happening now. In the mean time, we’re making sure that we pull out all the stops to support workers and communities that are going to be impacted by these changes.”
He said government changes to reduce the export of raw logs and increase harvesting of what the forest industry considers residual timber left on the forest floor after harvesting operations will eventually ensure more timber for B.C. manufacturers.
“In the bigger picture, we’re determined to turn the structural issues, especially in the coast sector, around,” Donaldson said. “We’re determined to do that and we believe those changes are long overdue.”
Opposition Liberal forestry critic John Rustad said in a statement the government’s policies are killing the industry and resulting in more layoffs and closures.
“Forestry jobs are being driven to the United States by this NDP government and every day that goes by without real action from government puts any chance of recovery at risk,” he said.
Susan Yurkovich, Council of Forest Industries president, said the industry is struggling with high costs, fibre supply shortages and tougher global competitors. She said government and industry need to work together to get through this difficult period.
“We’re looking at what can we do to make sure we are a jurisdiction that can compete,” Yurkovich said. “The competitors for Teal-Jones are not down the road, they’re around the world. We are going through a shift and we need to find ways to ensure that our industry can compete with the globe.”
She said forest companies need secure access to reasonably priced fibre to turn things around.
Kotze said Teal-Jones would accept any support to help recover the industry.
“This is not a decision we made lightly, and obviously, at this point it’s not economical to log on the coast,” he said.
West Fraser Timber Co. Ltd. announced Monday that it will introduce variable operating schedules at five of its B.C. sawmills, resulting in a decrease in production of up to 25 per cent.
Files by The Canadian Press.