A B.C. forestry company that employs thousands of workers says it cannot restart operations without approval to expand its international export of unprocessed logs, an ultimatum that other forestry companies say could cost the jobs of thousands of more workers.
Since November, the management arm of forestry giant TimberWest has curtailed its coastal logging operations, starving local mills in a fight over where the timber they cut can be sold.
Mosaic Forest Management, responsible for TimberWest’s forestry operations, wants Ottawa to bend the rules on raw log exports and allow the company to export more of them before it will resume logging.
But an alliance of coastal forestry companies hungry for that supply of wood says such a change would threaten their operations and the 7,000 workers they directly employ.
“The primary motivation behind Mosaic’s prolonged curtailment seems to be to ratchet up political pressure to change the log export laws,” states an open letter signed by a string of independent mills who represent TimberWest’s domestic customers.
Domenico Iannidinardo, chief forester for Mosaic Forest Management, said the company cannot afford to resume logging when the company’s cost of harvesting usually exceeds what those local mills are paying for logs.
“The only way that we’re able to generally tolerate that and maintain the domestic prices – that are significantly lower than international prices – is to actually get a portion of those logs to international customers," he said.
Under federal regulations, logs from private forestry lands must first be offered to B.C. mills. Mr. Iannidinardo said the company’s domestic buyers are using that rule to block international sales.
Local mills are fighting over a scarce supply of fibre. Over the past three years, the coastal forest sector has harvested an average of 16 million cubic metres of wood, but this year, less than a quarter of that volume has been logged.
Mosaic has asked the federal government to waive the rules that ensure that only logs that are surplus to the needs of domestic mills can be sold overseas. Mr. Iannidinardo said the company needs the change in place for an “absolute minimum” of six months so that it can have certainty about sales.
The mills, in an open letter published in the Cowichan Valley Citizen, say such a change would be devastating for coastal forest communities. “Changing the current laws would betray domestic manufacturers and put the livelihood of thousands of forestry works in jeopardy.”
One of the largest operators is Paper Excellence, which announced a curtailment of operations at two mills in April in part because of a shortage of economic forest fibre on B.C.’s coast.
Granting the waiver to TimberWest would also be defying the provincial government’s direction on raw log exports, and Ottawa has balked at the request.
B.C. Premier John Horgan, whose constituency includes a large swath of TimberWest’s private forestry lands, said he has met with the management company to try to find a solution to the dispute. “I understand their challenges,” he told reporters during a news conference this week.
“But I support the notion of ensuring that we keep as many logs in B.C. as possible, creating more jobs and more wealth for British Columbians."
While the province is focused on mitigating the economic blow rendered by COVID-19, Mr. Horgan’s government would dearly like to see these well-paid forestry jobs – many of them unionized – restored. But the NDP government, pressured as well by environmentalists who are critical of the province’s logging practices, has been reluctant to allow raw log exports to increase.
The premier noted that local mill jobs are at stake as well, and he suggested the company and its customers need to work together to find a solution. "I appreciate that Mosaic has a whole host of markets that they need to satisfy, but I’ve heard from scores of small remanufacturing companies that are anxious to get access to those logs. The challenge is at what price. These are market-based decisions.”
While the province manages logging on Crown land, the private land holdings are largely regulated by Ottawa.
The dispute has ended up on the desk of Mary Ng, Minister of Small Business, Export Promotion and International Trade. Officials were non-committal about the proposal, but sources familiar with Ottawa’s response to the matter, whom The Globe is not identifying because they were not authorized to speak on the record, said the company’s request has not received a favourable response.
If the relief from Ottawa does not come, Mosaic’s chief forester said the only way logging will resume is if its domestic customers will agree to new terms that will bridge the wide gap between domestic and international prices. The company says the average cost of logging on the coast amounts to $100 per cubic metre of timber harvested, while domestic prices for all but the best Douglas fir logs fall below that benchmark.
“If the federal government says no, and we’re unable to get acceptable terms understood with domestic customers to give us that certainty to restart, then we will have to remain curtailed. And obviously that’s a tough decision, but we simply cannot harvest trees and sell them below the cost of production,” Mr. Iannidinardo said.
We have a weekly Western Canada newsletter written by our B.C. and Alberta bureau chiefs, providing a comprehensive package of the news you need to know about the region and its place in the issues facing Canada. Sign up today.
Justine Hunter