Alberta’s forestry sector is confident it can continue to supply raw materials crucial for medical safety products after the province announced it will give the sector a break on timber dues in the face of cratering demand.
The Alberta government announced Saturday it would defer timber dues for six months to help forestry companies continue to operate and retain staff during the COVID-19 pandemic.
“We’re going through a really tough time, so we’re very happy the government has taken a step to try and defer some of the pain,” Alberta Forest Products Association (AFPA) spokesman Brock Mulligan told The Globe and Mail on Sunday.
Mr. Mulligan said the first two months of 2020 were looking rosy for the sector. In the United States – the largest market for Alberta lumber – southern states saw strong construction and there were projections of a broader mini housing boom come spring.
Those hopes have disappeared as the contagion has all but shuttered the construction sector. As a result, shipments not just to the U.S. but also Japan and China – Alberta’s other big buyers outside Canada – have “cratered," Mr. Mulligan said.
“The markets for building products have completely collapsed. Prices are down 25 per cent, but that’s almost theoretical because there are so few buyers right now and so little construction activity going on,” he said.
The break on timber dues is a good stop-gap measure for AFPA members, Mr. Mulligan said, and provides some certainty that softwood pulp production will continue. Alberta softwood residuals are a crucial component of essential medical and hygiene gear, including paper-based laboratory filters and surgical drapes.
“The thing that’s really worrisome is that if our lumber industry were to be shut down because of a market crash, we would lose the ability to supply those residuals over to the pulp side to make those supplies we really need right now,” he said.
The forestry sector is Alberta’s third-largest resource industry. It supports close to 1,000 small, medium and large businesses and employs about 19,000 people, according to government figures. In 2018, it contributed almost $2.2-billion to the provincial GDP, and timber dues dropped nearly $126-million into provincial government coffers.
Alberta is one of the first provinces to defer timber dues in response to the extreme near-term pressures the forest sector is experiencing, the province said.
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